After four straight punishing winters, many snow removal contractors have had little if any work so far this season. Aside from a handful of locales which include Michigan's Upper Peninsula, Colorado and pockets of the Pacific Northwest, the majority of the snowbelt had fewer than 5 inches on the ground as of early January. One of the biggest markets for snow removal, Chicago, had zero.
For many contractors, the pinch is definitely on. "This is very challenging … it hurts cash flow," says Jan-Gerrit Bouwman, partner and sales manager of Grant & Power Landscaping in Chicago, IL—a 2009 Pros in Excellence Award winner.
Grant & Power has a balanced portfolio of fixed and per-push contracts, in addition to a great number of customized contracts. "We do have provisions for 'no snow' and rebate the customer," Bouwman points out in reference to the fixed contracts. "We have been well over the average of snowfall for the last four years, so the customer comes out ahead. Because we have a 90% resign rate with customers, the customer knows that it will average out. But the perception is still there. It might mean that next year more contracts will be per push."
Caught by surprise. Given what had taken place each of the previous four seasons, quite a few contractors planned on a strong 2011/2012. Many looked to expand their snow removal operations, all while an influx of new plowers entered the business. As a result, a lot of new snow removal equipment was purchased for this season—and now much of it sits underutilized.
"We do have equipment sitting, and yes, it costs us—but that is also business," Bouwman reminds. "Most of our equipment will also be used for the landscaping season, but it is not a good sign to have equipment just sit there."
Other services fill the void. For some contractors, additional service offerings have helped fill the void left by a lack of snow and ice. "We have been very busy with landscape-related services up until now," says D.J. Vander Slik, president of D.J.'s Landscape Management based in Grand Rapids, MI. "I'm sure the lake effect snow machine will turn on soon and keep us busy."
"We did a lot of dormant pruning earlier this year, and we might start earlier in the spring by pushing spring cleanups and maybe some lighting jobs," Bouwman says.
"We had a surprisingly busy December and were able to exceed last year’s December revenues, even without snow," said Doug McDuff, president of Landscape America in Wrentham, MA—also a 2009 Pros in Excellence Award winner. "The warm temperatures extended our hardscape season right up through the new year. We were a little skeptical taking on work that late in the season, but the gamble paid off and we wrapped up the projects before the frost."
McDuff and his crews have since jumped on some ornamental tree pruning work that was sold during the fall at a “winter pruning” rate. "February looks like it will be a rough month if the weather continues this way, though," McDuff cautions. "But Andy (brother) and I will be focusing on building systems and strategies for the spring. Hopefully the weather patterns change and we get some snow—along with some money to make it through to March."