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Snow removal invoice template for Operations

hi folks John Woodhouse here educator with Penn State University Cooperative Extension today we're going to talk about methods to identifying profit and improve your snow plowing operating efficiencies like DNA and snowflakes no two events are exactly the same similarly no two businesses will react the same to two snow events while some snows may be heavy wet fluffy powdery others may be icy rainy or a mix to be viable sustainable in the snow plowing business you must be prepared for many of these conditions each snowfall will require a different little different approach to completing jobs and the times to complete that process will differ as well today I'm going to talk to you about seven things that you can do business-wise to help you increase your profit while not sacrificing quality a quick overview is we're going to hustle in August we're going to have big trucks big equipment has year round big payments don't try and always to have the lowest price collaborate with winners attend plow clinics join SEMA invest in good insurance track your time and expenses even during long events let's get started snow removal is a complicated process in order to be successful the company needs to have equipment Manpower clients and material efficiency is needed every step of the way to be profitable first let's talk about what exactly profitability is before we go on and what it isn't profitability ing to the farm management text by K Ed and Duffy is operational in nature meaning it's a business's operational in nature profitability is relative to its efficiencies of production and operations the amount of Revenue left over after expenses how much is spent on variable costs such as labor and raw material salt ice milk Fuel and breakdowns will affect efficiency and profitability your services have to be delivered as efficiently as possible to have the best chance of profit if you're plowing with a small 6 foot inch six foot wide plow for example and it takes you too long consider saving up to purchase an 8 foot6 or larger plow to be more efficient with time maybe your salt spreader is too small or if it's over applying because it's out of adjustment you'll need to go over it uh you'll need to go over the same passes or spread too much deicing material as possible that this can dig into your profit quickly if your contracts are timeing material you'll end up overusing material and inadvertently overbilling your customer client this is all great but how do you know if you made a profit well one thing you do is to calculate your profit margin this is achieved by taking your net profit which is your total revenue minus your total expenses dividing that number by your revenue for example say you build at $1,000 with Associated cost reading reaching $800 $1,000 total revenue Vue and the associated expenses are $800 what's left over is 200 bucks this is expressed as a percentage as follows 200 divided by a th000 or 20% profitability is not increasing revenue or just making more money increasing Revenue to make more money if expenses are up if you're inefficient revenu is offset by increased expenses meaning if you increase Revenue could be in a form of an extra plow job or a few more sales and it's takes you longer because your truck's under sized or your equipment's in bad shape or it's uh too inclement weather to increase travel time you complete these jobs takes longer you're not being efficient hence your profitability may not be commencer with the increase in Revenue to increase profitability in this scenario and others consider finding and seeking ways to become more streamlined faster and use less raw materials Etc to increase your profitability if you suspect low to no profit here are a few things that K Duffy and Edwards recommend you look into with the business first check your past records from past storms and establish standards for comparison where were you the last storm how long did it take what was your average travel time what was your overall material cost compared to the previous storms check your volumes of production do you have too many or too few accounts to be efficient try to line up accounts nearby to limit travel time or having one or two small hourly accounts is probably not enough to cover expenses you want to check your sales prices check your selling prices are you marketing your product to the right customer are your hourly push rates too low to cover fixed and variable expenses if your prices are too low you may want to consider pricing per lot or per push in future storms in the event of equipment failure setbacks having very narrow margins will not help you to be profitable getting stuck can cost a lot of time and money especially if tow trucks or Machinery is needed check your physical efficiency genes properly size your equipment and keep it in tip toop operating condition this is essential for safety snow management track repair expenses do you have the best routes planned for logistic and production planning check your input prices are you buying in bulk look for discounts for material for salt for ice melts for example Tractor Trailer Load prices per pallet are better than buying one pallet at a time if you have the space in the spreading equipment take advantage of economy of scale discounts and purchase bulk salt you're going to want to be production efficient Choose Your Weapon figuratively speaking in snow removal choosing the right equipment is is essential for residential jobs smaller to midsize commercial jobs a pickup or a v or straight BL with a V or straight blade may be the best choice but for commercial parking lots like malls or big buck stores the lootus or Fleet machines with buckets and blades and snow pushers may be the best choice to get get the job done quickly and to meet contract put open up by obligations I just want to say here that you don't start out with all that equipment you end up having production related goals but that's another video here's where things get