snow Snow Contracts – The secrets the snow industry doesn’t tell you. Written by Ryan Such, President of a company in the snow industry Are you either hoping there isn’t any snow this winter, or hoping to find a snow removal company that can literally prevent snow from falling on your driveway and sidewalks? Here’s an insider secret for you – it’s not going to happen. Short of that, here are some things you will want to know so that you can sign the right agreement with the right company. Ultimately, you’ll want to know if you’re getting the right deal. In order to answer, you need to be armed with some knowledge. Knowledge is power, and all that. The first thing to know are the true averages for snow in the Fargo/Moorhead area. Our area receives about 50 inches of snow a year on average.  Obviously that number can vary greatly, but we’ve been in business long enough to track 15+ years’ worth of snow. What have you done for 15 years? Nevermind, let’s not get into it. All companies have snow triggers (no relation to Tiggers), which is the amount of snow that has to be on the ground before a company will come to clean it up.  Most companies will have snow triggers of .5”, 1”, 2”, or 3”.  The important part that you need to pay attention to is HOW OFTEN we receive these amounts of snow. The average number of snow events the Fargo/Moorhead area has by trigger: 21                    .5” snow events 17                    1” snow events 9                      2” snow events 5                      3” snow events So, as you’re looking at an agreement, you can divide the amount you’re paying by the amount of events based on the proposed trigger, and you’ll have what you’re paying for per snowfall. The next thing to consider is the type of snow removal agreement.  There are four types of contracts that you will see and here are the pros and cons of those four.
  1. Seasonal Contract – A flat-rate seasonal contract charges you a fixed fee no matter the amount of snowfall. Think of this like “snow insurance”. This plan is great for the customer that wants to know what they’re paying and simply put it in their budget. The downside is that if there isn’t much snow, you may have paid more than you would have with a “per time” or “per event” agreement. You’ll want to make sure of what trigger the provider operates on, and what’s all included with the agreement. Sidewalks? Staking? Ice melt? Plow ridges after the city plows come through? Uber rides to work if your provider doesn’t show up in time?
  2. Per Time Contract – A per time contract charges you a set fee each time the contractor visits your property. This plan allows you to pay only when service is provided, so there is more volatility in billing based off how much it snows. Some people want to only pay if it snows and are fine paying more if it snows more. However, you should watch for when you need the contractor to touch up a plow ridge or some drifting because you will be charged the full per-time price. Some contractors (especially on residential accounts) will give you a low per time price but end up charging you two or three times a snow fall since large snow falls require a couple of visits to keep things clear.  Also make sure to keep a close eye on what your snow trigger is because when it barely snows some companies tend to come over more often than they should to help boost revenues.
  3. Per Event Contract – A per event contract charges you a set fee for every snow event and this usually includes multiple visits. The price for a per event contract will most likely be 50% higher than a per time contract but it covers all trips needed during a snowfall (driveway, sidewalks, plow ridge).  I personally think this is a better plan than per time pricing for residential accounts.  The per event contract takes out the possibility for over-billing and it is much cleaner for you. The downside to this plan is that up front it appears to be more expensive.
  4. Hourly Contract – For an hourly contract the company charges hourly for every visit and usually has a minimum charge per visit. There is a predetermined hourly rate for the equipment used, and then you get charged hourly whenever the snow falls and for the equipment that is needed.  This can be a real win for the customer or a real bust.  Sometimes a contractor will give you a plow truck hourly price but you won’t know if it is a 1985 truck, a 2015 truck, what size plow is, or how many men are in the truck.  An hourly contract is the one style of billing that rewards the contractor for inefficiency. If you have a trusted contractor this can work well because you are getting service for what you are paying for.  More and more companies now have computerized hourly tracking in their vehicles which leads to more honest billing. “Boosting” hours is very common in this type of snow removal contract because it is usually done overnight and few people are watching.  This kind of contract can work well, but just make sure you find someone you can trust.  Lastly, make sure you know what the minimum charge for call backs is for drifting and plow ridges.  This is a charge that can add up over the course of a winter.
file_006There are also other factors to consider at when picking a snow removal agreement and contractor. These factors may include how nice their web site is or if they smell like gasoline, but those typically aren’t as relevant as other factors. Do they include the staking of your property in advance? Most do, and while the stakes can look unsightly, they should help prevent damage to your lawn.  You should also always ask what billing looks like, how often you get billed, if you can use a credit card, if you have to pay up front, or if you pay after the service is done.  These are all very important things to check on and I would suggest to never pay up front because there is too much risk for you.  Another thing to look for is if you are doing a seasonal contract, ask if it covers all seasonal snowfall, or if there’s a hard stop on a certain date.  Also ask about any fees for dropping the contract, gas surcharges, minimums for sand and ice melt, and how many disclaimers they have. The more disclaimers the scarier. If I was looking at hiring a snow contractor residentially or commercially, I would ask for pricing a couple of different ways and then decide what works best for me.  I would also make sure on the front end that both sides understand the expectations. Lastly, one great question to ask the snow contractor is “how long does your list of snow removal properties take to do?”  You are looking for a company that can get through their whole list in 6-8 hours on a 3” or less snowfall.  You may not be first on the list, but if you know they’re coming soon, that should give you some peace of mind. If they can’t tell you, give them a piece of your mind!