This 25-Year-Old is Running a $5M Snow Business | Stefano Narducci

Hey everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 200 locations around the world. I'm also the founder of Homeworks, where we process over a million dollars of revenue every day for home service business owners. Today I am very honored to have Stefano Narducci with me. And most time we talk about more green industry related things, but a key part of the green industry is what do you do during the off season. Stefano has really been a pioneer on the snow removal side of things. And so I want to talk about his business today, what they're doing up in Ontario, Canada with over 40 tractors and scaling a $5 million operation up there and kind of the trials and tribulations to get there as well as what he's learned. And hopefully whether you do snow or not, you're able to learn something from the way they built the business up at Northern Snow. So with that intro, I think most people, I'm going to assume most will kind of know you, but give me a little bit of a brief summary of getting into the business and the past five years that has really grown a lot at the business.

Yeah. So simple summary. Started back when I was 19, pulled some tools out of my dad's shed, decided to go start doing some mulching, cutting grass, junk removal, pretty much anything I could do home service related. That was simple enough for me to get the basic understanding I would, you know, then go forward and, and do.

So right after high school.

Yeah, just right out of high school. So anything that was self explanatory, I was pretty much able and willing to do. I wrote out a huge list that I posted on Facebook and just said, hey, this is everything I'm offering for services, texted everybody, put out Facebook, made a logo called the Northern Landscaping and just decided to start doing some home service based stuff. Right. So anyways, that was, that was a success. Our first summer we did like $20,000 in top line revenue. Then winter came around, I was a little bit undecided. I didn't know what to do. Like what does the future look like for me next? All my friends are going to college. You know, I felt extremely, extremely alone over that summer too. I, I called my best friend, Nick Sherrod and I said, hey bro, like let's do this together. You know, I really want to do this with you. He had some great things to offer and our partnership looked really like we could do something really strong together. So when we got closer to the end of the summer season, his parents were kind of forcing on him, hey, you should go back to college with that. Which then kind of left me by myself. And I'm like, well, what does it look like next for me, you know? And we get a lot of Snow in Sioux St. Marie. The winters are long. Six months. It was around October time Nick was in college. I was there sitting by myself, and I'm like, well, I don't want this business to go nowhere. My parents are looking at me like, hey, are you going to kind of do something? And that's when I decided to start a snowmobile company. So I went, made a logo just on our computer using wix again, did a little bit of print by mail. So I printed everything off, went handed in Everybody's mailboxes. Got 30 customers that first year. Did everything with walk behind snowblowers that we got from our parents. And then I had a truck trailer. We went house to house at 30 driveways. Got like 15 or 20k. Yeah, no, no, a little bit more. It was actually about 30k in revenue that. That winter. And use some money that we had saved and made our first down payment on the tractor. And then we kind of just exponentially scaled from there, you know, it was 30 customers our first year to 175 the next year. 175 to 500. 500 to 2000-2000-3300-3340. 200. 4200 to 5000 now. So it was like year after year after year. Now we're kind of at a place where it's like, I'm really ready for the next chapter, you know, so I'm really ready to scale. And that's a big reason why I'm here.

So walk me through last year because I want to talk about. You grew super fast. And we talk a lot about growth creates chaos. Growth sucks cash. And so walk me through that moment. It's actually one of the reasons why I felt so drawn to you and even like you're actually one of the few people I have come out is because you were authentic enough to show that that was a rough time in your life. And I think for most people in business, especially when they start posting on social media, everything bad needs to be filtered out, and then only the good stuff is shown.

I want to show the bad stuff. Yeah.

And like snow, I know anyone that does snow, there's low moments because it's a tough, tough business.

Oh, man. It'll put you through anger. Yeah.

Yeah. So walk me through last year and what you learned from it. Most specifically for someone that might be also in this growth phase, Growing very quickly. I was talking with yesterday. Someone was here. His name was Marcus. He's out in Idaho. Growing very quickly. Young Guy did like 800,000 this year. Like 2.3 million. He's going for 4 million. Like, very quick growth for that person. Speak to that person. Tell us what happened last year and then what you learned from it.

Yeah, I would say that the biggest thing that has changed my entire company around, like, there's so much I learned from that difficult year. But if there was one thing that I wish I knew throughout that entire time, because I do think there is a place for growth and you could grow very quickly, but you got to make sure your pricing model strong. That's where we kind of lost. We were severely underpriced for the service that we were providing. We could have been priced higher. If we were priced higher, we wouldn't have been in a position where we almost went bankrupt. Now, there was some other unforeseen stuff that happened, Mike. You know, this was the. The most amount of snow Sioux St. Mary's ever seen in over 10 years. And of course, on my year six in business, I. I experienced that. Right. Which is fine, because everything that happened last winter, I would not take back for millions of dollars. I learned so much as a man, so much as an individual, and it was the best thing that ever happened to me and our company. However, if I could give any advice to anybody who's scaling very quickly is just make sure that pricing model is dialed in. I mean, you recently talked about it on a podcast not too long ago that you. I think it was, like, around December 12, but pricing has became one of the most important things to me, and it could really change a business around. So if your prices aren't right, your contract's not right with your customer. If you're under prepared, especially in the snow business, like I said, it's not like lawn care. You can go grab a couple pieces of equipment, catch up really quick. We have a small window. You don't have enough manpower, you don't have enough machines. You default, customers want a refund, you go bankrupt. That's just. That's how it goes. And that's what almost happened to me.

