# Questions Regarding my Small Snow Plowing Business



## SnowRemoval1 (Nov 9, 2014)

I have some large issues and its due to my poor planning. So, I'm running through my numbers this evening and its not looking so hot especially if we have a weak winter. 
-$4,000 Snowdogg Plow
+ $565.00 on DEFINITE CLIENTS (10)
+$840.00 on POSSIBLE clients each time it snows 2". (11)
-$500.00 a month on Commercial Insurance
-$100-200 gas a month

See, here are my problems and I'm not sure what the best way of going about this is. Last year, I sub contracted out my work and made 75% returns by not having a truck, plow ect..well, the sub contractor is now working as a sub contractor for Everest Snow Management which is a huge company in Chicago. He bought a large truck and plow and I thought I was out of luck. Since I have small apartment/condo parking lots, I bought a 2014 Nissan frontier for both lawn and snow and put a 10% down payment on a SnowDogg snow plow which comes out to $4,000 total. So, my clear issues are the weather....if it doesn't snow enough I'm screwed. I have a $200 car payment a month as well as I want to earn enough money to pay the plow and I got a quote from progressive of $6,000 a year which comes out to $500 a month roughly for full coverage/liability insurance. Naturally, I can prob get that down as I have a broker looking into it but my age of 19 doesn't help. I'm in a bad spot as I started this too late and didn't get enough ads out and am feeling screwed and plus there is a low baller out there who is screwing us all and taking my clients that I thought I would have. So, what do I do? 

Do I either 
a). Continue with the purchase of the snowdogg snow plow, do the at least 10 lots and make $500+each time it snows (which is ****) with crazy insurance and potentially work with a sub contractor making $55 an hr to help pay costs. 

b). Waste the 10% down payment on the plow and don't buy it and the guy who worked under me last year who is working for Everest has an extra plow truck which is a 2005 Chevy Colorado with 180xxx miles with a small western plow. The problem or maybe good thing is this would have no insurance on it and id be responsible for my 10-20 small parking lots as well as getting paid by him to do his 5 around the area. Keep in mind that these are ALL located within 6 blocks of each other. 

c). I back out completely of this plowing seasonal business, say screw the customer and prepare for an early lawn season where I make extremely good money. 

Any options in between? Such a horrible problem I'm having right now. The clients aren't coming in as I thought they would due to someone who doesn't pay all the overheads taking the business away, I thought I would be covered under personal auto like State Farm told me ahead of time before I bought my truck and plow, and I thought I'd be making more than $500 each time it snows. For me, that is not a business and I'm not sure what to do. I don't want to take the risk but for me $4-6k for insurance is too dam high. That would be AT LEAST 50% of my profits IF I ended up getting all my 21 clients. Not to mention the year would be a total loss after paying for the plow. And say we don't get 7 snows, I'm even in MORE of a loss. Then if I use someone elses truck with no insurance, I'm responsible but saves me 4k-6k a year AS WELL as the money for not buying my own snow plow...and I can use his plow for my own 10-21 accounts. Then I don't want to screw my customers over as they are my main ones for YEARS and I also have them for lawn service. But even then if I go through with the plow I bought, do my clients, work as a sub contractor for another business, will it be totally worth it in the long run. 

I need some advice guys. Totally lost on what to do and the season basically starts in 2 weeks.


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## grandview (Oct 9, 2005)

I wouldn't pay cash for the plow,3-4 loan on it will cost you 1,000.00 a yr. Insurance,you should know if your a business they won't cover you. Little lite on the customer list. How are your prices to everyone else.


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## SnowRemoval1 (Nov 9, 2014)

Theirs a photo of 70% of the lots I do. I do between 2-5" is $55 for the parking lot and between 5-8" $65 for the parking lot. Sidewalks in front including salting (light) are $20 for 2-5" and $25 for 5-8".


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## Kevin_NJ (Jul 24, 2003)

If you "screw" the customers that did sign up with you, what makes you think you'll still have them as lawn customers next year?


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## SnowRemoval1 (Nov 9, 2014)

Exactly....now you can see the tough situation I'm in.


