# Starting out. Any advice appreciated.



## HeatMiser15701 (Feb 19, 2018)

I'm just starting out with just a few regular residential and one commercial regular customers this year. I'm starting out with my atv and a 60" plow and an el cheapo sta-green spreader. Does anyone have any advice for someone starting out? I have a full time job now and starting this as a side job for now but would like to get into landscaping as well later on and if all goes well strike out completely independently without the other job. Currently I load my atv on my trailer before going to work on the day or night before a snow event then plow before going into work (dayshift) or right after work (nightshift).


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## jonniesmooth (Dec 5, 2008)

Don't borrow money to feed your business. If you"re doing well enough to need new,more,better equipment, you should be able to pay cash for it.


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## Philbilly2 (Aug 25, 2007)

jonniesmooth said:


> Don't borrow money to feed your business. If you"re doing well enough to need new,more,better equipment, you should be able to pay cash for it.




Although I completely agree with your statement... Thumbs Up


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## HeatMiser15701 (Feb 19, 2018)

What should I purchase next, a beater truck with a plow already on it or a plow for my daily driver 2016 half ton Chevy?


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## Philbilly2 (Aug 25, 2007)

HeatMiser15701 said:


> What should I purchase next, a beater truck with a plow already on it or a plow for my daily driver 2016 half ton Chevy?






HeatMiser15701 said:


> I'm just starting out with just a few regular residential and one commercial regular customers this year. I'm starting out with my atv and a 60" plow and an el cheapo sta-green spreader.


Did you pick up a bunch of accounts since this am? If you are just starting out, I would not advise that you buy equipment, then try to find work for the equipment that you bought. That is putting the cart before the horse.

If you are making good margins with what you have, then run what you have until you find the next thing to expand into. That is the point to decide what to do...


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## HeatMiser15701 (Feb 19, 2018)

The lot in the pictures is quoted at 65 for plowing, salt and shoveling the sidewalk. Takes me about an hour total and 10-12 in salt. Not sure if this is high or low but he seemed to appreciate it. Some people seem to be apprehensive about being plowed by an ATV that's why I was asking. Most approve after they see the final result but getting the jobs in the first place proves difficult with it for some reason.


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## cwren2472 (Aug 15, 2014)

HeatMiser15701 said:


> Some people seem to be apprehensive about being plowed by an ATV that's why I was asking.


The ATV is definitely going to hurt you appearance-wise. Even though it may get the job done, it is going to have a decidedly un-professional look. Also, I have to assume that trailering an ATV around in a blizzard isn't particularly efficient.

_If you can afford it_ you would be better suited putting the plow on your 2016 rather than throwing cash at a beater that will require extra insurance, extra registration, and possibly bushels of cash in repairs.

As others have said, don't get in over your head with stuff you can't afford.


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## Liberty LLC (Dec 23, 2011)

I agree buy a plow for your truck maybe use the quad for sidewalks that will take extended time doing with a small snow blower


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## EWSplow (Dec 4, 2012)

HeatMiser15701 said:


> What should I purchase next, a beater truck with a plow already on it or a plow for my daily driver 2016 half ton Chevy?


Don't buy a beater truck. Maybe buy a good plow for a 1/2 ton. Nothing wrong with a good used plow, maybe something someone used only for their personal drive or business.


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## wishfull (Nov 22, 2017)

Not bad bad advice so far but remember that sometimes you have to bite the bullet and borrow in order to grow. Equipment isn't the only thing you need, insurance coverage is down right a must for snow plowing. A lot if not all insurance companies will not cover a claim if you do not have snow plow insurance. Research your intended market and pricing. Buy equipment based on what you find. No matter which way you go with your full time current job be prepared to loose sleep and that your personal time will suffer. It takes hard work and dedication to make a go of it on your own. You will have to take risks but try to educate yourself as much as you can before taking them. The world needs hard workers and risk takers such as yourself. Good luck.


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## Philbilly2 (Aug 25, 2007)

wishfull said:


> Not bad bad advice so far but remember that sometimes you have to bite the bullet and borrow in order to grow. Equipment isn't the only thing you need, insurance coverage is down right a must for snow plowing. A lot if not all insurance companies will not cover a claim if you do not have snow plow insurance. Research your intended market and pricing. Buy equipment based on what you find. No matter which way you go with your full time current job be prepared to loose sleep and that your personal time will suffer. It takes hard work and dedication to make a go of it on your own. You will have to take risks but try to educate yourself as much as you can before taking them. The world needs hard workers and risk takers such as yourself. Good luck.


That sounds like "wishfull" thinking...