And so walk me through the pricing model you use. Is it a per push model? Is it a monthly model? Is it for only the winter? Or is it 12 months of the year? What's your pricing model? What do you see?

Working contract, six months, November 1st till April 31st we used to do five and a half months. Then I went to acquisition.com and they're like, that is the dumbest thing I've ever heard. And I was like, oh, my ego. Okay, we're doing six months now. So we do November 1st to April 31st. So six months, guaranteed coverage. Snow or no snow, all season long, 5cm or more, we come service your driveway. Two passes for premium customers, which essentially means pass in the middle of the night. We clean your driveway, then we come back around because usually there's continued snow, or if there's not continued snow, we'll come back to clean where your car was parked. Or if the city plows hit the streets again, standard customers only get one pass every 24 hours. Notification sent upon arrival. We do that with our software, of course. They move their vehicles, we do one thorough pass in the driveway. Done. So six month contract for us is the way to go. Why? And I think that you'll appreciate this, I want to give the customer the best experience possible. And if I'm leaving 5,000 customers up to them to have their responsibility of calling us when they want their driveway done, well, I mean, it's just not scalable. We never would be at 5,000 customers. We'd be at 250, pulling our hair out. So we could provide a more consistent service. We could double, triple down on value. We can make sure that we run the operations the best way we know and not based off of other customers decisions of when they want their snow done. Right.

Yeah. And what's the average cost usually per month for those six months?

Average cost would be, I don't know, just to pretty well be fair. And even 150 to 200.

Got it.

Yeah.

And what's that sales process look like? Is it they call in usually? Is it from the website?

We do a lot of sell by phone, tons. But website gets a lot of leads as well. Lots of leads. But you know, most of our closes is over the phone.

Got it.

Yeah, for sure. A lot of people are sold like they're, they're ready to go before they even call. They're just calling to say, hey, can I just sign up?

Right.

I think we've done a great job of doing that by just like word of mouth, you know, that's, that's the best thing you could do in business and build a good business based off service and the word of mouth compound so quickly. So we've been able to successfully get customers without even trying to sell them for the ones that are a little Bit more difficult. We go through the process of explaining how our standard and premium service works. All the value that we get over the six months, we, we give them an option of paying full or over six months and then away they go. But most of our leads, I would say it's probably a 50, 50 between our form on our website, which having a really nice website's important. We get a lot of leads through there. And then also phone call got it.

And your model is slightly different for some people comparatively. And that is you do the actual tractors with the snow blowers, whereas for a lot of residential or even commercial people will do plows. Yeah, plows. And so walk me through that logic and I think, correct me if I'm wrong, but did you do plows before or you've never done plows?

No, we just get so much Snow in Sioux St. Marie that using a plow residentially, like you're, you're not going to be able to do much, you know, like the banks just get so high so quick. When you pull that snow to that driveway, where are you pushing it? When the bank's four or five feet tall, you can't just magically push it up a four or five foot bank. Right?

Right.

So yeah, plow trucks for residential don't work. So we started with the residential snowblowers, like I, like I told you there. And then we came across this model on YouTube. YouTube helped me build my entire business. You helped me build my business watching your YouTube videos and like that's why I wanted to do the same for everybody else watching mine. But yeah, we came across the Montreal model, I call it in Quebec. They were using inverted snowblowers on the back of tractors to do residential homes in a very efficient manner. So they were, you know, some, some Companies were doing 200 homes in four hours. There was companies with 100 tractors doing, you know, 20,000 homes, 5,000 homes, 10,000 homes. Like it was pretty common to have a couple thousand homes as a business. If you're from Montreal or Quebec area, that's where this, you know, originated. And they were very hush over there, very quiet. They didn't want nobody to know about the business model. They kept it very low key, very, very competitive, you know, just a bunch of starving dogs eating out of one bowl. And somebody actually came across the model and brought it to YouTube, which was Nick Bonner. And, and I, and I found his videos. And as soon as we found his videos, we went tunnel vision on pretty much doing a copy and paste in our hometown of course, bringing our own value, bringing our own insight and changing things based on the way we seen the business at a scaling perspective. And we just smashed it, you know, we smashed it out of the park.

