Posted on Inc.com by Zoë Henry
The first major snowstorm to pummel the Northeast this winter means an uptick in sales for manufacturers of blowers, plows, salt spreaders, and more.
Dan Ariens, the CEO of a Brillion, Wisconsin-based equipment manufacturer, has been preparing for a superstorm since last February. That’s when his company ordered its annual shipment of blowers and plows for the 2018 winter season, which Ariens predicted would bring 20 percent more snow than the year before.
Ariens had reason to be confident. His family has been in the business of weather since 1933, when his great-grandfather, Henry Ariens, began building rotary tillers. “We don’t know when a specific snow event is going to happen,” Ariens says. “But we know that from Baltimore north there will be something that happens one or two times a year.”
His foresight paid off: His company, Ariens, is among the dozens of manufacturers that are now benefiting from the so-called “bomb cyclone” that began pummeling the Eastern seaboard this week. The blizzard, which started Tuesday in the Gulf of Mexico, brought 50 and 60 mph gusts of wind while dumping inches of snow, sleet, and ice on coastal states. As of Thursday, the storm has led to thousands of flight cancellations and the shuttering of schools, tracking from Tallahassee, Florida, through the Carolinas and New York, and all the way up to Maine.
Meteorologists say the blizzard, which some refer to as “bombogenesis,” is so named for the sudden drop in atmospheric pressure. Even after the snow and sleet have passed, East Coast cities should expect to see blisteringly cold temperatures in the days to come.
Generally speaking, manufacturers and landscapers will attempt to make up for any lost business during the winter months–and especially as global temperatures continue to rise–through selling summer equipment. Ariens explains that the sale of lawnmowers, in particular, helped his business to recoup money in 2017.
Companies that focus solely on snow, however, have had to be more creative. Jason Case, the co-founder and CEO of Case Snow Management in North Attleborough, Massachusetts, generates revenue on both fixed seasonal and per-inch contracts. The nine-year-old firm provides snow and ice removal services for both residential and commercial clients in more than a dozen states. “We do a 60-40 split,” Case explains, referring to the types of contracts the company draws up. That means that even during mild winters, the company can still plan on a fixed amount of revenue, from commercial clients such as fast food restaurants, pharmacies, and gas stations that need to ensure that their walkways get cleared for business.
Case has made his peace with a fluctuating balance sheet nonetheless. In 2015, the business brought in $28 million, before falling to just $15 million during the mild 2017. Thanks in no small part to bombogenesis, Case Snow Management is anticipating more than $20 million in revenue for the 2018 season.
Still others are hoping to marry cutting-edge technology with service providers to stamp out some of the inefficiencies associated with winter storms. James Albis, a Connecticut native, came up with the idea for an app-based marketplace for snow plowing, à la Uber, after decades spent shelling out for mom-and-pop services. “There was no rhyme or reason as to how I got serviced,” Albis explains. “All I knew was that at some point the snow would be cleared from my home.” Enter: SnoHub, an app that connects homeowners to contract shovelers on demand. The company charges a baseline fee of about $60 per six inches of snow, and then takes a 30 percent cut on all transactions. Since launching in beta last year, SnoHub has been downloaded more than 10,000 times, signing on roughly 500 contract workers.
Although Albis, too, is at the mercy of El Niño, he concurs with Ariens that a single major snow event can mean a boost in sales. “If everything lines up on a day like today,” Albis continues, referring to the bomb cyclone, “we’re talking over $100,000 in net revenue.” All said, he hopes to bring in $1 million in sales in 2018.
There are still other considerations, even if founders predict the weather accurately. With national and international equipment firms, for instance, it not only matters how much snow sticks to the ground but also where it’s concentrated. Last year, not anticipating that Western mountain regions would see a large share, Ariens failed to order enough large-scale snowblowers with tracks attached to the bottom. Ultimately, the company was forced to turn down some orders, even as it wasn’t selling enough small-scale plows in the East.
Ariens describes the process of preparing for the winter months as little more than a crapshoot. “Even after all of these things we do,” he adds, “we’re still going to Vegas.”