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## jonniesmooth (Dec 5, 2008)

wishfull said:


> Not bad bad advice so far but remember that sometimes you have to bite the bullet and borrow in order to grow. Equipment isn't the only thing you need, insurance coverage is down right a must for snow plowing. A lot if not all insurance companies will not cover a claim if you do not have snow plow insurance. Research your intended market and pricing. Buy equipment based on what you find. No matter which way you go with your full time current job be prepared to loose sleep and that your personal time will suffer. It takes hard work and dedication to make a go of it on your own. You will have to take risks but try to educate yourself as much as you can before taking them. The world needs hard workers and risk takers such as yourself. Good luck.


Yes, you need commercial liability insurance, because you are in business. That would also mean you then need commercial auto insurance for any vehicle used in said business . 
If you put a plow on your truck and don't tell your agent/add it to your policy, guess what?
You're not covered.


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## RevelationL&S (Feb 19, 2018)

Don't plan your way into debt. Plan your way into profit. Profit on the equipment you already have and save a portion of what you make for buying equipment in cash years down the road. DONT FORGET TO MAKE AN EMERGENCY FUND. As you grow and become more competative you might find things breaking more often. Hope it doesnt't happen, but plan for it. You cant go wrong if you keep saving and DO NOT borrow, do leases or anything like that. God help you.


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## RevelationL&S (Feb 19, 2018)

Those driveways look awesome BTW. I wish I had pictures like that to throw up on the Revelation web site. Keep up the good work and DO NOT spend money that is not yours.


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## RevelationL&S (Feb 19, 2018)

Sorry for the triple post. Another thing all businesses do that works well is to set up a system of payment that is uniform all across the board. Revelation has a price chart for driveways that looks like this. Do not copy this number for number, but it gives you a good idea of how to set up your charts.
40' and under $12 $18
60' and under $15 $19
80' and under $20 $22
and so on - The first (lower) number is for a driveway where you dont have to reverse (imagine a parking pad in the middle of a yard where you can just push the snow straight to the end of the pad, lift the plow and be done with it.) The second number involves pulling.

1" - 5" Normal Price
6"-8" x1.25
9" - 12" x1.5
and so on

Set a similar scale for square footage of parking lots and lengths of sidewalks and add about 15% or so for commercial properties and do not back down on your prices.

You can offer senior discounts and things like that but do not back down on prices unless the client falls into a discount you set up pre meeting. If they don't go for it, move on with your honor still intact and find a better client.

It is important, critically important to set up your price charts, and stick to them, all across the board no matter if you are dealing with a person you love or hate, they all get the same value from you. Consistency in pricing is so key. Once you have implemented this, after a few struggles here and there you will begin to see many many good things that come from this. You can appreciate me later.


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## snowman55 (Nov 20, 2007)

I must disagree. Smart debt will allow quicker growth and more profits.

Key word is smart.

Standardized pricing leaves money on the table and may leave you out of potentially great contracts.

What I charge a customer for a 1 acre lot is different than a customer with 10- 1 acre lots


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## JMHConstruction (Aug 22, 2011)

An atv probably shows better profit margins and looks better than the blowers that I started with.

Sometimes you need to borrow money. I would avoid it at all costs, and make sure you are smart with it. If you have $5k cash for a beater truck, maybe that would be better spent on a down payment for a newer truck. Guys have loans all the time. With that said, don't go crazy. You still have to be able to make those payments and show profits.

As it's been said, don't buy more than the work you have. No need to spend 60k on a new truck, 7k on a v plow, and 7k on a spreader when you only have a few driveways. You have to think of the ROI on EVERYTHING YOU purchase. If it will work better in the long run, you may have to spend the extra money for better equipment that will last longer. With your current customer list, the ROI wouldn't be much with a new plow. Down the load, if you grow your route and can't get it completed with the atv, the return would be much greater.


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## Philbilly2 (Aug 25, 2007)

snowman55 said:


> I must disagree. Smart debt will allow quicker growth and more profits.
> 
> Key word is smart.
> 
> ...


Quicker growth is not always smart though mind you.

I disagree with the more profits by taking on debt. You will always make the most profit with zero debt. Getting to the zero debt with high profit margin is the challenge.

What is known as cash flow to many can be misinterpreted as profit to a young business owner.


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## snowman55 (Nov 20, 2007)

I understand quick example.

I get opportunity to service 6 sites estimated revenue For a year is $100,000 but I need to buy another truck to be able to service it.

New 3/4 ton with plow is about 45k payment will be about $800 a month should I borrow for the new truck or let the business go because I can't pay cash for the equip?