We build custom websites for home service business owners just like you and you get a 15 minute free consultation about your website. Because our team, on average when someone joins as a client, we increase the number of leads they get by almost double 80% within the first 12 months. In fact, if you go to our website, you can actually go through and see all the different websites that we build for a whole bunch of different home service businesses that have taken their business to the next level. Go check it out and book a free consultation call today. One thing I find really interesting with snow, specifically when it comes to home services is the va, like not the vast, but like a big chunk of your costs are fixed expenses being the fact that you have millions of dollars worth of tractors. Yeah, walk me through the financial model you use for that because I feel like this is the part where people see what your videos are like, I want to do that. And they go buy millions of dollars of equipment and realize, oh, I forgot to take all into account as well as the fact that for six months a year I don't get paid by those customers. So walk me through the financial model and then like how you do the financing. I know Kubota is a huge representative for you, but like walk me through how you make sense of that. What do you see as like, okay, I can do X amount with one tractor. I gotta go buy one or I'm gonna go finance it. And how do you make sense of, I'm going to go out on a limb and probably guess three plus million dollars worth of equipment?

Yeah, yeah, we, we got roughly. If you don't include all the depreciation, if we're looking at new value, we're, we're close to 5 million. Yeah, we got about $5 million in equipment. I mean what it's worth right now, I don't know, say four, between three and four. But we're regardless besides the point, the financial model, wow, is that ever difficult for this business? Why there's so much unpredictability if it snows 25 times in a year versus 40 times in a year. Your bottom line profit and the way your finances are going to end up by the end of the season are going to be drastically different. Obviously there's safeguards you put in place with, you know, having a snow charge centimeter on your contract or for all The Americans. Inches, right? So when you go over a certain amount of inches, you could charge your customer additionally. That's kind of a safeguard just in case if you do have a heavy win. But if you end up just in the sweet spot where maybe it snows just enough, but it hasn't hit your trigger, you know, your, your 400 centimeter threshold, that's, that's for us. In our contract, once we go over 400, the customer gets charged additionally. It's called the surcharge. You know, with the, with the financial model in this business, what I've found is that if you have a heavy snow year and you're just underneath that trigger or you have a lighter snow year, it'll significantly change the profits of the business. Everything is fixed for the company. We put budgets in place based on historical data, which we're trying to get better at. Number one thing I could tell anybody in this business is just get your data right from the beginning. Make sure you're really tracking your financials because you'll be able to make way, way better informed decisions. I've kind of always came from a place, unfortunately to say I've just shot from the hip, basically scabbed the financials together with me and my partner Nick, and said, okay, this is what we could, we think we could do. And we just went for it. Now we're actually trying to make decisions off of data. Like I said, everything is fixed in the business. The only variable costs are your repairs and maintenance, your diesel, your fuel for all the vehicles and trucks and tractors. What else? Repairs, maintenance, damages. Damages are a huge one. Know last year we did a quarter million in damages. It's just easy to add up, right? You, you're servicing 5,000 homes in a night. You times that by two, that's 10,000 odds of you hitting something times that over 50, 40 snow events. Like you're hundreds and hundreds of thousands of odds of being able to hit something. So you do 20 garage doors, 25 garage doors, a couple cars, boom, there's a quarter mil. It's really simple, right? So we make sure that we put a budget aside for damages. And that's something I would recommend to anybody that wants to get in this model. If you're running the tractor with the blower and you're doing volume, definitely put a budget aside. A number that's worked for US is about 3% of our top line. We like to put aside for damages specifically. But yeah, man, everything is fixed. It's just repairs and maintenance, damages, fuel. Yes, there's some guys that are hourly but even the way I pay my guys, it's all, all, all contract based. Just like the contracts for the customers.

It that kind of me. My second question is like the, the rise and fall of the snow season. So during the six months where you're not, they're not on contract, are you still paying for those fixed expenses of the tractors or do they give you some sort of like a six month only expense through Kubota?

Yeah, no, we pay the same price 12 months all year round.

So I'm assuming like it's a huge amount of capital savings required and like budgeting and forecasting maturities actually have enough when in the middle of August that thing sitting there most of the time needs to get paid for.

Man, I have just made it through for the last six years, like just made it through every winter. Now that's not because you know we've sucked as a business. We were just making informed decisions. And that's why I'm saying for anybody watching now is looking to get in the model. Make sure your finances are set up from day one. Go into your first snow season, make sure it's a successful season. Of course, put your contract in place to safeguard things, put some small budgets aside that you know that you're capable of working around and, and then after your first season you will have data to make more informed decisions for your next season. For us, we never had any of that. We just scaled, scaled, scaled. So the reason why we just kind of just got by every single year spring would come around and we would just have enough money to get to renewal season was for. The reason being is just because, you know, we were able to, we were just able to kind of make things happen quick enough to get money in the door to kind of save us. But essentially all of our money just went to growth. And that was burning us out. You know, it was really burning us out. Now I'm focusing on how can we grow and still make profit. And that's what this year's been all about. Just because when you go into countless years of growing your business and spring comes around every single year, you're like, wow, there's no profit. All the money just went to growth. That's cool. We have more assets, bigger shop, more employees, bigger brand, we got a bigger business, but there's no profit. So sacrificing profit for scale as something I've been doing since we started and this year I wanted to prove to myself that we could scale and we can make profit so I'll be able to tell you a little bit better in the spring because like I said again, based on the weather, we get a lot of snow this season, it's going to kind of impact the profit a bit more. If it's a little bit lighter, then we might be a little bit more profitable.

