Snow Contracts – The secrets the snow industry doesn’t tell you.
Written by Ryan Such
Is signing a snow removal agreement overwhelming or confusing to you? Here are some things you will want to know so that you can sign the right agreement with the right company.
First of all, let’s talk about the “real” averages for snow in the FM area. Our area receives approx. 50″ a year on average. Obviously, this can vary with the lowest getting below 10″ and the highest snow amounts for a winter season up to almost 120″.
What you want to pay attention to is how often we receive 0.5″, 1″, 2″ or 3″. Some companies will try to sell you a contract fee for the winter which means you pay a set price for the winter no matter how little or lot of snow we get. Where the deceit is, is that they overstate on average how many visits they will make on an average winter.
Here are the numbers the FM area has:
- 20-22 – 0.5″ snow events
- 16-18 – 1″ snow events
- 8-10 – 2″ snow events
- 5 – 3″ snow events
So keep a close eye if you sign a seasonal one-price contract on what the trigger is for when the company will give you service. There are different types of agreements that can be signed for the winter, here are the main 4:
Seasonal contract – One locked fee no matter the amount of snowfall.
Per Time – Here you get charged a set fee for every visit.
Per Event – Here you get charged a set fee for every event which usually includes multiple visits.
Hourly – Here the contractor changes hourly for every visit and usually has a minimum charge per visit.
Let’s talk through the pros and cons of each and what to watch for.
1. SEASONAL CONTRACTS
This plan is great for a customer that doesn’t want the uncertainty in their billing as the snowfall may vary from year to year. Great for budgeting reasons. You also don’t have to worry about overbilling or any of the issues affiliated with that. With this plan, you have to be sure you have it set up with the exact trigger (0.5″, 1″, or 2″) that you want or there will be issues over when the contractors does service or not. Make sure to figure out if staking the property, ice melting/sand, and checks for drifting and plow ridges are included or not as these are very important items.
2. PER TIME
This plan allows the customer to pay only when service is needed so there is more volitility in billing based on how much it snows. Some people want to only pay if it snows and are fine paying more as it snows more. Make sure that if you have this plan you understand what happens when you need the contractor to touch up a plow ridge or some drifting, will you be charged the “full” per time price? Watch out for this. Some contractors especially on residential accounts will give you a low per time price but charge 2 or 3 times a snowfall as most snowfalls require a couple of visits. Also, keep a close eye on what the trigger is because in light snow years, companies tend to come over more often then they should to help boost revenue.
3. PER EVENT
This style of pricing changes one fee per snowfall and usually will cover multiple visits. This price will usually be 50% higher than per time pricing but it covers all trips needed during a snowfall. I personally think this is a better plan than per time pricing for residential accounts as it takes out the possibility for over billing as it is much cleaner for the customer. The downside to per event style is that up front it appears to be more expensive.
The 4th style of billing for snow removal is hourly. You have a predetermined hourly rate for the equipment used and get charged hourly whenever the snowfalls dictates that equipment is needed. This can be a real win for the customer or a real bust. It is very hard to compare equipment as contractors will give the customer a plow truck hourly price but customers rarely ask if it is a 1985 truck or 2023 and what size plow. This is the style of billing that rewards the contractor for inefficiency. If you have a trusted contractor this can work well for customer as they are getting what they are paying for. More and more companies now have computerized hourly tracking in their vehicle which leads to more honest billing. “Boosting” hours are all too common in this style of billing as it is usually done overnight and few people are watching. This style can work well, but make sure you can find someone you trust.
Lastly, make sure you know the minimum charge for callbacks for drifting and plow ridges. This is a change that can add up over the course of a winter.
Other miscellaneous things to look for:
- Snow taking of property should be free, most companies will do this.
- Ask what billing looks like, how often, upfront, pay after service, can you use a credit card or not. This should all factor in. I would say to never pay upfront, too much risk to customer.
- If you do the seasonal contract, does it cover all snowfall or end March 31st?
- Does the contract have a fee for getting out of it, most won’t.
- Gas surcharges, most won’t.
- If you have ice melt/sand, what are the minimums?
- How many disclaimers do they have?
If I was a person hiring a snow contractor, residentially or commercially, I would ask for pricing a couple of different ways and then decide what works best. I would also make sure on the front end that both sides understand the expectations. Keep in mind NOT everyone is 1st on the list. Ask this question and listen carefully to the answer. A more important question would be how long does your list take to do. Find someone that says 6-8 hours on a 3″ or less snowfall. If you find that you will end up with timely service.
At the end of the day you want to find a contractor your trust and most of these won’t be issues.