If you own a snow removal business, a detailed snow removal contract documents your policies, helps avoid misunderstandings on the job, and it can get paid on time. A well-laid contract can also help keep your clients happy and grow your business every season.
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You don’t always need to stick to one type of contract for every client. Evaluate client location, accessibility and estimated weather conditions to help make sure your work remains profitable.
Consider these five contract types for your snow removal business clients:
1. Seasonal: Clients pay your snow removal service a fixed fee no matter how often it snows. These contracts usually last three to five years to save time and eliminate a long vetting process every season. If winter is particularly mild one year, it could balance out a heavier winter in the future — a win for both you and your client.
2. Pay per push: If pay-as-you-go is what your client seeks, this contract can be beneficial if you have to visit more than once per day. As a snow plowing business, you would charge for each visit.
3. Pay per inch: This relies on brackets of snowfall (for example, 1-3 inches or 3-6 inches). Local weather stations determine the inch depth of snow to avoid disagreements between you and your client. Know that this contract can make it harder to budget.
4. Pay per event: You charge a flat rate per snowstorm. This could be a beneficial one-time charge in areas that are not as active, but it can be less profitable in areas with constant snow events.
5. Time-based: You charge for every event and push by the hour. You set the contract price. You could also charge by the hour, which could be lucrative for larger properties. But beware: Some clients may pressure you to work quickly, which could be dangerous.
Commercial and residential snow removal contracts can offer similar services. But, there are differences in payment structure and the tools for the job.
These contracts include apartment buildings, large parking lots, restaurants or grocery stores. Commercial projects have more liability. They’re liable for people on premises and nearby vehicle traffic. And to accommodate the larger space, your business may also need more trucks, loaders and staffing, which equals a higher cost.
A seasonal contract may be the best fit for commercial snow removal. Since seasonal contracts are typically signed for a few years, both parties will likely benefit over time based on average overall snowfall.
Typically, residential snow removal contracts include a homeowner’s property. These contracts tend to be more flexible than commercial contracts.
Residential contracts could be seasonal, per push or per event. A seasonal contract would ensure that you’re paid even if there are only a couple of snowstorms. A per-push contract means they pay each time you visit, which may work best in low snowfall. Per-event contracts tend to work best with low volume but frequent snowfall.
Comprehensive snow removal or snow plowing contracts include details such as:
The contract establishes the scope of work and the overall performance of your snow removal business. It tells clients how you will handle their needs.
It can also include specifics on sanding, salting and removing snow. The contract could also cover the type of equipment you’ll use and the size of the crew.
Your response times to snow removal should be consistent for each snowstorm and based on your contract terms.
Snow removal businesses are often required to have insurance due to the risk of injury and property damage.
For example, if you damage a client’s mailbox while shoveling snow, general liability insurance could help pay for repair or replacement.
Reliable business insurance can build trust with your client and help protect everyone in your partnership. Document your coverage in all of your contracts to reassure clients and prove your professionalism.
Make it clear in your contract how you charge, when you bill and payment terms for delayed payments.
Snow plowing insurance coverage can help protect you year-round. And NEXT makes it simple to design the insurance coverage you need.
Choose from general liability, workers’ compensation, professional liability, tools & equipment, commercial auto and commercial property to get the coverage you need at a price you can afford.
Review your policy options, get a quote and purchase coverage — all in less than 10 minutes. Your certificate of insurance is available immediately after you pay your premium.
If you have questions, our licensed, U.S.-based insurance professionals are ready to help.
Get started with a free quote from NEXT.
Kim Mercado is a content editor at NEXT's blog, where she writes and edits posts for small business owners. She enjoys helping entrepreneurs solve their business challenges and learn about insurance. Kim has contributed to Salesforce, Samsara and Google.
You can find Kim trying new recipes and cheering the 49ers.