Got it. And, and one thing like I find really interesting about snow is you have to also scale up a huge amount for your operators.

Yep.

And I would imagine you get some people returning back. But because the massive quote offseason being your summer and spring, I would assume there's a lot of recruiting required to attract 40, 50 people. And I correct me if I'm wrong, that was your Achilles heel last year. For 21 days straight, you guys were going around the clock. People were walking off the job regardless of how much money you give them.

Yep.

Because the body can only take so much.

Exactly.

What have you changed this year with the recruiting, the hiring, the training process to make sure that doesn't happen again.

Okay, this is exciting. So yeah, that was, that was our biggest downfall last year was if I had to just say one thing and just pin it just to the, to the one problem we faced last year that was the most difficult. It was human resources. That, that's what killed us. It almost actually made us go bankrupt. So basically some of the safeguards we put in place this year is we hired more operations people to make sure that the guys were communicated with. We had a front facing human resource gentleman come on board, Geo from Amazon. He's been doing absolutely incredible. Mitch is operations manager, so he kind of oversees the entire operations. We brought another guy in, my cousin, Joseph Solerno. We brought him in to take care of kind of the back end operations, routing, things like that and making sure that schedules, everything's in place, all that sort of good stuff. So, so we went from only having one operations guy last year to having three. And then as an extra layer on top of that, we brought in a general manager. So we're literally talking three more salaries here. As a conjunction, it's a lot of extra money for the company. We did a large price increase because we wanted to build a more stable business from almost bleeding out last year. So with the price increase, of course once you get more money in, you want to figure out ways to give better experience to your customers. So right away you're spending on salaries, you're spending on infrastructure, more equipment, all those great things. So the biggest focus for us was we needed more qualified people internally to really help Our people out in the field to make sure that they were nourished, communicated with culture was one of the biggest things we wanted to focus on and just making sure that our guys had a voice that they could speak to. It's crazy to say, but I feel like a lot of men that work in the blue collar space, you know, they keep a lot in and, and they definitely got some things to say and if there's nobody there to communicate with them, they'll kind of just like self destruct or they'll just explode and walk out. You've seen it countless times. I'm sure the fuses on some of them are really short. So, yeah, really doubling down on operations has helped us significantly. Some other huge things that we put in place was two way cameras and all of the tractors. We launched our software company, Aurora, which has been an absolute game changer. Our guys absolutely adore it. Um, our internal support team adores it. We doubled down our internal support team. We went from having like pretty much two agents to five. Um, what else did we do?

Basically two way cameras, like they, where they can basically turn it on, talk to the dispatcher from inside their cab?

No, we act. Their tablets inside have Aurora and Zello. And Zello is how they communicate back to dispatch and, or sometimes they use their cell phone, but Zello is pretty much our procedure of how they communicate back to dispatch. Um, but yeah, the two way cameras was more for a safeguard and to track damages. So let me tell you, like the problems we faced last winter, and I'll kind of walk them back. Damages were disgusting. Human resources, not enough management equipment was quite prepared. It was, it was decently prepared enough. It was prepared based up to the level that we knew, but it wasn't prepared for the biggest snow season that Sioux Samurai's ever seen in over a decade. So yes, we lacked a little bit there. But Eric Boulon, our shop manager, did such a great job of just staying for endless times for 24, 48 hours straight, making sure that those machines are ready for the next day, the next day, the next day and the next day. So that was somewhere we fell a little bit short. Customer communication fell short, service times fell short. So those were all the main things. And I kind of just looked at all the problems we had. I had keyman risk too, which was horrible. Our operations had key man risk as well. And I'm like, we have major issues in our business, like really, really big issues. Let me start with the biggest problems and walk them back. So first I wanted to do everything internally. Spring came around, everything was done. Winter was over, and I'm like, I got to prepare for next winter now. I actually started doing it like midwinter. But regardless, I started with wanting to build the company from the top down. I was like, we need to bring in a general because I'm an integrator, a visionary, a content machine, an operator by night, I'm like doing for this business. And I wasn't burning out, but I knew that it just wasn't efficient enough. And like, I was choking. I was choking the company, right? So that's when I brought in our general manager, Anthony Caritti, brought him in as a partner as well. And he's been absolutely exceptional. He's taken a lot off my plate to be a great integrator for our company. Make sure you go. He. He makes sure that he goes to and finds where the bodies are buried for the business. You know, anything that I have planned, I push the agenda on him. We work on it together, and he makes sure that it actually happens. The implementation happens out there.

So that.

