Budgeting for snow sales can be tough, especially because snow is highly unpredictable. You actually have no idea on how much profit you might make in a given snow season as it is all dependable on the weather.
When budgeting for snow, you need to take a look at your numbers for the past 3-5 snow seasons.
- Take your average snow revenue for the past 3-5 snow seasons
- Look at your average payroll hours for the past 3-5 snow seasons
- If certain employees spend a lot of time in the 'shop' in the winter, that time should go to overhead
- Trucks that work in the snow and summer should be split using the months calculator in LMN
- Equipment that works in snow only should be entirely in snow budget
- Includes, salt, sand, de-icer, or any other chargeable material
- Estimated cost of snow subcontractors (based on estimated sales)
- Should only include a portion of company's actual overhead
- 33%-50% is a common method but not that accurate
- Percentage of sales is another common method, not very accurate but may be necessary
- Best method is to go through overhead costs with a spreadsheet and allocate a fair portion to each division
- Snow net profits in the industry average 15%-25%
Use LMN's budgeting tool to enter in all of your sales, costs, and overhead - let the system show you what your profit will be based on your own numbers and make a profit on every estimate this snow season.