Most people who know me, understand that I am sold on using subs to grow your snow business.  In fact, when I speak to a crowd (large or small) I constantly refer to the fact that I know of only one successful (large) snow contractor who uses (predominantly) their own equipment.  This contractor, with a multi state presence bragged big time about how he spurned subcontracting in favor of investing in his owned equipment.

Now – it seems this contractor has folded.  There were rumblings a few months back after then lost a very large western USA contract.  When I spoke with the owner he told me a believable story about how this occurred, and it seemed plausible.  However, recently I came to understand the company had just plain closed their doors.  I have not yet confirmed this myself, and this is rumor.  But, they DID lose a senior management staff person who left the company several months ago.   In some spirited discussions with the owner a few years back, we had quite a debate about owning vs. subbing.  He was adamant owning was better.  Hmmmmm……………….

I wonder if the economy drove what happened.  I don’t know.  While I surely do not wish anyone bad tidings because I know running a large organization can be daunting – IF this rumor is true, I suspect the debt load weight was also a factor.

If they have closed up shop – I am truly sorry for the loss to the industry.

I’ve spoken with a few contractors whose business this past winter, went through the roof.  They were challenged, and in one instance – physically debilitated by the effort.   A company that grows quickly without any infrastructure in place can find itself suffocating under their own weight.  The owner gets overtaxed by trying to “do it all” by him/her self.  This is almost as bad as struggling with cash flow.  In fact, cash flow can suffer because the overtaxed owner just doesn’t have time to get to the billing.  Things fall behind.  Customers get invoiced early summer, and then balk about paying the bill because they didn’t know the invoice was coming.  The employees suffer because they can “feel” something isn’t quite right.

Your own bills don’t get paid because you have not delegated the responsibility for checking and validating incoming invoices – and then enough time goes by that your own credit (and credibility) sinks.  Not because you cannot pay the bills, but because you just don’t have time to do this important task.

Infrastructure is key to any growing company’s success (or failure).  Lack of proper infrastructure causes a breakdown in communication and systems.  The cracks in the “systems” begin to grow and too many things inevitably fall through these ever expanding cracks.

Stop.  Look around you.  Listen to your customers, vendors, employees, subcontractors.  If they are screaming about you not paying enough attention to their needs – it may be that you are taking on too much of the workload yourself. 

Good business people surround themselves with competent assistances, delegate responsibility, hold folks accountable for doing their jobs, and take down time for themselves.  You MUST take time for yourself if you are to succeed.  Working round the clock (and not keeping up) is a death rattle some will not see until it is too late.

Don’t let this happen to you (and your employees, your business and your family).

And yet another entity starts up with promises to help contractors save money, secure new business, increase margins and help them learn more about running a business.  Internet based and ambitious in their marketing to the (contractor) masses – I wonder if the industry needs another consolidator in its midst.  The challenges associated with such ventures are way too numerous to count and list out here.  However, it seems where there are dreams and ideas, there are those who want to chase the dream even if ill advised.

While I wish them well, I cannot endorse this kind of start-up simply because I know that no such venture has succeeded, as of yet.  The premise is weak (in my opinion) and relies on property managers reading about this venture on-line and wanting to include them in the overall bidding process for snow management contracts.  This is a hard road to hoe, and difficult, at best.

How many more internet, paper pass through entities will sprout up depends upon the success or failure of this new entity.  The odds are stacked against this becoming a successful venture – but I admire the founders tenacity. 

He’s definitely “chasing the dream”……

I was recently engaged in conversation with a snow contractor who was bragging up his margins to me.  I think he wanted me to tell him what a great job he was doing – and I was fully prepared to do so, when he told me how ALL his people are subs.  Even the landscape guys and the shoveling crews and even some of his plowers (using his equipment).  He told me he figured he put another $20,000 in his pocket by using this “trick”.

Oh my God……

I knew it wasn’t going to do any good to “explain” it to him, so I didn’t try.  He’ll learn.  Unfortunately, he won’t “learn” until someone audits him.  If the labor department does it, it won’t be pretty.  If the state does it, it will be downright ugly.  And, if some unfriendly competitor gains knowledge of it and turns him in to the IRS, it will be ugly AND painful.

Why do people still think circumventing the rules is a viable way to do business?  The downside is sooooo danged high and painful – it is just not worth the risk.  And, it DOES eventually catch up with them at some point.

Can’t see the logic.

Can’t understand the reasoning.

Three days ago Barcelona, Spain got 20+ inches of snow.  476 schools closed.  200,000 homes with out electricity.  Major ice build-up in many areas of Spain (and in Switzerland too).

I wonder if Al Gore pays attention to these global warming trends…..

Recently, the Erie Times News ran an article about Dave Hessong.  Dave worked up in British Columbia at Whistler Resort, overseeing the snow and ice management (among some other tasks) for this important ski venue for the 2010 Winter Olympics in Vancouver, BC, Canada.  Dave is one awesome fellow with regards to this type of activity. 

Dave Hessong was our General Manager at the 2002 Winter Olympics in Salt Lake City, Utah.  He oversaw all the snow removal on all the Venues for the Salt Lake Organizing Committee.  He was responsible for the successful completion of our assigned tasks.  Of course, he had a bunch of guys working for him in this activity – but he took total responsibility for the actions of these folks.  He did an outstanding job, and was specifically mentioned in the Letter of Recommendation we got from the Organizing Committee.  That recognition was well deserved.

And, so are the gracious words being said about his performance in Vancouver.  Whistler got snow (unlike the skating venues down in the city of Vancouver itself).

So – this is my personal congratulations to Dave on (another) Job Well Done.

You’re a decent sized snow contractor. You have a good book of business, and you’re growing steadily.  Things are going along well.

Are they?

How are you reacting to problems and issues that come up?  Do you yell and scream at subs and employees?  Are you belittling them and making huge issues of minor mistakes that occur?  Do you scream at them over the phone thinking that is “motivational” and they’ll do better because you are angry (and not hiding it at all?).

Think back over the winter and take (honest) stock of your attitude towards those who are out there making your all that dough your billing out.  Are your subs (and employees) looking at you and thinking “what an idiot”?

Your reputation with these folks should mean a lot to you.  You are the “leader” – and your attitude you put forth is important.  Customers and suppliers eventually figure out what kind of person you are.  They’ll likely continue to deal with you – but for how long?

You are defined by your actions in times of stress. 

I’m continuing to beat on this drum - How many snow contractors along the east coast are going to survive this past winter ??  I think it is an interesting, and valid question.  I’m very concerned about “collections” on the part of the contractors – from customers who will have a hard time paying, from subcontractors trying to collect from squeezed 1^st providers whose cash flow will undoubtedly be suffering from severe (and sometimes, terminal) negative cash flow.  The trickle down affect may also be severe as property managers and property owners try (and to some extent – succeed) in getting snow contractors to shoulder the burden of poor planning (on the part of the property managers).

For those who survive and collect outstanding monies – they may find their business will grow substantially next winter, as those forced out of business will leave huge service voids in the marketplace.

Gosh – I sure hope I’m wrong.  I’d love nothing better than to find I am so very far off base, and money is flowing readily into the contractors coffers – allowing for equipment upgrades, and new acquisitions. 

Unfortunately – I’m already hearing rumors and (unfounded and unconfirmed) stories of larger contractors having cash flow issues.

Pay attention to the customers and how they are paying you…..it could be the difference between going on vacation this summer, and worrying how you’re going to make it to next winter.