That was a huge, huge one. Was starting from the top. Okay, let's. Let's start from the top and then build it down. Then right after him, I was like, okay, we got to get a better sales and support team. We brought in some more people there. And then right beside that was operations. We need some more people on operations end. We doubled down on that shop. Only has one guy. Let's get another really, really trained, licensed mechanic inside the shop. We did that as well. So kind of like a pyramid. I started from the top and then worked my way down. Then I went to all the functions. I'm like, okay, two way cameras. We got our software. Okay, look at all these problems. We would watch some of the videos and I had everything documented from last winter, and I was, okay, here are some of the operational problems we faced. How do we get better in these areas? How do we increase efficiency but still be able to service our customers? And that's when I came out with two different models, Standard and service. Standard service and premium service. That was huge for us. It gave us more efficiency on the operations end, gave us faster road times and still service our customers and gave them options, which was really, really well for us because we used to just be one service. Snow blowing, premium, two passes. When I introduced standard, it really changed things big time. It gave guys a little bit of an easier night shift too, which is the hardest because everybody's tired. And when you go for many of those Night shifts, they kill you over time. So I was able to squeeze down our routes basically to like three and a half, four hours to make one full pass on all of our premium driveways. And, and then when we come up for second pass, we do premiums for a second time. And standards for their first. That was, that was a huge operational move that bought us back a lot of time, made the experience a little bit better for the operators and basically kept them there under 12 hours. Because I found last year that we went multiple shifts of like 14s to 18s in a cab. You know, you're killing these guys. And we, we have 50 of these guys doing that. It's not possible, it's not feasible, it's not scalable. So bringing the standard and premium model condensed our road times and made us more efficient and we raised our prices too. So it was kind of like if you didn't want premium at the significant price increase, standard was still an option, but you're just getting the one pass. It worked really well for us. Two way cameras was to protect the operators, check up on them, make sure that they're out there actually doing, you know, production in the field, making sure they're not, you know, smoking and operating or texting and operating at the same time or things like that, making sure that they're not going around corners too quick. It's all based off AI technology. We use Samcera, if you've ever heard of it, and it's absolutely incredible. So that, that was a huge investment. That was an absolute game changer. Like I said, the software was another big one. And then we worked really hard all spring and summer on just adding little 1% improvements to make sure that all of our equipment was prepared for the worst winter ever. And going into this winter now, to kind of keep you up to speed, all of these changes we've made, and I know I miss, I'm missing some right now. I'm just kind of giving you a high level. We're out there slapping it. We're just slapping it around now. Like watching where our company was last December, almost going bankrupt and everybody looking like just the world was crumbling around them and being blasted all over our local news and being blasted all over Facebook and I was still able to film all of it. Somehow, some way, God was with me. And I did get it all on camera. But that was one of the worst and scariest experiences I've ever faced in my entire life. And we made it through and, and seeing where we are today right now, we've done 12 snow events so far, and we're. We're out there like Daytona 500. We're just like, you know, we're like, we're just slapping it. We're just doing such a good job. I can't even describe it to you. It almost feels fake or too good to be true. Everything that happened last year was meant to be. You know, God wanted me to go through all those adversities. I went through the. The toughest six months of my entire life. And I was happy that I was able to stay resilient and push through it, because now the company is in such a great spot. And that's another reason why I'm here now. I feel like I'm ready to take things to the next level. So, you know, Mike could help me do that.

Yeah, the. The one thing I want to talk about for. I think a lot of people that might be going through a year like you did last year, whether it be snow season or spring rush or whenever it is busy for them, and they realize, like, hey, I'm either I'm going to nothing or I'm going to quit, because this is crazy. When you were in that moment and you realized that price was the lever you had to pull and it wasn't going to be a 5%.

No, we went 30 adjustment.

Right?

30.

In doing that, you've still grown by more than 20% in terms of number of customers this year.

Yes, sir.

And so walk me through your thought process of like, was this like, okay, before I bounce on this business, I'm raising prices because I have to, because all these other adjustments you've talked about, software, equipment, video cameras, managers, mechanics, all that costs money.

Grew the media team, too.

Right. And like, all these things cost money. And so one of the things that I think I always try to, like, granulate and make really simple is like, like, make more money. And if you fix that lever, all these other things that you talked about get solved. You have the resources at least to solve them. Hire a great general manager, hire a great operations person, a dispatcher, multiple more people on the phones. Like, these all cost hundreds of thousands of dollars. And. And so when you raise prices. Walk me through your psychology as well as how did you do it? And what was the response from customers?

Yeah, yeah, absolutely. And this is funny because I'm referring to your podcast about raising prices right now that you just recently did. It was exceptional, by the way. I think everybody should go and listen to that. I don't know what the title was. You just did it like two weeks ago. It was good though. You did a really good job on it. But I just, I resonated with it because it's exactly what we did. Long story short, there was something I wanted to add to that because it was important. In short and in simple, obviously, when you're going for a price increase, you're expecting to definitely lose customers. And I knew that we would lose some of our customers. And the scary thing for me was I got all this debt right. And I need to get a certain amount of customers to cover the debt. And all these new infrastructure changes I'm making and I had a list, I had like such a big list of different changes I wanted to make and, and I really just pinpointed the ones that were highest leverage and went for those first. Fortunately, we were able to get enough business and that I was able to do pretty well all them.

And some and challenging part I would assume too is like, you almost have to get the changes done before you do sales.

Yes.

A lot of them are coming in when like, you got to be out there tomorrow because they called in yesterday.

Yeah.

You've got to almost kind of project, okay, how am I going to lose? How am I going to gain by the time I hit snow season?

Yeah.

