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How to Get Commercial Snow Removal Contracts and Grow Your Business Rastrac Team | Oct 26, 2022 9:08:00 AM

Being proactive before the winter months hit is an excellent way for municipalities to ensure effective winter weather responses. 

What Is a Snow Removal Contract?

Snow removal agreements are contracts between snow removal service providers and clients, which may be a homeowners’ association or a local government agency such as the local transportation department. Specifically, it lists the snow removal payment conditions and any other specific conditions decided between the two parties. 

Commercial and residential snow removal services provide planning and execution services to protect against harsh winter weather conditions. They outline how snow and ice will be removed when it hits and can protect the service provider and the contracting party from any ambiguities when winter weather comes.

Commercial vs. Residential Snow Removal Services

There are some differences between commercial and residential snow removal services, so defining the snow removal work agreement before the season is critical. You want to be clear about the services you will and won’t be doing ahead of time to avoid confusion. 

Residential snow removal agreements tend to be more short-term, while commercial agreements may have a more lasting effect. Commercial agreements may require you to leave vehicles on site while the contract is in effect, and you may be expected to remove snow immediately after a snowfall. This would be typical in a commercial agreement with a hospital, university, or sports complex where roads must be cleared immediately.

On the other hand, residential snow removal may be slightly less lucrative unless you contract with a major rental property or homeowners’ association. The plus side is that there is less risk, and the contracts tend to be a little simpler. Most people just want their driveways and sidewalks cleaned, so significantly less time and machinery are involved.

The Different Types of Snow Removal Contracts

There are a few types of snow removal contracts, and we’ll go through each one here. 

Time and Material Contract

A time and materials contract bases its pricing on services rendered whenever a job is completed. You set your service fee per job depending on the amount of time, work, materials (salt, fuel, de-icing products), and the amount of snow cleared. This kind of contract can be a little risky because the amount of work you’ll complete depends on the amount of snow you will clear. If there is no snow, you don’t get paid. However, it also means you are only working when there is work, and you can use your snow-clearing vehicles to go where the snow is.

Per Inch Contract

A per-inch contract means you charge your clients based on the amount of snow accumulated by volume. This is a tiered system, so you can set your limits. For example, you may charge one rate for clearing snowfall up to 3 inches, then another for snowfall up to 6 inches, and so on. This is a great option for geographies that know they will get snowfall, they just can’t predict exactly how much.

Pay Per-Push (AKA Pay Per Occurrence)

A per-push or per-occurrence contract gives both you, as a contractor and your client, a little more stability in your agreement. This type of contract defines a fixed rate for every snowfall, regardless of the amount of snow, the time to clear it, or the amount of labor involved. This type of contract means you get paid the same amount every time you visit a site to clear the winter weather. Be sure to set your per-push limits clearly — you don’t want to get stuck working on a blizzard for weeks and getting paid for a small snowfall! 

Seasonal Contract

Seasonal contracts determine a single fee for a set period of time. These contracts tend to last from one to three years, and the time period depends on local weather patterns. With weather patterns changing over recent years, these types of contracts may need to include stipulations that the period could change depending on global climate change weather patterns.

What Should Your Snow Removal Contract Include?

Snowplow contracts include an extensive list of work included in the project. Mention of the work should include specific instructions for sanding, salting, and removing snow. Snow removal contracts should specifically mention the equipment to be used, and the staff supplied. Be clear in defining the physical zones that are covered in the contract and any specific timelines. 

And, of course, be sure to add payment terms, start and end dates, the amount of snow to be cleared with each push, and any additional rates for products or services that aren’t included in a standard push. Breach of contract clauses should also be included if a client cancels the contract before the predetermined date.

4 Tips for Getting Commercial Snow Removal Contracts

While residential snow removal contracts are great, we want to help you win the big deals to make the most of your snow removal vehicle fleet. Here are a few tips for getting those major commercial snow removal contracts. 

Fill out big proposals

Starting small can help get your fleet off the ground, so you may want to submit proposals to businesses like gas stations, retail stores, and small clinics. That’s a great way to flex your proposal muscles. But to make it with major commercial contracts, you must go for the big ones. You may even want to hire a consultant to help submit proposals for those major commercial entities we mentioned before, like hospitals, universities, stadiums, or government buildings. These proposals take a lot more work, but in the end, if you land a contract, your business will thrive. 

Invest in fleets of ATVs

Major commercial operations will analyze the costs associated with contracting you versus your competitors. That’s where the all-terrain vehicle (ATV) snow-plowing fleets can be a major asset. ATVs are cheaper than traditional snowplows, and they can navigate within smaller areas. They also consume much less fuel than a large truck, so they can help you lower the cost of your bid to beat out your competitors for those lucrative commercial contracts. 

Ensure preventative maintenance of your snowplow fleet

Similarly, maintaining your snowplow fleet with preventative maintenance signals cost-effectiveness and can help keep your commercial contract bids competitive. Extensive vehicle repair can be costly; the longer it is put off, the more costly it becomes. Keeping records on snowplow fleet data can help. Data on vehicle mileage, engine performance, distances traveled, and key systems diagnostics can help keep your fleet safe, and effective, and above all, keep costs down. That, in turn, will keep your bid price down and your chances of winning that major contract up. 

Leverage real-time vehicle tracking to maximize operational efficiency

Real-time vehicle tracking is also a key factor that can set you apart from other contractors bidding for major commercial snow removal contracts. The more data you can show in your bid, the better. GPS tracking capabilities are a practical way to leverage telematics solutions for data collection to enact safety measures, optimize plowing routes, keep track of maintenance schedules — and minimize costs! 

Rastrac’s snowplow GPS tracking system solutions are a great way to help land that major commercial snow removal contract.

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