How to start a snow removal business

Residential driveways need many stops; commercial lots need bigger equipment and earlier hours. Pick one to start.

Snow removal usually needs a general business license, and some cities have rules about where plowed snow can go. A plow on a truck can change vehicle requirements in some states. Ask your city and your state's motor vehicle agency.

The SBA lists the launch steps in this order: pick a location, choose a structure, choose a name, register, get federal and state tax ID numbers, apply for licenses and permits, open a business bank account, and get insurance. For a snow removal business working out of a truck, the location is usually your home address and the area you will serve.

• Structure. A sole proprietorship is the simplest. An LLC keeps the business separate on paper. Ask an accountant which fits your state and your plans.
• Tax ID. The IRS gives out an employer identification number (EIN) online, and says you never have to pay a fee for one. Websites that charge for an EIN are not the IRS.
• Self-employment tax. The IRS lists the self-employment tax rate as 15.3%: 12.4% for Social Security and 2.9% for Medicare. Income tax comes on top, so set money aside from every job.
• Bank account. Open it before the first payment lands, so every dollar in and out is easy to find at tax time.

Your name goes on the truck, the invoices, the Google profile and the yard signs, so pick it once. The free snow removal name generator gives 36 ideas for your town and style, each with a domain idea, and lists the checks to run before you commit: your state's business name search, a federal trademark search and the domain itself.

The SBA describes general liability insurance as cover for financial loss from bodily injury, property damage, medical expenses and defending lawsuits. It says businesses with employees are required to carry workers' compensation, unemployment and disability insurance, and some states ask for more.

Slip and fall claims on lots you cleared are the risk to plan for. Ask your agent for general liability that covers snow removal (many policies exclude it), commercial auto with the plow, and workers' compensation for shovelers. Write your service terms: when you come (the trigger depth), what you clear, and what the property owner is responsible for between visits.

No total here on purpose. What you spend depends on what you already own, new or used, and how much work you plan to take on. Price your own list with a local supplier, then put the numbers in the startup cost table of the free business plan generator, which adds them up for you.

• A truck with a plow, or a walk-behind or tractor for driveways
• A salt spreader and salt or de-icer storage
• Snow shovels and push brooms for walks
• Lights, a backup alarm and stakes to mark edges
• A spare parts kit for the plow: hydraulic hoses, pins

The plow and the truck under it are most of the cost. Salt is a running cost to price into every application.

Choose a model: per push (each time you plow), per event (one price per storm up to a depth), or a seasonal contract (one price for the winter). Seasonal contracts give steady income; per push pays more in heavy winters. Price salt separately. Measure lots and driveways with the free satellite measuring tool, set your hourly cost with the labor rate calculator, and check the season against your costs with the break-even calculator.

• Your summer customers. If you mow, your lawn list is your snow list. Koira texts them in the fall.
• Small businesses and churches. They need lots open early.
• Property managers and HOAs. Seasonal contracts.
• The street. Neighbors watch who plows. Koira mails nearby homes.

Sign seasonal contracts before winter and bill them monthly on a card on file with Koira plans. For per push accounts, invoice after each storm.

Add trucks and shovelers once your route is full, and keep your account count to what you can clear in a storm.