Looking for tips on creating winter snow removal contracts? You've landed on the right blog! Phil Harwood from Snowfighters Institute came along for his second time on The Weather Lounge podcast and gave us the inside scoop about how contracts are developed, minimizing risk, and the pitfalls to avoid.
After each winter season, there is a period where both the clients and contractors think about renewing their snow and ice removal contracts. Both sides go through benefits, profit margins, relationships with each other, and a typical reflection/analysis of the past season. Usually, the process of a snow contracts goes through a 12-month cycle. Its renewal process begins by mid-spring, then during the summer, companies begin signing. Contracts then go active in the fall/winter and the cycle begins again after the winter. Here at WeatherWorks, our winter planning is very similar as we send out surveys for feedback and ideas in the spring, then work on implementing improvements during the summer and fall ahead of the next winter season. For snow removal contracts, changes are made each year to better fit the needs of the contractors and clients. The changes are usually positive depending on the season ahead and the data presented to the contractors.
However, it's not only contracts that snow and ice businesses are dealing with in the summer and fall. In 2021, many businesses have been dealing with multiple hardships due to the pandemic, but some weren't directly related. Take staffing for example... The younger generation now seems to have a higher emphasis on going to college and getting a degree. Meanwhile, working within the field is becoming less and less "of the essence" for the younger generation. Also, the mindset of these younger employees is much different than 20 or 30 years ago. "If you do not understand that, appreciate that, and speak to that mindset, you are going to miss the mark; you can hire as many people as you want, but you will just blow through them if you do not work to their needs as well", Phil said.
This is something that is very important for the younger generation because they did not grow up the same way as older generations. Now, there are groups that still get hands on with their work, but it is becoming less popular. Due to this change, Phil and his company work very hard to conform to their needs. But, at the same time, he keeps the company and clients in mind in order to develop a positive, balanced, and inviting environment.
Once staffing is figured out, businesses can get back to contracts and getting in touch with clients to renew... and there is A LOT that goes into these contracts. There is too much to go over here and Phil goes much more in-depth in the podcast, but we will touch a little bit on one of the most important aspects of the contract...risk. Risk mainly comes from the weather in terms of snow totals and how much is covered by the contract. For example, if a location gets an average of 40" of snow, but last year there was a record of 75" that fell, there is a probability that the snowfall will either get near that record, or remain below the average in the next season. So, depending on how much risk you want to take on, and what makes sense for the company, you can get a contract that covers up to the record, in the middle, or just takes in account the average snowfall. Then from there, any storm that goes above the snowfall threshold may be added into the bill depending on how the contract is constructed. However, if the snowfall totals are below the threshold, that is the risk the client takes on. This is mainly because they paid for a certain amount of snow removal and if that amoutn of snow didn't fall, they will lose money. After the seasons with little to no snow, the question of "can we survive a downfall like this" arises and that is something that can derail a company. The best case scenario for both sides is that the contract for a certain amount of snow is met and the client does not need extra equipment or have too much.
How do you manage this risk when creating contracts? Well Phil explains thoroughly in the podcast, but in general it starts with snowfall history or climatology. These 5, 10, 15, or 30 year averages can put you on the right track for estimating the amount of work needed. You don't want to start a bidding process on what you "think" the area typically sees in a year. Not to mention, you can also see extremes, which further helps mitigate risk. Some products like Snowtistics® from WeatherWorks can also break seasons into event counts based on snowfall ranges, like coating - 1.0", 1.0 - 2.0", 3.0 - 6.0", etc. This can also help you plan materials and equipment needs for the winter season.
