Mastering The Snow Business & Flat Rate Pricing Part 2

Building on our previous discussion, let's delve into the world of commercial plowing – a critical aspect of a lawn care business that can greatly impact its profitability. There's a range of pricing models when it comes to commercial snow removal, and each comes with its own set of pros and cons. Some businesses opt for per-push contracts, where they charge each time they clear the snow. Others prefer an hourly rate, while there are those like me who find that flat rate pricing fits the bill.

As we continue our conversation, it's important to recognize that your business's financial structure can impact how you choose to charge your clients. For my residential customers, I stick with flat rate prepay. Why? Because these residential accounts make up the backbone of my operations. They cover my overhead, ensuring that my family and team are taken care of. As a result, my commercial accounts seem like an added bonus – a cherry on top, so to speak.

Now, let's talk about how different strategies work for different folks. There are business owners who have a different approach altogether. For them, it might be the commercial contracts that keep the lights on and the gears turning, with residential accounts serving as a supplementary income stream. The beauty of this industry is that there's no one-size-fits-all solution. You need to find what resonates with your business structure, goals, and clientele.

Digging deeper into the nitty-gritty of commercial contracts, I use contracts available on Lawntrepreneur Academy – an invaluable resource that provides comprehensive templates tailored to the lawn care and snow removal industry. Within these contracts, I've established four tiers for both plowing and shoveling, along with a clear pricing structure for salt application. I've based my pricing on a standard 1-acre parking lot and 100 linear feet of sidewalk – a common scenario for commercial snow accounts in my area. What's fantastic about these templates is their user-friendliness. They come in a downloadable form, with prompts in red font that you simply replace with your own company's information.

Now, let's talk about salt. When it comes to this aspect of the snow business, I've opted to partner with my friend Mike Bedell. I believe in focusing on what I do best – snow removal – and leveraging Mike's expertise to handle salt application. It's a win-win situation that allows both of us to excel in our respective domains.

But let's circle back to a universal challenge – getting paid. Dealing with commercial accounts can sometimes mean waiting longer for payments to come in. While many accounts are prompt in their payments, some can stretch out for months, causing cash flow hiccups. To counter this, I will be introducing flat rate monthly pricing for my commercial clients. This approach ensures a steadier cash flow, protecting my business from the feast-or-famine cycle that can result from delayed payments.

Here's how it works: Imagine your base rate covers snowfalls up to 3 inches. Calculate the average number of snowfalls in a season, say 45 inches. That's 15 storms. Multiply your base rate by 15, giving you the flat rate for the entire season. To make this monthly, divide that price by 5. If it’s an account you don’t really want, multiply by 20 – bid it as if you have all the business you need. And if salt application is part of the contract, multiply the seasonal flat rate by 2.5 to arrive at the new flat rate seasonal price.

Now, about invoicing – I've found that sending out invoices on November 1st, with payment due by December 1st, provides a solid foundation for the winter season. It ensures I'm covered for that initial snowfall and mitigates the uncertainties of payment delays.

In conclusion, transitioning to flat rate monthly pricing has been a strategic move for me. By 2024, my business will solely offer this pricing structure. The decision was born out of a desire to streamline operations and avoid the hassle of chasing down payments. This change allows me to focus more on what I do best – delivering top-notch snow removal services to my valued clients.

Remember, every business is unique, and finding the right pricing strategy requires a thoughtful assessment of your circumstances, goals, and clientele. By embracing innovative approaches and learning from shared experiences, you can navigate the complexities of the commercial snow removal business with confidence and success.

Resources:
Snow & Ice Management Log
Residential Snow Plowing Contracts
Commercial Snow Plowing Contracts
Get Started Plowing Snow!
All In Snow Plowing Bundle
Snow Plow Contracts Bundle