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## JMHConstruction (Aug 22, 2011)

Philbilly2 said:


> What is known as cash flow to many can be misinterpreted as profit to a young business owner


Yes, yes, yes! This is probably the biggest mistake I see new to businesses make. They don't know the difference. Your paycheck is one thing. Profit is another


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## snowman55 (Nov 20, 2007)

Good debt and bad debt

Payments for furniture = crazy bad

Payments for a $75k loaded toy truck= crazy

Loaded credit cards for junk you don't even remember buying= crazy dumb

Payments for a piece of equipment that will grow your business and make money= sometimes wise.

I have been doing this for 30 years and still have debt controlled but still dept. I also have cash in the bank so what's better? no cash no debt?


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## EWSplow (Dec 4, 2012)

snowman55 said:


> I understand quick example.
> 
> I get opportunity to service 6 sites estimated revenue For a year is $100,000 but I need to buy another truck to be able to service it.
> 
> New 3/4 ton with plow is about 45k payment will be about $800 a month should I borrow for the new truck or let the business go because I can't pay cash for the equip?


Probably not. You'll have $48,000 spent on the truck over 5 years + insurance, fuel, repairs, etc and you have a 1 year contract of $100,000. Maybe some people would do it. I wouldn't just starting out.


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## Philbilly2 (Aug 25, 2007)

snowman55 said:


> I understand quick example.
> 
> I get opportunity to service 6 sites estimated revenue For a year is $100,000 but I need to buy another truck to be able to service it.
> 
> New 3/4 ton with plow is about 45k payment will be about $800 a month should I borrow for the new truck or let the business go because I can't pay cash for the equip?


I agree... what does a 45k truck prove though?

Could you not do the same with a 20k truck?

That is 400 a month which will increase your profit margin by 50% on just one single piece of equipment...
Right??


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## Mr.Markus (Jan 7, 2010)

You don’t go by the total value of the truck, after the 1 year it still has value, lose the contract and sell it...


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## Philbilly2 (Aug 25, 2007)

JMHConstruction said:


> Yes, yes, yes! This is probably the biggest mistake I see new to businesses make. They don't know the difference. Your paycheck is one thing. Profit is another


I see it every day with guys I work with... sad, but more than not don't get it...


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## Philbilly2 (Aug 25, 2007)

Mr.Markus said:


> You don't go by the total value of the truck, after the 1 year it still has value, lose the contract and sell it...


Deprecation on a 1 year old truck?


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## EWSplow (Dec 4, 2012)

Here's a scenario: You own a truck free and clear, you find a nice used plow for $3000 - $3500. You have a good month and the plow is paid for. Every month after you have some maintenance, fuel, etc. Maybe with some of your profit, you buy a spreader. If sales are up the next season, you consider upgrading.


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## John_DeereGreen (Jan 2, 2011)

Profit? What's that? I thought we all worked because it was fun?


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## snowman55 (Nov 20, 2007)

So what truck cost me $9600 first year. sell for a loss cost me $20k but hopefully you good enough to either replace the business or resign it. Auto and equipment debt are the easiest to dump if things go south just make sure it's bought right.

Many ways to look at this and many things that effect these decisions my advice is to read and read some more. Everyone has a different comfort level with debt and goal for Thier business.

Starting with no capital is tough I did and it took my back to create some capital to allow me to buy well and grow my business.
I wouldn't make near the money I do today if I hadn't used financing.


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## Mr.Markus (Jan 7, 2010)

Philbilly2 said:


> Deprecation on a 1 year old truck?


Is it gonna outweigh the other $90k of the contract?


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## snowman55 (Nov 20, 2007)

EWSplow said:


> Here's a scenario: You own a truck free and clear, you find a nice used plow for $3000 - $3500. You have a good month and the plow is paid for. Every month after you have some maintenance, fuel, etc. Maybe with some of your profit, you buy a spreader. If sales are up the next season, you consider upgrading.


How long did it take you own the truck free and clear? Save the $3k for a spreader?time is the 1 thing you can't buy.

And let's not forget tax purpose say i had a great year tax return shows I made $100,000 but we know I don't still have the 100 k. buy a truck with financing write 50k off my taxes immediate saving of 20k in cash.


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## Philbilly2 (Aug 25, 2007)

Mr.Markus said:


> Is it gonna outweigh the other $90k of the contract?


Yes... I dont feel we are talking in terms on 90k contracts in the OP senerio. Maybe I am wrong???

I am trying to keep this at face value with what we are dealing wirh here.


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## John_DeereGreen (Jan 2, 2011)

My general rule is 25% down and if it's for a new contract 25% of purchase price as cash on hand no later than by the end of the first half of the contract period. 

I can't think of anything in this industry that is worth less than 50% of purchase price in the first 1-2 years unless you paid far too much to begin with.


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## snowman55 (Nov 20, 2007)

You are right Philly I am off topic my advice to the young man is " do something else"



snowman55 said:


> Snow removal is a hard life.
> 
> Some do it on the side for fun but those that make a career out of it have a very tough job.
> 
> ...


