Big data is critical to business success because it provides leadership with important insights and information. Large enterprises use sophisticated systems to track data and often have internal analysts on their team to crunch their numbers. Or, they hire outside experts to do it for them. Yet any enterprise can take advantage of big data, no matter their size, especially if you re-frame your definition of “big.” You can use your data to better understand your customer needs and buying patterns to further develop strategies that could impact the sale of your winter snow and ice management services. Insights like those developed with data become amazingly useful to any size snow and ice management operation.

1 Slay Your Fears

You’ve heard some people say, “I'm really not a numbers person.” Perhaps they use this as their excuse for avoiding using data, much less big data, because they might feel reluctant to dive in and give it a try. You do not need an MBA or finance degree to begin working with the data associated with your business, regardless of its size. Anyone can learn and understand at least a couple of the key metrics that impact how they operate and what drives financial success.

If you are reluctant to launch into data analytics with your snow and ice management operation, begin with some baby steps. Start by identifying two or three key metrics you want to better understand about your business or your customers. Once you have these key metrics identified, then focus on getting the data you need to help better understand what drives these metrics and how you can use the data to increase your enterprise performance. Then those metrics become the fundamentals that shape your thinking about your business strategies and what you need to do to better achieve your business goals.

Focus on how the data you have or can gather links to your business strategies. The key is to search for the critical data metrics that influence decision making. Look for the information that provides you with insight on the variables that impact your revenue and profitability.

2 You Have The Info And Tools

You do not need a complicated computer system or major data management firm to figure out what you are already using in your business for data capture. Frankly, many organizations – and snow and ice management operations are not immune to this – are not fully utilizing the existing software they already have to gather basic information.

Frequently, software programs have the capability to export information into analytical programs such as Excel. Once the data is put into an analytic format, you can do all sorts of data evaluation based on key variables such as customer demographics, profitability, geographic location, purchasing patterns, buying volume, etc.

Reviewing data points for various time horizons provides a comparison to see how much is changing during different time periods. Engaging in analytical assessments of your data often provides valuable information on shifts in your target market and identifies new sales opportunities. You might even uncover areas of business vulnerability before they cause major challenges.

Many companies do not fully access the information they have already obtained about their customers. Taking time to input detailed information into a Contact Relationship Management (CRM) system can be a first step.

Then, consolidate the insight from your other information systems to develop a comprehensive customer profile. Then drill down into the information on your customers and tie them to financial measurements such as sales volume, degree of profitability or key target marketing variables.

It is not uncommon for smaller enterprises to have their most valuable customer information written down on sheets of paper or in someone’s head. If you enter your data into a CRM or Excel, you establish the foundation for a more robust data assessment of your snow and ice management operation. Then you can begin to pull insights by looking carefully at key variables.

You will have a more effective way of targeting your desired consumers – let's say large-scale manufacturing or retail strip malls – as you drill down deeper into the data to see which customers are most valuable to your bottom line.

You will make better decisions if you are using thoughtfully mined data already present and available through your snow and ice management operations. You will also minimize the vulnerability to not having good information to work with if a key employee becomes ill or leaves.

3 Create Metrics And Dashboards

When you begin working with data, it is essential to create metrics and dashboard reports focusing on the key information so it can be tracked on an on-going basis. Then set up the mechanisms and policies that ensure it is tracked by your employees. Holding your team accountable for reliably gathering the data and tracking it in a timely manner are also important steps to effectively use data.

Another option is to work with an outside consultant who does this all the time and is not going to struggle with a learning curve. Outside experts can help you discover details you might have overlooked while managing the enterprise day-to-day of your snow and ice management operation, or even your larger, overall business. You are likely to gain better insights – and move much faster – by bringing in outside expertise for a short duration engagement rather than trying to struggle through setting it up by yourself.

It is not a cliché that “time is money.” Invest in learning from an expert and then take it over once you develop the foundational skills and have gained some confidence in your own abilities.

4 The Final Push

Learning to leverage data is essential to impacting the growth and success of any business. As you become more comfortable using your initial metrics, you can add on additional key metrics.