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## PremierSnowPlow (Dec 19, 2013)

I'd start out by buying a used plow instead of brand new. Find cheaper ins, its out there. And as the saying goes, "takes money to make money". If you don't see a 100% profit return this year, learn from your mistakes and plan better for next season so that you can actually turn a profit. You're young still, get a business plan together and you'll do fine and even take away the " low ballers" business when they take the money and run.


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## Mr.Markus (Jan 7, 2010)

Few people do well in this business right out of the gate, building a business takes perseverance .$500 profit per push isn't lavish lifestyle money but it's profit...
It's like saving for retirement, the sooner you start the better you'll do...


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## SnowRemoval1 (Nov 9, 2014)

Totally agree. But I just heard from another client and they are broke and don't need plowing. There goes $200 of that $1,500 projected. Ugh.


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## MK97 (Oct 9, 2013)

Not to kick you when you're down, but the whole approach you took doesn't make any sense. 

1) Who buys a frontier (a new one at that) for commercial snow and lawn service? I think it barely qualifies as a half ton truck. I don't imagine it will live very long under commercial use. Finding a good used 90's Ford, Dodge or Chevy would have been far better for just starting out. There's a reason there are still tons of them being used for plowing every year by all size companies. 

2) Full coverage vehicle insurance is NOT commercial insurance. You need both, so plan on upping that insurance figure. 

3) Scrap the Snowdogg option, and lose that $400 as a life lesson. Use the other guys truck and cover your accounts along with his. Is he charging you for the use? 

This is really the only way I see you not losing your truck and plow which will be a 7 year reminder on your credit report, if it's a light season. 

Don't screw over your customers. A pissed customer will be very loud and make sure they let everyone know you're a crappy service provider.


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## PremierSnowPlow (Dec 19, 2013)

Also, don't be mad that you lost a client, because you'll pick up more during the season. This year I've had 3 people call me saying that they no longer need it due to moving out of state. I signed more to cover them already.


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## Banksy (Aug 31, 2005)

SnowRemoval1;1865434 said:


> I need some advice guys. Totally lost on what to do and the season basically starts in 2 weeks.


Again, dump the debt from the Frontier you shouldn't have bought and get something a littler older and cheaper that is better suited for plowing. That's where I would start and then the commercial insurance won't sting as bad. Insurance for you will be higher than for an old timer like Grandview . And if you did get a real plow truck, you could very possibly plow for somebody else in addition to doing the accounts you already have. Plus, many commercial type places have already lined up their plow guy for the season. This is why July is a better time to figure this out.

You've been given some advice and you either argue or justify why you made the decisions that you did. Do you know a guy in Kalamazoo, MI by chance?


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## jimbo64 (Oct 20, 2011)

MK97;1865694 said:


> Not to kick you when you're down, but the whole approach you took doesn't make any sense.
> 
> 1) Who buys a frontier (a new one at that) for commercial snow and lawn service? I think it barely qualifies as a half ton truck. I don't imagine it will live very long under commercial use. Finding a good used 90's Ford, Dodge or Chevy would have been far better for just starting out. There's a reason there are still tons of them being used for plowing every year by all size companies.
> 
> ...


Good Advice. It's too late to cancel your customers and hope to get them back in the future. Do what you have to do to keep what you have and spend the winter thinking out a better business plan.


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## plowguy43 (Jan 2, 2008)

Even if state farm didn't drop you, being a personal policy they wouldn't have covered a loss if you were making revenue while plowing. Personal policies will usually cover if you do a neighbor's driveway for free only. 
Second- your truck insurance will only cover what is done while in the truck, meaning if you step out and shovel a walkway you will need a separate GL policy to protect you against slip and falls.

If you are starting out, buy used trucks and used equipment. Heck I make good money in my business and am going on 8 year's and still buy used trucks. In 2012 I finally purchased a new plow but I'm still running it.

Any business owner before spending a penny needs to come up with a business plan. Then they need to look into what their costs will be to run the business in order to find out what to charge for their product. That is what the apartment owners are doing right now- they got your price and are shopping for others to see what the best option is.

At this point I'd call around and find a landscaper and ask for quotes on all your properties and sub them out. Make what you can this year and learn for next year. I say go this route so the service doesn't suffer (hopefully) and you can keep the accounts, plus the liability for any accidents is on your sub (make sure they have insurance and list you as an additional insured). Then next year you'll still have your accounts and be in a better position all around to make money.