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## snowman55 (Nov 20, 2007)

To add to the negatives of this career. No sick days getting in my truck right now 102 fever feel like death and 5 days straight of work ahead of me .


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## RevelationL&S (Feb 19, 2018)

This


EWSplow said:


> Probably not. You'll have $48,000 spent on the truck over 5 years + insurance, fuel, repairs, etc and you have a 1 year contract of $100,000. Maybe some people would do it. I wouldn't just starting out.


What you want to do is avoid debt and use your thinking cap to keep you out of debt when it comes knocking on your door with a twinkle in it's eye, a flashy white smile, a suit n a tie, and a big sign that says "here to get you out of the mud".

You will be stronger and smarter for getting out of the mud without the "help" of debt. Just a few cents I learned from a few good men. A few good men'll change your life.


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## HeatMiser15701 (Feb 19, 2018)

That's one thing I have always done in my life has been to underestimate income and overestimate expenses. Standardized pricing for residential customers based on length or square footage would be a good idea and I'm working on this for next season as this one is almost, but not quite, over. I'm thinking of adding the residential estimates on the back of my business cards and making sure "estimates" appears with them. 

I was also thinking of buying a spreader for the back of the ATV but have since decided against this in favor of a larger and better quality push spreader unless I pick up a larger lot. That way I have one spreader that can do lots as well as sidewalks. Driving a 4' ATV down some of the 3' wide sidewalks in our neighborhood may not be advisable. I was looking at the agri-fab 45-0502 which is their salt spreader that comes with the cover, grate to prevent large clumps from reaching the discharge and clogging it, and a shield to keep the spread width to 4' or less. 

I may also dip my toe slowly into light landscaping this spring as well starting with my commercial client (mowing and trimming), just to keep income flowing throughout the year. 

As far as commercial pricing my current price I believe for my only commercial client so far worked out to about $.10/sq yd for plowing and $10+ material cost for salt and a flat $10 for shoveling his sidewalks. Structured this way because he wanted different services at different accumulations, (1"+ shoveling, 3"+ plow, and depending on temps and risk of ice the salt)


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## JMHConstruction (Aug 22, 2011)

Here is another thing to think about along the same lines as the debt/no debt. I'll try to make this understandable, but it may make more sense in my head.

You can't grow your debt too high, too fast. I will use my business as an example. I build decks. I have 1 crew with a few guys. I also have to stay within my areas pricing. I am in the "league" with the bigger companies out here who have multiple crews. I don't care about what the Craigslist guys are charging, because my customers don't want those guys. My customers care more about quality than price.

Where I need to worry about price is based on what my market will allow from competing with the other top companies. They all drive the new trucks, have shops, spend quite a bit on advertising, etc. They can also split up their overhead between multiple jobs at the same time. I only have 1 crew that needs to cover all my expenses, but I still can't price myself out of the competition. I have to try and keep my overhead at a third of what they do inorder to still show the same profit margins.

That's why I drive an older (but still reliable truck) my payment is much lower than theirs. I also have put off getting a shop. It has in a way kept me from growing, but it's working for me. This same can be applied to clearing snow with 1 truck, and thinking you'll see the same dollar amounts as those with multiple trucks. They've had to add trucks to not only increase margins, but to also cover added expenses.


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## JMHConstruction (Aug 22, 2011)

HeatMiser15701 said:


> I'm thinking of adding the residential estimates on the back of my business cards and making sure "estimates" appears with them.


Just write "starting at"


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## HeatMiser15701 (Feb 19, 2018)

JMHConstruction said:


> Just write "starting at"


That's exactly how it's phrased on my Facebook page.


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## HeatMiser15701 (Feb 19, 2018)

Also please let me make this clear, my "business" is at the same stage as the kid next door going door to door mowing grass. But I suppose I have to start somewhere.


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## HeatMiser15701 (Feb 19, 2018)

I appreciate all of your advice guys. I have learned a few things already, number one being grease everything! Often. Luckily I had a warranty issue with my plow push tubes before too much longer upon taking it apart I noticed a lot of wear and rust already. So upon putting the new pieces on I went heavy on the grease on all of the moving parts.

I also pulled the trigger on a Earthway 2040piplus spreader with cover and deflectors, total cost of just over $200 with a 5 year warranty. Anyone every used Earthway products and have feedback on them?


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## JMHConstruction (Aug 22, 2011)

I've never used that particular one, but I started with the red single bar handle one (not sure what the model number is), and it's been working hard every winter for about the last decade (little less). It is more than worn, and has been a backup for the last few years. It still sees some use, but it needs to be retired. I think you'll be happy with your choice.


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