6 steps to start your snow removal business
With the winter season about to begin, many people are starting to think about the snow that will soon be arriving. This is the time of year when people start hiring a snow removal company. Have you always dreamed of being your own boss? The snow removal business is growing and is a great opportunity for you. However, before you get your snow removal equipment and start looking for clients, make sure you are well prepared and find the financing that suits you. The following steps will guide you through the process of getting your project off the ground and help you learn more about financing snow removal equipment.
1- Write a business plan for a snow removal business
First of all, it is essential to write an effective and precise business plan. This will allow you to visualize your business in concrete terms. Describe the different services you want to provide, including the type of snow removal equipment, such as a snow blower or snow plow. Will you offer your services to the residential or commercial sector? Your industry will determine which equipment is best for you and what type of snow removal equipment financing you will need. Among our various options is leasing.
In addition, including a market study in your business plan allows you to determine the different opportunities for your business to succeed. Your business plan should also include the strategies you want to use, including marketing strategies. These will contain the key elements that will help you reach your target customers and build your reputation.
In short, the business plan is an indispensable tool that serves to present your project and determine your overall needs. It will allow you to target the snow removal equipment you need and your personnel requirements. Furthermore, your business plan will be very useful when you are looking for financing for your snow removal equipment.
2- Register or incorporate your snow removal business
Once you are ready to start your snow removal business, you will have to meet certain government requirements. Depending on where you operate, these may vary. In Canada, you can either register your business as a sole proprietorship, or incorporate it as a corporation or partnership. Every business or corporation must have a federal business number. In Quebec, you will also need a Quebec Entreprise Number (NEQ).
3- Find out about taxes for a snow removal business
The Government of Canada provides a checklist for small businesses. With this checklist, you will be able to get information and make sure you know all your tax obligations. For example, you will need to register for GST and QST collection. Also, if you have employees, don’t forget to open a payroll account.
4- Obtain the necessary permits and insurance
In order to avoid any complications and to ensure that you are compliant, check to see if you need any permits to carry out your snow removal activities. Do not hesitate to ask your municipality for information on the regulations in effect. In addition, you definitely need insurance. This will be useful in case of damage to property, but it will also be essential in case of injuries that occur in an area that you have cleared of snow.
5- Choosing your snow removal equipment
When it comes to selecting your snow removal equipment, don’t just think about saving money. Remember that a lower price does not necessarily mean savings. It’s important to buy quality equipment to be effective in the long run. This way, you will be able to save money and increase the profitability of your snow removal business. In this business, the faster you get the job done, the more customers you’ll be able to increase. So choose wisely! Be aware that efficient snow removal equipment, although expensive, will have a higher return on investment than less expensive but less efficient equipment.
6- Snow removal equipment financing
Now that you have fulfilled all your obligations and chosen your future snow removal equipment, you are ready to move on to financing. There are several options available for equipment financing. However, before making a choice, do your research and make sure you know the advantages of the different methods available to your business.
You can purchase your snow removal equipment with your own cash flow or with a commercial loan. This way, you can amortize the cost by recording it as an expense on your financial statement and benefit from interesting tax deductions for your business. However, if you wish to obtain a loan, you will need to have the necessary down payment.
Leasing is another very advantageous financing option for your snow removal equipment. In this way, you rent the equipment you want. This method of financing does not require a down payment. You can therefore keep your cash for your working capital. In addition, the monthly lease payments are tax-deductible as an operating expense.
If you plan to keep your snow removal equipment for short periods of time (so that you always have equipment that is in good working order), leasing is the best solution. With leasing, you can take advantage of new equipment each time you renew your contract without affecting your cash flow. Plus, if you decide to keep your equipment, some leases offer a forward purchase option.
To learn more about leasing, we invite you to visit our leasing page.
We strongly recommend that you apply for snow removal equipment financing before selecting your future work tool. This way, you will have greater negotiating power with suppliers.
Today, you can complete your snow removal equipment financing application 100% online: a quick and easy way to get started. For more information, contact Affiliated Financial Services.