You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your snow plow business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a snow plow business?
The startup costs for a snow plow business are substantial. The largest expense is the cost of a reliable truck, which can cost tens of thousands of dollars. The Democrat & Chronicle reports that Michael McClusky, a snow plow business owner, paid $35,000 when he purchased a new truck for his business, and there are trucks that cost much more than that.
A business will also need a plow, snow blower, salt sprayer and salt, which together may cost between $3,000 and $10,000. Other startup expenses include insurance, fuel and advertising costs.
Business owners that are looking to keep their startup expenses low may want to use a truck they already have or purchase a used truck that’s less expensive. It’s important that a truck is reliable, though. Customers will become upset if a business owner isn’t able to plow because their truck broke down during a storm.
Leasing a truck can greatly reduce the startup expenses for a snow plow business, but lease payments significantly increase operating expenses. A loan may be a better option than a lease, because the business will own the truck once the loan’s paid off.
What are the ongoing expenses for a snow plow business?
The ongoing expenses for a snow plow business include maintenance for a your truck and plow, fuel and insurance premiums. Keep in mind that your vehicle(s) will need to be replaced every 10-15 years, depending on frequency of use.
Who is the target market?
A snow plow business’ ideal customer is an individual or business that’s located in a metropolitan area. Because people and businesses in cities are close together, business owners can spend more time plowing clients’ properties and less time driving between clients.
How does a snow plow business make money?
A snow plow business makes money by charging clients for snow removal services. Clients may either pay on a per-plowing basis or enter into a season-long contract.
How much can you charge customers?
According to CostHelper, most snow plow businesses charge between $30 and $45 to plow a typical driveway one time. Businesses may charge more for long driveways, steep driveways, quick response times and properties in rural areas.
AngiesList members reportedly paid between $341 and $415 for season-long contracts in 2013. Some businesses’ contracts include unlimited plowing for a season, while others charge an additional fee after a certain number of plowings.
How much profit can a snow plow business make?
In the right areas, snow plow businesses can be extremely profitable. One business owner in Boston has a gross revenue of $150,000 in an average year -- but once brought in nearly $400,000 during a single month. The profit from these numbers would depend on a business’ operating expenses.
How can you make your business more profitable?
Many snow plow businesses provide lawn care services during the warmer months. This helps cover loan payments and equipment depreciation when there’s no snow.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your snow plow business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Licenses for snowplowing are typically regulated locally. For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Snow plowing businesses should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions. Snow plowing businesses typically choose to distribute hourly or seasonal contracts, depending on the amount and frequency of plowing requested.
What are some insider tips for jump starting a snow plow business?
Snow plow business owners should have a backup truck that they can use if their truck breaks down. If they can’t afford a second truck, they should at least find a mechanic who will agree to make emergency repairs quickly.
Additionally, business owners should have at least a few thousand dollars saved in case their truck’s transmission fails. The continual changing of gears that plowing involves can be rough on a transmission, and having a new one installed can cost between $1,800 and $3,500.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a snow plow business
The most effective way to market a snow plow business is via word of mouth. Because of this, it’s extremely important to provide excellent service so clients are happy. T
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
A snow plow business can distinguish itself from other plowing companies in the area by offering superior service. Business owners ought to strive to be the first business plowing driveways and parking lots when storms come, and they may want to offer other services, like shoveling and salting.
Offering discounts for referrals is another great way to bring in more customers.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Snow Plow Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Anyone who doesn’t mind driving and is enjoys being alone for extended periods of time may be well-suited for owning a snow plow business. Snow plowers spend hours alone, driving from client to client.
Starting a snowplow business while maintaining another job that has regular hours is difficult, if not impossible. Clients expect snow to be cleared promptly, and snow plow drivers often head out whenever a storm begins -- regardless of whether it’s the morning, afternoon, evening or middle of the night.
What happens during a typical day at a snow plow business?
A snow plow business owner will spend most of their time driving to client’s locations, where they plow driveways and parking lots. They might also shovel and salt walkways. When not plowing, business owners may work on growing their business, collecting payments from clients and getting their truck maintained.
Work for snowplow drivers often comes in bursts. A driver may pull long hours during a storm, and then not have much to do until the next snowfall.
What are some skills and experiences that will help you build a successful snow plow business?
A snow plow business owner must first have a driver’s license. Business owners who don’t have a license may need to take a driver’s education course before obtaining a license in their state. DriversEd.com has a directory of courses offered throughout the country.
Business owners may also want to take courses specific to snow plowing. The Snow and Ice Management Association (SIMA) offers several training programs, including “certified snow professional” and “advanced snow management” programs. The Accredited Snow Contractors Association (ASCA) also has a certification that business owners can earn.
What is the growth potential for a snow plow business?
Most snow plow businesses serve one specific area. A business might bring on additional drivers so it can serve more clients, but hiring employees significantly increases a business’ operating expenses.
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
How and when to build a team
Many snow plow businesses are one-person operations, largely to keep their ongoing costs minimal. Businesses that hire employees not only have to pay those employees’ salaries, but they also must pay higher insurance premiums.
Despite these expenses, a few snow plow businesses do hire employees. A business might be ready to hire employees when it secures a contract for a large parking lot, which may require plowing and shoveling, or has more clients than one driver can get to in a reasonable amount of time.