How to Charge for Snow Removal? Understanding the Snow Removal Pricing Formula

Winters in most regions of the US result in heavy snowfall and storms or blizzards. By January of every year, most parts of the US are covered in snow. 

As per the statistics, Vermont is the state that receives the most snow per year in the US, with the average recorded at 89.25 inches. Apart from that, the other snowy regions of the US are Maine, Colorado, Alaska, New York, Michigan, and others. 

So, with such a statistic, it is clear to assume that the snow removal service can be a good business opportunity for entrepreneurs in the US. As so many cities and states are covered with snow during the winter, you can expect a lot of snow removal requests during the winter months. 

But to profit from snow removal services, you must know how to price them accurately. And without the snow removal pricing formula, you cannot successfully quote your service costs. 

How Much to Charge for Snow Removal?

Residents plan out their snow removal needs way before winter is about to hit. They don’t want to get stuck in snow or experience unwanted repair or replacement costs due to the pile of snow stuck right in front of their property. 

Most people do not want to risk using their limited skills to remove snow by themselves. It is because improper snow removal can damage their property. Without proper snow removal, you will find cracks and splits over the concrete floor of your driveway or property. 

In addition to that, the landscaping might get seriously damaged with an unprofessional snow removal approach. This is where you and your business may help! 

You can either start a dedicated snow removal business or add snow removal services to your existing landscaping business. Either way, you need to price the services right. People are demanding it, and your snow removal services should meet their expectations. 

Here is the basic formula for snow removal pricing.

Your rate x number of workers x number of hours = your cost of snow removal service.

Before learning the snow removal pricing formula, you need to learn the steps on how to charge for your snow removal services:

Step 1: Determine the time for completion of the job

Assess the amount of snow accumulated at the site. Calculate the work time based on how many hours an individual would need to complete the job alone. And this will help you determine how many employees you might need and predict the time of completing the snow removal project. 

Based on that, you can decide the snow removal prices and mention the same to the price estimate for the client. 

Step 2: Find the overheads or additional charges that you have to bear

After you have sorted out the snow removal prices, it is crucial to determine what additional costs you have to bear to fulfill the service requests. You must add a percentage of overhead costs to cover your operating costs.

Some of the overhead costs that you should include along with the overall snow removal prices are:

• Wages or salaries of employees.
• Driving time 
• Vehicle maintenance
• Snow plow attachment costs
• Snow removal equipment maintenance
• Fuel costs
• Insurance costs

Offering snow removal services might seem impossible without the expense of these overheads and more. Therefore, these aspects cannot be provided to the customers for free, as it will put your snow removal company at a loss. Add a fixed overhead percentage to all price quotes! 

Step 3: Ensure to add your profit margin

You need to do a bit of market research on how people are responding to the overall price for a snow removal service. It will help you decide how much profit you can expect to keep in the price quote. 

You cannot be random with your profit margin as it might just set off the clients and lead them to choose your competitors. Assess your target audience to determine whether they like to spend too much on a snow removal service or are a bit money-minded in availing it. 

Based on the supply and demand of snow removal companies in your region, you can keep a profit margin ranging from 20% to 50% in the price quote. 

The profit margin also depends on whether the customer is seeking a snow removal contract before the winter or calling for immediate snow removal. 

The snow removal contract pricing might differ from the immediate snow removal cost. It is because the contract provides ample time for snow removal companies to be prepared to deal with their removal situations. But, the immediate service calls are approached without prior planning, which adds to the removal intensity. Hence the cost and profit margin are high. 

Step 4: Decide the pricing model that you would prefer

There are various pricing models for determining snow removal rates. Some of these models are destined to work seamlessly for light snow events, while others for heavy snow impacts around the property. 

The various pricing models are as follows:

1. Per push

The pricing model allows you to charge an amount every time you clear a pile of snow. You might have to remove multiple lots in a single snow event, which will help you earn more money from a single job. 

But, the clients are also a bit smart in minimizing costs. The per-push pricing model for determining snow removal rates will fail if the customers decide to call you only for one big push to eradicate the snow lot. 

2. Per event

This pricing model will decide the snow removal rates based on each event. So, if there are many low-frequency events in large numbers around a region, you will be in a profitable position with this snow removal service pricing model.