interesting the timing in the storm relative to contract deadlines can be challenging depending on the timing of the event say the snow stops at 2 a.m. you have 10 contracts and 20 minutes each you need about 3.3 hours of on lot time totaling probably somewhere around 5 hours production time including travel to meet the goal of opening up by 7: you need to set the alarm to get up at 2: a.m. if you're by yourself or say you have an employee or a partner you can start at 4:30 and still achieve that 7: a.m. open up by time as I said earlier each storm will vary and production and start times will be different the more experience you have the better at making the start time call you will become most clients especially commercial accounts will have expectations of timing if they do not this is something that you want to discuss with them and include in the contract if there are any sidewalks dumpsters Etc line out all the details of what services you provide are intended to provide and where don't wait until winter for a marketing campaign here in Pennsylvania it's good to start hustling in August to sell your services and get the word out early to reach your existing customer base tell them about your services think of ways to expand into new markets if you wish think of where your future customers might be and begin to to Envision how you can connect with them are they residential commercial nearby or a different region send out your contracts during the late in summer and early fall it's recommended as I said earlier to not get too big too fast because big equipment equals big year-long payouts you can start a new division or your first one with usually a 3/4 ton pickup truck for about 10 to 20,000 or use plow for three or 5,000 make sure you have a new set of tires and a strobe light I might range from about $1,000 for tires and a couple hundred for a strob light you'll need insurance general liability and collision usually costing one or 2,000 per vehicle per year ass salt spreader is a good choice to have costing anywhere from 2 to 8,000 depending it's if it's a tailgate model or a bed mounted with cinder spreading capabilities if you've marketed your clients that you'll be doing hand workk and sidewalks invest in snowblowers shovels walk behind snow blowers or sidewalk ready machines like the John Deere 1445 or vent TR articula litter but these machines are for season meaning they can incorporate mowers brooms blowers blades on the front or back avoid always winning contracts with the lowest price price your plow jobs based per inch per job per season or per hour with the hourly jobs include your travel time in for each job on the bill price jobs based on supply and demand and market pricing in your area do your own market analysis externally by calling around found and asking what other companies may be charging and see if your calculations and your prices are close to Market starting with low prices then raising them over time is not an efficient and effective pricing strategy as you raise your prices it's likely that you'll lose customer it's recommended to collaborate with winners these are contractors in your area that have been doing snow removal for some time they may be willing to give you to help and gain Insight most contractors are willing to share their processes be prepared for this storm and for the big one gain experience attend plow clinics earn certifications and join affiliations some affiliations and trainings may include organizations such as the Affiliated grounds management snow and ice management association s these both can help with resources about the snow REM business both provide training templates workshops and other resources for the plowing industry one of growing industry from SEMA is the certified snow professional training program this short course provides training for snow marketing snow science mechanics corporate law and even some human resource training for snow management you will need to invest in good insurance general liability policy is necessary for slip and Falls injury and potential Court claims with no insurance one claim could cost you everything General Automotive automobile and commercial vehicle insurance covers the truck in route and on the road and on the lot on the job business owner policies are an industry term referring to insures that cover both general liability and Commercial Vehicle loss of income insurances are available from some organizations and also workman's compensation is for worker injury and that is also available track your time and expenses use a worksheet a work order or computer program to document and track your time and materials develop a system of worksheets to track time and materials during each event accurately account for salt ice melt fuel for each client for each storm this will be extremely helpful for billing especially if your accounts are hourly or per push or per inch sorry this will be extremely helpful for billing especially if your accounts are hourly or per inch plus it'll be helpful for you to know how long jobs take to complete regardless if they are per push or per season on purpose jobs track time tracking time will benefit to boost efficiency and to help you know if the time material are on par with billable amount quick overview hustle in August September here in Pennsylvania for winter contracts and counts send them out early big trucks and new equipment are big year round payouts you don't always have to win jobs with the lowest price collaborate with winners it's a fast way to learn have a backup plan for breakdowns and remember you have many clients to serve ATT 10 plow clinics join the snow and ice management association or other affiliations invest in good insurance remember general liability and Automotive policies are year round cost and remember to track your time and expenses even on per push per lot jobs it's a good idea to know how long things take thank you very much for watching all to credit strong load house m s references include farm management 7th edition K Edwards stuffy 2012 mcra Hill Inc thank you