How do you start a snow removal business?

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Accepted Answer

You start a snow removal business by gaining industry knowledge, developing a business plan, and registering and insuring your business. The first step you must take is to conduct thorough research and learn about the snow removal business and industry.

You will want to look into who your competitors are in the region and how established they are. Are they large corporations or small businesses? Does the city or county already have a long-term contract in place with a company? Is there a high demand for snow removal in the area?

If you find a higher competition density in one area over another, you may consider operating in an area with fewer competitors. If you find that the demand is higher in a particular region, you may want to focus your business operations there.

With a business like snow removal, you want to be sure that you are setting yourself up for success, which means being backed by a well-researched strategy rather than choosing a location based on convenience.

After you have learned about the industry, it is important to develop a business plan. It is important to take into consideration the following:

What are your startup costs?
What are your ongoing costs?
What is your target market?
How much can you (and will you) charge your customers?
What will you name your business?

Your business plan needs to account for these issues and set clear growth targets. Set regular check-in points for yourself to evaluate your revenue and milestones. Make sure that your plan is achievable and trackable. You want to be able to do a self-assessment and know if you are on track with your plan.

Next, you must register, license, and insure your business. Registering your business means deciding if you will operate as a sole proprietor, partnership, or limited liability corporation (LLC).

The primary advantage of an LLC is that it reduces your personal financial risk. A sole proprietorship is simple to set up, as is a partnership if you're going into business with other people. However, both of those structures leave you exposed to any financial liability that might come up from operating your business.

Once you have decided how you will operate, it is time to choose a business name. You want something unique and easily identifiable related to the industry or business. Once you have a short list of names, you can go to www.uspto.gov to see if they are available.

The next step is to secure your equipment. Equipment is one of the most important factors in a snow-clearing business. Unfortunately, securing the right equipment will be costly. It is easily the largest expense when starting this type of business.

The most important investment you can make is to have a reliable truck. This will cost tens of thousands of dollars. On average, a reliable snow plow truck will cost a minimum of $35,000. Many snow-clearing business owners have reported spending substantially more than $35,000.

In addition to a reliable truck, you will need a plow, snow blower, and salt sprayer, typically costing around $10,000 per truck. Leasing a truck can greatly reduce the startup expenses for a snow-clearing business. However, the lease payments can be high and significantly increase your operating expenses.

You will also be required to get the appropriate insurance for your business. At a minimum, you will need to have general liability insurance. This coverage protects your client's physical property and protects you if something happens during operating your business.

While not required, it is recommended that you also have the following insurance policies:

Commercial Auto: This protects your business's vehicles to transport tools and equipment. You can also add coverage that allows you to cover equipment that is permanently attached, such as bolted toolboxes or racks.
Worker's Compensation: This covers employee medical costs and a percentage of their lost wages if they are hurt on the job.
Professional Liability: This helps to pay for work oversights that can result in a financial loss. For example, if someone says you didn't deliver the services you said you would provide, they can ask you to pay for any losses. Professional liability can help cover the costs of defending your business or fixing the problem.

Skills	Percentages
CDL	29.50%
Loaders	18.30%
End Loaders	10.56%
Plow Truck	6.01%
Snow Blowers	5.30%

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