And so when you did the price increase. Yeah, keep going.

Sorry. Yeah, no, it was. I realized all these changes that needed to be made because after we went for 22 days straight, I went like monk mode for a week. And I just really looked back on everything that happened and I'm like, holy, I'm screwed. Like, I'm screwed. We got so much work to do. I can't believe that this winter just slapped us around that bad. And like, we still got three and a half months to go. And like, we have burnt basically all of our money already and we still have three and a half months ago. So I'm like, I know already we're going to be in the red. Like, I just already know. We ended up losing $700,000 by the end of that snow year. Just, just so, you know, sold some real estate, ended up, you know, working things out. We wouldn't have lost 700,000 if we didn't scale so, so much. But we went from like 30 machines to like 50, so that came with that too. But anyways, to get back on track here, sorry, the question again, you. Were you.

That price increase, that, that aspect of raising prices, what was the response? Did you lose 5%, 2% of your customers? What was that like? Because I know it's scary when, you know, like, if I don't get 4,000 customers, I'm. I' from day one.

Yeah. And I was nervous about that. I just believe that. I just believe that truthfully, with the way we went about it by doing an early renewal process and giving our customers a bit of a heads up because you shouldn't increase your prices without telling your customers. We sent out our email. We let the customers know the prices would be going up. But as a, as a kind gesture and a form of goodwill, as you've spoken about before as well, we let them know that, hey, if you want to sign up early, which was in April, just when the snow season ended, if you want to sign up for next winter, our prices are going up, up. Customers understood. They seen how much snow was outside, they knew the prices were going up. They already knew that we were too cheap to begin with. So when the price increase came, nobody even batted an eye. Not one bad Google review, not one. Like nobody, Nobody cared. Everybody was expecting it. And we gave them the opportunity to save some money. Even though there was a price increase of, you know, making sure that they sign up early in April. And this was kind of how we got some more oxygen back in the business, AKA cash. We were, you know, April was there. We are like a couple hundred grand left in the account. And we knew that if there wasn't a strategy in place, we were going to run out of money. So after just quickly kind of panting as a team and getting together, I knew that the only lever that we could pull on to be able to get money in the door for our company and save it just because our real estate deal didn't go through in time was let's start renewals early. So I started renewals early. The price increase for renewals was at about a 30% rate. We gave a 10% pay in full discount out, and those customers were able to save some money. We ended up signing up 500 customers within that month, brought in hundreds of thousands of dollars of revenue, saved the company pretty much from going bankrupt. And then we ended up continuing on throughout the summer, running more promotions and campaigns. Basically, 10% was the deal all year long, but we just packaged it differently, put different wrapping paper around the offer and promotion and yeah, man, we ended up pretty much saving the company. So Churn, let's talk about customer Churn. Customer Churn. I mean, we went from 4,200 to 5,000. Right now, I can't tell you the exact data of who we lost because we also Did a software change, got it right. Like we changed from an old software to our own new software. And when we did that, we lost all of our historical data. The company didn't give it to us because, you know, we created our own software. They said, screw you, we're not giving it to you. Locked us out of our account, took everything and.

Yeah, okay, so then kind of to summarize this and go back on if someone's listening to this and like, hey, like I've been doing plowing, I'm thinking about this whole snowblower thing. I've seen your videos, I'm inspired by that. It looks like it's better operationally, but there's a big jump from a financing perspective. Getting the tractor, getting the blower. For someone just getting started, more of a solo operator. Whether just getting started a business or they're thinking about getting into this side of things, break down for me the math on a solo operation. So one tractor, a blower, can they do 100 customers? I guess that probably depends a lot on the frequency of the snow, what type of snow, their density, their out density. But like just walk me through the model of like a one tractor situation, what they're going to be spending every month, what's the value of that equipment, etc.

Yeah, so value you're looking at about $100,000 for the asset. Canadian. If you want a full snow tractor with a blower, you're gonna also. Well, for your first year you could do pen and paper. You know, you could use even Google Maps as a routing system. You don't need software with one tractor if it's just yourself and you're getting started out there. As long as your pricing model is correct, you're a hundred thousand dollars for your asset. You're probably going to be about a hundred bucks an event per fuel. If there's, you know, 30 events, you might be around that three grand mark for fuel. If you're in a lighter snow market, maybe only 15 events should be about 1500 bucks. Whatever. If you choose the right piece of equipment. It's why I choose Kubota. You'll have full warranty, so anything breaks or anything goes wrong with the equipment, it's 100% covered. You should also get their insurance as well. You get their insurance, you break a window, it's covered. So you don't have to worry about basically anything to do with repairs and maintenance besides filters and consumables. So that's all covered. So you don't have to worry about any of those costs, you just got to worry about making sure you can make your tractor payment. So that's pretty much all the cost there. You have some shear pins, you got filters, you got, you know, some fuel, you got grease, you got some lubricants you might use, just simple consumables that won't cost that much. So you're good there. That's, that's easy. Now, making sure you actually make money with one tractor is probably the more difficult part. Because a lot of these guys, and especially a market like ours, you're like, okay, I'm just gonna go grab one, two or three tractors and it's easy. I'm just gonna rip off northern snow and I'll just charge a cheaper price. It'll catch up to you. It will catch up to you. Because if you're charging a significantly cheaper price, of course you're not going to be able to out service us. You're not going to be able to be on the same service field as we're playing. And ultimately either you'll just remain as a small company. Right. Or, and, or you, you might end up just having to close down because there's not enough money. I watched several companies in our hometown copy and paste what we do, and then one year or two years later, boom, done, startup close. Well, why? They're charging significantly less. We were already priced too low. We almost went bankrupt over it. So imagine them if they're 100, $200 cheaper per contract, we're charging 700, they're charging 500, 400. There's no money in that. But back, back to where we were, if there's somebody out there watching right now and they want to start with one machine, there is a place to start with one machine. I've done it. I would focus on making sure that you really look thoroughly at your pricing model and pretty much put a contract goal in place. Try to stay as tight as possible. Even if you got to go to neighborhoods and knock on every single door in that neighborhood, try to stay as tight as possible because that's how you're going to optimize for efficiency.

