Northeast Landscaping / Snow removal

April 15, 2021

by a searcher from Keene State College in Norwalk, CT, USA

Does anyone have experience pricing landscaping and snow removal work in the northeast?

I know this isn't a search question but there are several landscape operators on here that may have some insight.

Primarily talking about snow; is it best practice to price per sq ft, per inch, per storm or some combination of this on a seasonal contract? I've seen massive estimate swings from a few thousand dollars to $100k to plow a few of my apartment properties for a season. Most folks won't even give me an estimate or require that they have a year contract for landscaping too.

With the density of resi & comm apartments and warehousing in my specific location, this leads me to believe there has to be a demand for a responsive, data-driven snow removal business. Will continue to research this market...

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Reply by an intermediary
from Oklahoma State University in Memphis, TN, USA

Many successful snow removal op0erators use a mix of pricing strategies, including flat rate seasonal prici9ng, per snow event, per push, and per inch. This has the effect of hedging against lower than average snoiwfall and higher thafallln average snow. You make more fro0m flat-rate seasonal contracts of there is little snow. You make more from per-push or per-inch if the snow isn heavier. There may also be variables around around the pricing.for different situations. For example, yopu could have a flat rate, but have additional charges if the snowfall is over a certain number of inches, The trade associations SIMA and ASCA

This topic has received lots of study. Here is a link to an article you may find helpful: https://www.sima.snowbusinessmagazine.com/snowbusiness/june_2020/MobilePagedReplica.action?pm=1&folio=12#pg19

I'd be happy to discuss this top withn you if you'd like. We handle ma ny transactions in the l;andscapoe and snow space.

Ron

Reply by an investor
from University of Notre Dame in Pittsburgh, PA, USA

We were involved with the Winter Services team in Milwaukee which only does larger commercial snow removal - think Amazon distribution centers and corporate headquarters, malls, etc. Contract mix is more art than science and technology investments can help with pricing/bids. You have to decide what you want to be/focus on because residential vs commercial is obviously different and do you want to compete on price and volume vs high touch/demanding customers. Ron above said the mix/options well and you can basically build in a hedge. We spoke to a gentleman who ran his entire business on per push and he had a $2 million EBITDA year and the next was $9 million - that was the pure variable model but he was fine with that. I would also add look very closely at SALT pricing. Its a huge input/material cost and can be very variable if you don't have the scale to lock in pricing.

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