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## mark268 (Oct 10, 2007)

OR.... buy what you want to buy, have fun and take it as a loss this year. Live and learn. At least you will have a new truck and plow


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## Derek'sDumpstersInc (Jul 13, 2014)

With the photo you posted, I say ditch the truck and plow for it. With no bigger lots than you are servicing, why not get a ZTR/ATV plow for one of your zero turn mowers (which I'm sure you already have) and plow with that. When done, throw it back on the trailer or drive it next door to your next account and do again. Put down salt with a walk behind spreader or a 5gal bucket and the "chicken feed" method. Haven't priced them, but would guess the ATV plows can be had for around $1000.00 new, less used off of CL.

MONEY PROBLEMS GONE!


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## Plowtoy (Dec 15, 2001)

Banksy;1865758 said:


> Do you know a guy in Kalamazoo, MI by chance?


:laughing::laughing::laughing:


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## MSsnowplowing (Nov 1, 2012)

plowguy43;1865786 said:


> Even if state farm didn't drop you, being a personal policy they wouldn't have covered a loss if you were making revenue while plowing. Personal policies will usually cover if you do a neighbor's driveway for free only.
> Second- your truck insurance will only cover what is done while in the truck, meaning if you step out and shovel a walkway you will need a separate GL policy to protect you against slip and falls.
> 
> If you are starting out, buy used trucks and used equipment. Heck I make good money in my business and am going on 8 year's and still buy used trucks. In 2012 I finally purchased a new plow but I'm still running it.
> ...


State farm does cover you while plowing with a personal policy on your truck. 
You can also get liability insurance thru them for around $600 for a Million policy. 
There is a catch with them, you can only plow out residential driveways and anything commercial with more than 5 parking spots they will not cover it.


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## thelettuceman (Nov 23, 2010)

derekslawncare;1865868 said:


> With the photo you posted, I say ditch the truck and plow for it. With no bigger lots than you are servicing, why not get a ZTR/ATV plow for one of your zero turn mowers (which I'm sure you already have) and plow with that. When done, throw it back on the trailer or drive it next door to your next account and do again. Put down salt with a walk behind spreader or a 5gal bucket and the "chicken feed" method. Haven't priced them, but would guess the ATV plows can be had for around $1000.00 new, less used off of CL.
> 
> MONEY PROBLEMS GONE!


Take this advice !!!!


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## grandview (Oct 9, 2005)

Plowtoy;1866094 said:


> :laughing::laughing::laughing:


don't get me started .


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## Derek'sDumpstersInc (Jul 13, 2014)

SnowRemoval1;1865630 said:


> Totally agree. But I just heard from another client and they are broke and don't need plowing. There goes $200 of that $1,500 projected. Ugh.


SR-1,
Unfortunately, I think you may be too young and inexperienced to realize JUST how over your head you are. I think you may still be trying to find a PAINLESS way out of this situation when instead, you need to be looking for the LEAST PAINFUL remedy to your problem. I would get rid of the new truck that you can't afford and the plow for it. Go back to the dealers that sold them to you and explain your situation, you may get lucky with the plow. If it hasn't been used, you might be able to get all your money back (minus the installation charges) provided it is still able to be sold as "new". As for the truck, I'm sure that is going to cost you a few thousand to get out of. See if maybe they will put it on their lot and sell it to someone who will take over your payments or something. Again, I don't see you getting out of the truck cleanly, but spending a few thousand to save your (and your cosigner's) credit rating will be worth it down the road. Hope this helps.


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## leigh (Jan 2, 2009)

Your 6k ins is way out of line! Try geico commercial, got a quote of 1200$ a year for my gmc 4500.My personel truck is 1100$ commercial through state farm,my liability including my bobcat skid and mini x and 10k in small tool theft is 2k.Travelers for lia.


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## plowguy43 (Jan 2, 2008)

MSsnowplowing;1866148 said:


> State farm does cover you while plowing with a personal policy on your truck.
> You can also get liability insurance thru them for around $600 for a Million policy.
> There is a catch with them, you can only plow out residential driveways and anything commercial with more than 5 parking spots they will not cover it.