I think it's one thing I saw too, even in your business this year is like, you guys are doing the whole street. Yeah, like one in this neighborhood. It's like you have five tractors and they're just doing every single driveway.

Yeah, we, we were in every nook and cranny of our entire city. And when I first started, I was spread out a little bit more. And I'll tell You that the profit is in the road density, but there's also profit in charging significantly high prices, even if you have to be across the town. There's money in that as well. But if you're trying to kind of get in the market, get enough customers without, you know, dying on the phone trying to do sales, I would figure out a good price point where, you know, you could make your asset payments, make some money for yourself, and then make sure that you could cover your consumables, put a small bit of money away for damages, make sure you have a strong contract in place just in case it's an unforeseen snow year that might, you know, go over what your contract value is worth. You might need to get some additional revenue from your customers to be able to actually still come out profitable and. Or not break even. Yeah, it's. It's quite simple, to be honest. Yeah. I would probably look at a figure of being like, okay, well, my tractor payments, let's just say for simple numbers, are $12,000 a year. My tractor payments are $12,000 a year.

I want to make that with the insurance. Or is that an addition usually?

No, they're roughly around 1500 per. Per unit. But I'm just giving round numbers. Say they're $12,000 a year. You need to pay yourself. If you're looking to just make money in that in six months and not work summer, maybe you're trying to make a salary of 50,000. Add down that, add that on top of the 12, you're looking at, you know, 62,000. Add on some consumables, a little bit of money away for damages, some other unforeseen stuff, a little bit insurance, you. You get to 100 grand real quick. So if you're charging a thousand dollars per driveway, you would need to do 100 driveways. And I'll tell you, you're not doing 100 driveways with one tractor. You're just not. Because there's just too much risk, like keyman risk. You have operational risk that one tractor breaks down. You will never have the same efficiency with a plow truck and, or a truck and trailer with blowers, and you'll.

Lose all your customers if one big snow event comes.

I. Anytime I've ever done any coaching with anybody out there who's looked to get in the same model, I always tell them, don't even bother with one machine. It's two or nothing. Yeah, just because, like, if one breaks down, you need at least one other tractor to be able to get through because there is nothing as efficient as a snow tractor to do residential snow removal. So if you got to borrow even a plow truck, you're not going to be able to be as quick. And if you got to go there with a truck trailer and blowers, you're done. You're done. Because it's just not even close to the same amount of efficiency. So I always Recommend Starting with 2. That's what I tell everybody. One is very vulnerable. It's possible. It's possible. I have some guys in our hometown who've done it. You know, there's certain snow events where their tractor break breaks down and they don't come out for three days. You just don't want to be that guy.

Yeah.

You know, like, if it works for you, cool. But if anybody's interested in taking business seriously, I would. I would not go that route.

Well, to wrap things up, I wanted to ask a question. And that is when it comes to snow, one thing that I admire about anyone that does snow is there has to. There's a mental fortitude that is required.

Yes.

To get through stretches of days and weeks without no sleep, be at doing high risk activity. It's extremely seasonal, like up and then it's zero or it's nothing. It's like we're all at 110%, running full steam 24 hours a day around the clock or there's nothing happening and there's no snow happening. What have you learned psychologically or just personally to deal with that kind of jump in stress levels? Because I think that's the thing that burns out so many people from snow and even I was talking with owners this morning in Augusta and I put in the chat like, hey, any questions about snow you guys want to know? And one of the first things I want is like, why in the world will you take on the stress of taking on snow? Like that just seems so difficult. What have you learned and how has it molded you? I almost look at snow and these type of services as almost the work is doing work on you.

It's emergency services.

Yeah.

That's kind of how I look. We're like firefighters and, you know, ambulance drivers. Yeah, that's how I look at it. It's like the house is burning down and you are the guy responsible to go put the fire out. And you only have a certain time window now. We're obviously on less of a time constraint. But we're on a time constraint. We are, Period. Like I said, the analogy is simple. I almost watch happen in my Own business. If you don't get to those customers quick enough and they want refunds, that's it, it's over. You're not making your debt payments, you're going bankrupt. If it doesn't happen within a month, it's going to happen in a couple months.

