1. Calculating Major Expenses

Take all major expenses into account, including but not limited to:

• Rent: Almost every snow removal company has an office for maintaining their paperwork, clientele, inventory, and records. If you do too, take it into account because that’s a major expense.
• Gas: Gas is not as cheap as you think. Add up the money spent on gas to reach your client’s home or office for every project done in the last month, and I bet the sum you’ll get will surprise you.
• Marketing Budget: If you don’t have a marketing plan, create one. In today’s saturated market, there’s no way to succeed without a proper marketing strategy.
• Tools and Equipment: Create a comprehensive material takeoff by calculating the cost of materials you will need to finish a job. Don’t forget to take the quantities and material types into account. Furthermore, also calculate the cost of all the equipment you will have to buy.
• Labor cost: Your biggest expense will be your employees’ salary. For most snow removal companies, labor cost makes up at least half of their total budget.

This was just a list of the major expenses that come to my mind. If any other expense comes to your mind, add it to your list. Remember, the more thorough you are here, the more likely your business is to succeed later on. So don’t leave any stones unturned and give your list of expenses as much time as you can.

2. Calculating Your Service Prices

I’ve already covered the method for pricing your snow removal services at length in this post. So please go ahead and read that post, calculate your service prices, and then come back here.

3. Calculating Your Profit

Once you have calculated a price for your services that is profitable for you, affordable for your clients, and based on your local market rates, the next step is quite simple.

Just take the price you’ve set and multiply it by the number of clients you aim to have — please keep in mind that your ideal number of clients should be realistic. Now, take the sum you get and subtract the sum of expenses calculated in the first step from it.

The sum you will get now is how much money you will potentially make from plowing snow.

So that’s how you can find out how much money you can make from running a snow removal operation with three simple steps. If you have any questions, drop me a comment below!