But at the same time, this model won’t work well if you are operating in a region that experiences heavy snowfall during the season. Your price evaluation might be too little to recover your snow removal service’s capital expenditure.

Hence, this will crush your profit, and eventually, your snow plow business will shut down. 

3. Per inch

The per inch model for pricing the snow removal services is similar to that of the per push model. It is a flexible strategy to price your snow removal services because you can charge the customers based on total snowfall recorded throughout the event or by the times you pushed off the snow. 

To determine the total snowfall average for a specific event around the region, you need to check the reports specified by the weather department of the state. You only have to price right per-inch, without which your profit cycle will take the blow. 

4. Seasonal contract

In this model, you will be pricing the snow removal services for the complete season, which will be paid to your business in instalments. It is applicable only when someone agrees to get into a seasonal snow removal contract with your company. 

A seasonal contract is convenient for the client because they do not have to go through the hassle of reaching out to a snow removal contractor every time there is an event. With the contract, they will come to your place right after a snow event and execute the services specified in the seasonal contract. 

The company can experience a loss with this snow removal contract as well. If there is an extreme amount of snowfall and snow events throughout a season, then it will negatively impact the business’ profitability. 

To avoid such instances, you should limit the number of events you will attend or the number of pushes you will offer. Hence, this will eventually help you manage your profit along with the seasonal contract convenience you offer customers. 

5. Per-hour rates

The hourly pricing model for the snow blowing or plowing services states that you will charge the customer based on the time your men need to carry out the snow removal job. Irrespective of whether it is residential snow removal or commercial snow removal, an hourly pricing model is quite common in the sector. 

With such a pricing model, it becomes beneficial for a snow removal business to profit from every client. But when the workload is more, it won’t be easy to generate a healthy profit from just hourly rates. 

Moreover, some clients keep pushing their employees to work faster to reduce the working hours. And such an approach to dealing with snow plowing services is dangerous and might negatively impact the business. 

Step 5: Get a snow removal business software

After you have set the pricing for your snow blower services, you need to have access to digital software for sending those estimates and scheduling the service jobs responsively. 

A snow removing business software consists of job scheduling features to help you assign employee(s) to a job and finish the snow removal. You can also send the contract over this software to your client to get a digital signature. 

You have to upload the price estimate in a specified format to the software and send it to the customer through email or as a link to their mobile phone. 

You must have a snow removal estimate template ready with you at all times, especially for residential snow removal projects. Just fill in the acquired details and data to add the overall snow removal costs with profit margin and overhead expenses. 

Snow Removal Pricing Formula for Residential Needs

When you are about to use the pricing formula for determining the snow removal cost, it becomes important to know the average cost to remove snow in the residential properties around your area by the competitors.

The snow removal cost determining the formula for the residential snow plowing needs will help you determine the base price of snow and ice removal. And then, you can add the profit markup to the base snow removal service costs.

The formula for calculating the base snow removal cost is:

Snow Removal Pricing Formula for Commercial Needs

The commercial properties might seek snow removal contractors for an entire season and not just for a single visit. Therefore, they either take up seasonal contracts or multi-season contracts. 

A seasonal or annual snow removal contract typically costs around $250 to $450. 

The commercial properties prefer such contracts to ensure they get the snow blowing service, irrespective of how many events occur in a season or year. 

Offices and other workspaces cannot call for separate service requests whenever it snows. Hence, a contract works best for them! 

The pricing formula for the same is as follows:

FieldCamp Can Help you Reach the Job Sites on Immediate Requests

When there is an emergency call, you must be very responsive to assign jobs to employees and get going with the snow plowing jobs. The emergency commercial or residential snow removal services should be initiated immediately. 

Responding to critical situations faster will help you build your brand name. You should have a pre-estimate cost of snow removal ready in hand for such emergency services. You can send instant invoices through the software immediately after the emergency is neutralized. 

FieldCamp can help you immediately assign the jobs to the available employees and give them a green signal to get going. 

During the usual times, you can also use FieldCamp to upload and send your price estimate to the clients for approval. Once done, you can assign employees to go ahead and clear snow around their property.  

To learn more about FieldCamp and its benefits, take the 7-day FREE trial. It will help you realize the potential of this technology to digitize your snow removal business.