So. So those are the refunds that they paid like for the year.

Yeah, so, exactly. So, so what would. That's what happened to us almost the last winter. And we just, we made it work, but it's like we went for 22 days straight and near the middle of it, I was watching manpower just slowly dwiddle away and we are losing more and more and more and more people. And how do you have time to do training and hire more operators when you're going for 22 days and you have lack of management? We didn't have enough manpower internally too. We ended up saving the company. I did like a bunch of training classes with me, my partner Nick and our operations manager at 1 in the morning after doing snow for 14, 16 hours, calling guys in that we had through our form, running them in, showing them one or two things on the tractor, giving them a key and tablet. Okay, be here in an hour. Going out. We did that for like two training classes where we able. We were able to scab like 15 operators. Man. Last year was. When I. When I say this, it was like a. It was like a dream. Like, it was like truly like a dream. And staying resilient. Okay. Going back to having the mental fortitude, just staying absolutely resilient in this business model has helped me get to where I am today. I've asked myself countless times, I'm like, why? Why, out of all businesses, why, how did I end up here? Because it's. It is very difficult. It's very taxing on time. It's unhealthy for, for you as an individual. It really is. The schedule's all over the place. But there's something that I absolutely love about it. No other business gives me the same rush. When I compare lawn care in the summer to doing snow, it's like, you know, I just like. It's. It's just. It doesn't do it for me, you know, it doesn't. And I love the reoccurring service. I love lawn care. It's a very simple business. I feel like I'm. I'm on vacation when it's the summertime because it just runs so smooth.

Yeah.

You up the grass. We got tomorrow. Yeah, you missed a spot.

We got tomorrow.

Yeah, yeah. It's just, it's so simple. Like, oh, you sculpt a little lawn. Cool. It's. It's just so much easier. And I really appreciate the. The lawn side, the winter. What I could give to anybody who's interested in, in taking on the winter. I mean, man, there's, There is a massive demand in the market. Robotics is not coming for the business anytime soon. I mean, snow plowing is here for the next several decades. I truly believe eventually it'll be automated, but it's here. There's big opportunity, residential especially. Our baby boomer population and market is massive. And there's a lot of baby boomers that are getting older that can't do their driveway anymore and need their driveway done. Global warming's not stopping nothing. I still see it snowing everywhere. And I just think that if you're going to get into the business and you want to successfully scale it, just be prepared, you know, be prepared for a lot of uncertainty. Uncertainty. And I mean, this happens in any business, period. But you can't predict the weather, okay? You can't predict the weather. All you could do is prepare for the weather. And that's what I learned from having a very rough winter last year, is I'm going to do everything in my power to prepare for the worst. And that is, I think your number one asset in this business is mentally preparing, but actually preparing your operations, your staff, your people. Prepare them for as if you're going to go for a month straight. Because a lot of people get in this business and then, you know, the snow season might just eat them up. I've watched it happen in my hometown. Just boom. Company comes out of nowhere. They want to start up, they're doing a decent job. One or two snow events, then we get the first storm that lasts a week long, they're done. So it's, it's mental preparation and operational preparation, internal preparation for your team. Like, you got to get your whole team on this mental mindset that we are going to war. We are going to war. Are you guys on board? Are you guys ready? Because it's not just like, we're gonna clock in eight to four here. No, no. We're going until the snow's done and everybody's working different shift work and problems are happening all over the place. Snow's coming down. It's like. It is like the definition of ultimate chaos. And I think that's why I kind of find my stride in it. And I absolutely love it. What's really worked for me personally and Making me have a better mental fortitude, like you asked, was making sure that we built an exceptional culture, because it's made not only me more mentally stronger by making sure my guys are happy, but if I'm happy, I'm showing up with a smile on my face. And all the leaders are. By building this toxic culture, you could also see in the individuals that they're bright, happy, and excited to be there. And when you see that, it makes the stress of the business a lot easier, because it's all about manpower. You could have 100 tractors in a market like mine, only doing 5,000 homes, which would be overkill. You'd be able to go service your customers in a couple hours. If you don't have the right people and you don't have enough people, you're done. Doesn't matter how much assets you have, you're done. So, yeah, that's. That's been a really big one, is making sure that you're mentally prepared, you're operationally prepared, and spreading that across your entire team, having that strong culture that, hey, we're in this together, guys, and we're going to go to war together. And we do a lot of hoorahs before we go out. We recognize operators who do a really good job. We do a lot of incentives, right, Lots of incentives. And we just really make sure that we feel like a major team, like a real professional hockey team out there, a professional NFL team. You know, we make sure that we're all in it together and everybody's getting recognized, rewarded, and we're moving together as one wrecking force. Awesome. Yeah.

The tractor boys.

Tractor boys.

Ladies and gentlemen, Stefano Nordici.

Thanks, bro. Thanks, bro. Appreciate it. Thanks. Absolutely. Thank you, dude.