Interesting, I'd have to view an actual policy and its exclusions before I'd rely on that. State Farm does offer Commercial Auto policies that I would agree would offer that coverage.

And the million for $600 sounds like an Umbrella policy and not a GL but once again, I'd need to see it before really making a judgement on it.


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## NBI Lawn (Oct 15, 2007)

MSsnowplowing;1866148 said:


> State farm does cover you while plowing with a personal policy on your truck.
> You can also get liability insurance thru them for around $600 for a Million policy.
> There is a catch with them, you can only plow out residential driveways and anything commercial with more than 5 parking spots they will not cover it.


While I am not a State Farm agent I am a licensed personal/commercial insurance agent. Companies will cover a vehicle with a plow on it as long as it's for personal use only. As soon as that vehicle is used for making a profit there is NO coverage on the vehicle...while it's plowing.
$600/yr will not get a $1M GL policy anywhere. Someone is lying to you or your agent did something wrong and I would have it reviewed before there is a claim.

Also, be careful when someone tells you X is cheapest, go there. Insurance premiums are based on credit, driving record (obviously), vehicles insured, prior claim history,equipment listed on policy and years in business. Some prefered insurance companies won't write a commercial policy for a company with less than 3 years experience. I laugh when I hear people say "I only pay $600 for auto..."
that's because they have state minimum coverage and a 1992 Ford Ranger. 
Basically when someone tells you the "best deal" is with X company will never 
hold true since everyone's situation is different.

I would call State Farm directly, not the agent, and ask them if you're plowing commercially will there be coverage on a personal policy. My guess is no. The coverage may extend to plowing family members driveways or commercial properties you own up to 5 parking spaces.


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## Banksy (Aug 31, 2005)

Good stuff, NBI.


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## NBI Lawn (Oct 15, 2007)

Also based off a previous comment by the OP... Liability insurance on your auto doesn't cover a slip and fall claim.


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## Flawless440 (Dec 6, 2010)

grandview;1866512 said:


> don't get me started .


Ha Ha.. Were is that guy at??


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## Flawless440 (Dec 6, 2010)

Sounds like your prices are low.. I stick to a $100 min.


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## MK97 (Oct 9, 2013)

Not sure why this is still be discussed. Pretty sure OP isn't coming back, lol. 

Figure he's either in a corner crying, rocking back and forth. Or assumed we are all idiots and he will continue on with his plan on using his "Fisher Price, My First Plow Toy".


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## NBI Lawn (Oct 15, 2007)

MK97;1870271 said:


> "Fisher Price, My First Plow Toy".


I LOL'd


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## BRL1 (Sep 13, 2014)

My advice to you would be to hit the streets send out letters and get some contracts that make you money. those prices are very low for lots. I don't drop the plow on a lot for a min of $100 and $50 for res. you have to remember your liability is on the line here. My brother and I have been doing lawns sense ive been 15 and just this year bought a snow set up. Same principal with contracts though, if it doesn't make money move on! I like the idea of buying a plow for a zero turn or atv. If you follow the advice of people on here you will be successful. I started with a Mazda B4000 and now have 2 Duramax's 1 Chevy 2500 reg cab (plow truck) and a ford F250. Youll get through it


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## NBI Lawn (Oct 15, 2007)

Just a heads up... I got curious this week and contacted State Farm underwriting, not an agent. They do not cover any commercial use (plowing) on a personal auto policy.


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## SnoFarmer (Oct 15, 2004)

MSsnowplowing;1866148 said:


> State farm does cover you while plowing with a personal policy on your truck.
> You can also get liability insurance thru them for around $600 for a Million policy.
> There is a catch with them, you can only plow out residential driveways and anything commercial with more than 5 parking spots they will not cover it.


I challenge all of the above.

1. your personal auto policy does NOT cover you while plowing.
The only variance to this is if you are plowing your personal drive, then it would probably be covered under your home owners policy.

2 there is no such policy that would limit you to plowing residential drives over parking lots.

Your INS does not care, plowing for money is all commercial work.

Also, even if you plow for free you are not covered under your auto INS.

and $600 a year for a commercial vehicle policy,:laughing: maybe back in 1980

If you utilize your personal vehicle to plow your own property, your personal auto policy will provide coverage. However, most personal automobile insurance policies exclude coverage for vehicles used for business purposes. Assuming you have a snow plow business, several types of insurance policies will protect your vehicle against damage as well as pay for any injuries or damage you cause to others while plowing.

