SIOUX FALLS, S.D. (KELO) — The private snow removal business was expected to generate $19.8 billion in revenue in 2019.
That’s according to a study by the Snow and Ice Management Association (SIMA). SIMA completed the study in 2016 but Brian Birch, the chief operating officer for SIMA, said the research and data is relevant today.
The growth projects made in 2016 are good in 2020, “Our industry is growing at a decent rate and the economy is in decent shape,” Birch said.
Although snow and ice continue to fall each winter, that doesn’t mean the snow removal industry doesn’t have challenges.
“Insurance is a huge issue in our industry,” Birch said. “Both in the U.S. and Canada it’s becoming more difficult (to get insurance).”
Many private snow removal businesses have contracts to remove snow and ice at big box retailers, for example.
“People sue a lot when they slip and fall,” Birch said.
Those who fall who may not have a serious injury may believe the big box retail corporation has deep pockets, so they sue, Birch said.
But, larger retail corporations are pushing the liability to the contractor level, Birch said.
“You need to get insurance, you almost have to be insured,” Birch said of snow removal businesses. The policy needs to be specific to snow removal, he said.
The Accredited Snow Contractors Association also cited insurance as a concern for the industry. The ASCA website said “Often, contractors’ policies do not contain adequate coverage, and this can have catastrophic consequences – uncovered claims, damage to the contractor’s reputation, loss of clients, etc. Many times, large claims can result in increased premiums or loss of coverage all together.”
The ASCA said it advocates for changes in laws that are poorly written or unfair to snow removal contractors.
SIMA works with snow removal businesses across the U.S. and Canada.
There are an estimated 325,000 snow removal business workers in the U.S. In 2016, the average U.S. operator in business for over 10 years. SIMA said only 1 in 8 had three years of experience or less while 1 in 5 had been in operation 4-9 years.
Most of the snow removal businesses are dual businesses, Birch said. A dual business means they do something different in the non-winter season.
Although snow and ice fall most winters, it’s usually not enough work to keep those businesses going all year round.
“Most are in the landscaping business,” Birch said. Others may do pressuring washing or paving, he said.
“They will start with landscaping and go into the fall with snow removal in the winter,” Birch said. Businesses have dual functions to keep good help and year round work can mean benefits and full-time work for employees, he said.
Although it snows a lot in South Dakota, it’s not a state with the most snow plow business need.
The SIMA study states in the Northeast and Great Lakes regions need the most snow removal businesses. South Dakota and other Plains states fall into the lower end of revenue and need.
“In places like South Dakota and my home state of Wyoming, there are a lot of big open spaces,” Birch said. Open spaces mean less need to remove snow, he said.
Even in some more urban areas like Erie, Pennslyvania, “everybody has a plow,” Birch said.
Minnesota had the seventh most snowplowing business in the 2016 study. New York ranked first.
While SIMA said the number of corporations who contract for snow and ice removal from their parking lots is increasing, that can present more challenges than the insurance challenge.
Birch said one of SIMA’s focus areas is best practices. Best practice includes the proper and responsible use of de-icing equipment.
More than half of snow removal work is removing snow and about 29% is removing ice. The use of salt to eliminate ice can have a negative environmental impact, Birch said.
A 2017 study published on the website of the Proceedings of the National Academy of Sciences in the United States of America said road salt accumulates in soil and ground water and contributes to salt found in fresh water.
Various transportation departments in states such as Minnesota, Massachusetts discuss the harmful impacts of road salt use and other research including from the Transportation Research Board/National Cooperative Highway Research Program, the United State Geological Survey and Adirondack Watershed Institute discuss the negative environmental impacts of road salt use.
SIMA wants snow removal businesses to apply the best practice for using salt from the scientific standpoint.
“For a typical setting it’s 400 pounds of salt per acre,” Birch said.
But some corporations many not believe that’s enough salt, he said. And then, a contracted snow removal business may need to apply more salt, Birch said.
So, SIMA is working to educate snow removal businesses, corporations that hire snow removal businesses, legislators and the public on some best practices.
The snow removal business “is a difficult one,” Birch said. Often it requires long days, weekends and holidays.
One way to keep a steady flow of income during the winter is to have set contracts at a set price for the winter. That creates a steady flow of income during the winter, Birch said.
The downside is the contract covers a set amount for pay when the winter may require more work than what’s covered in the contract payment.
But, getting paid per snow removal visit is risky if there is only a small amount of snow or ice during a winter, Birch said.
Contractors may split the winter work with secured contracts for a set number of times for snow removal for some properties and operate on a paid per visit with other property, Birch said.