If you utilize your personal vehicle to snow plow for profit you must obtain a commercial insurance policy. This type of policy is often called a business auto policy. A business auto policy provides bodily injury and property damage liability protection if you injure someone or damage another party's property while using the vehicle to plow. Bodily injury liability pays for the medical expenses of the injured party as well as legal fees that may result from an accident you cause. Property damage liability pays to repair or replace property you damage in an accident. A business auto policy will also provide collision and comprehensive coverage to protect your personal vehicle and the plow if it sustains damage during a plowing accident.
Snow Plow Insurance

You can purchase snow plow insurance as a "stand alone" liability policy for a specified period of time. Snow plow insurance policies provide seasonal coverage for plowing. For example, your policy may cover plowing from October to April of each year. In most cases, a commercial auto policy is mandatory to obtain a snow plow insurance policy. Both the snow plow policy and commercial auto policy limits must be similar. For example, if you request $500,000 of snow plow liability coverage, your commercial auto policy must be at least $500,000. A snow plow policy typically provides coverage for residential driveways, private roads, apartments and retail complexes. Some policies exclude coverage for plowing large commercial locations.

Business owners' purchase general liability insurance for protection against lawsuits. General liability insurance pays your legal defense if a client or injured party sues you. Liability coverage can range from $500,000 to $1,000,000 or more depending on your needs. Some insurance companies may add snow plow coverage to a general liability policy to cover your snowplowing business. Rather than purchasing individual snow plow insurance, you can choose to purchase a snow plow rider to use in conjunction with a general liability policy. The insurance rider alters the general liability policy's coverage and terms to cover snow plowing.
Considerations

Some snow plow insurance policies restrict the type of vehicle you can use for plowing. Many policies limit vehicles to trucks with a plow on the front. The insurance company may need to provide other types of coverage if you have a car or other type of vehicle that may not qualify for coverage.

http://smallbusiness.chron.com/insurance-need-use-own-vehicle-plow-12881.html

If you own a truck and plow and during the winter months, plow a few people for cash, or do plowing as a full time business, it's important to have snow plow insurance in place.

A personal auto insurance policy typically does not include "for profit" snow plowing activity. If snow plowing for income or operating as a business, you should purchase a commercial policy that covers you for the complete snow plowing operation.

There are two aspects to consider: coverage for damage to the snow plow equipment or truck, and liability associated with damage caused by performing the snow plowing. The other thing with this is hired and non-owned auto coverage.

If you have a snow plow business and there are other people out plowing for you on your behalf using their own trucks, make sure you add a coverage called Hired and Non-Owned. That is for commercial vehicles that you hire and non-owned vehicles used so that the liability from your policy extends to the operations for people that you hire to plow for your business.

Ask your agent whether a business owners policy may be a good fit for your snow plow business. The policies will often include general liability insurance, loss of income and other various coverage options for your business including property insurance.

Trucks and plow equipment don't come cheap should you need to replace them. Make sure you have coverage in place in case you damage or have equipment stolen.

If you do have employees working for you, it's a pretty good chance you'll need workers compensation insurance for those employees. Your state department of insurance is a good starting point coupled with your licensed agent.

Review what coverage options you need and what coverage limits will be best for your snow plowing business.

http://www.commercialinsurance.net/snow-plow-insurance


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## NBI Lawn (Oct 15, 2007)

Well that sums it up Thumbs Up! I was being vague but you got it all covered there


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## BRL1 (Sep 13, 2014)

Soooooo OP what are you gonna do? 
That's the real question we are all wondering here lol


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## MSsnowplowing (Nov 1, 2012)

I checked into it. I was wrong about state farm. 
Darn agent lied to me. 
Bet he was lying about the gl policy too, good thing I didn't go with them.
That is what I like about this site you can learn a lot from other people.
Everyone have a great season and op let us know what happens.


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## NThill93 (Dec 14, 2013)

wonder if the OP has insurance for his landscaping business where he "makes a ton of money"?


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## leolkfrm (Mar 11, 2010)

don't forget to figure the tax implications....might not be as bad as you think when you offset your summer income


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