Using a disciplined approach and continue to look for more metrics to measure. And don't forget to embrace this new challenge and have fun with it. Soon you will soon have a robust data management system that you and your team can use to more effectively manage your business and your customer relationships.

Taken together, this data will provide you with new pathways for business growth and enhanced success with your snow and ice management business.

A frequent Snow Magazine contributor, Jill J. Johnson, MBA, is the President and Founder of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence.

Whether it is equipment, other business assets or even the property housing the snow removal and ice management operation, lease and rental payments are frequently one of the largest recurring expenses. Soon, however, those leases will be required to be listed as liabilities on the balance sheet — suddenly visible to potential investors, lenders, and suppliers.

This is quite a change from the existing treatment where many leases have long been considered operating leases and rental payments treated as currently deductible operating expenses on the operation’s financial statements. Publicly traded companies are already required to begin treating leases as liabilities, but privately held businesses recently received a one-year extension for compliance with all new accounting standards including the lease reporting requirements.

The Coronavirus Pandemic has brought to light the importance of having lease data, such as termination clauses, rent abatement and co-tenancy clauses. In volatile times such as these, every professional snow removal professional needs to be able to quickly identify their rights and obligations buried in their real estate and lease agreements. Prompt access to this information could unlock thousands of dollars in savings – and newly available funding.

ACCOUNTING FOR LEASES

Historically, accounting for leases has been straightforward: Determine whether it is a capital or an operating lease. For the latter, disclosure of operating lease amounts is considered a component of future commitments only, as these relationships are classified as “off-balance sheet.” This off-balance sheet treatment has long created a challenge for investors and lenders as they attempt to understand a business’s financial obligations and future profit potential.

The culmination of years of debate, the new lease standard (ASC 842, Leases), requires businesses to move the future costs of their operating leases from the footnotes where they are now reported to the category of “liabilities” on the balance sheet. A corresponding “right to use” asset gets reported on the asset side.

In addition to changing how lessees account for operating leases, the Financial Accounting Standards Board (FASB), the organization responsible for establishing accounting and financial reporting standards, also changed how leases are identified. According to the FASB, a lease is defined as a contract – or part of a contract – that conveys the right to control the use of identified property, plant or equipment (an identified asset) for a period of time in exchange for consideration.

In contrast, the ASC 842 defines a lease as an agreement conveying the right to use property, plant or equipment (land and/or depreciable assets) usually for a stated period of time. Close, but no cigar.

While the legal definition of a lease appears substantially the same, ASC 842 significantly changes how leases are identified. Under ASC 842, a contract is, or contains, a lease if the customer (lessee) has the right to obtain substantially all of the economic benefits from the sale of the identified property, plant or snow and ice equipment (PP&E) and the right to direct the use of the identified PP&E throughout the time that the identified PP&E will be used to fulfill the contract with the customer (lessee).

HOW BIG THE IMPACT

The biggest impact from this change is, as mentioned, its effect on liabilities. The sudden spike in liabilities might trigger a loan or debt covenant and have creditors knocking on the snow removal or ice management operation’s door.

Fortunately, all of those liabilities will be offset by so-called “right-to-use” assets on the other side of the balance sheet. By adding more assets to the balance sheet, this new standard increases the denominator when calculating return on assets (ROA) (net income ÷ total assets). That pushes the operation’s ROA number lower without any fundamental change in business operations.

This is quite a change from the existing treatment where many leases have long been considered operating leases and rental payments treated as currently deductible operating expenses on the operation’s financial statements.”

THE UPSIDE

While the new leasing standard will require new accounting procedures and reporting, the benefits of leasing remain – and perhaps are improved. Combined with changes in the tax laws, lease financing with its wide range of inherent advantages, will continue to be a beneficial option of equipment acquisitions.

Passed at the end of 2017, the Tax Cuts and Jobs Act (TCJA) included several provisions impacting on equipment acquisitions and financing. After all, leasing allows any business unable to use 100% bonus depreciation, to benefit via a reduced lease rate since the lessor can claim the 100% write-off. Lessees may also reap an economic benefit simply by entering into sale-leaseback for an asset already fully expensed since the gain taxed on the sale (assuming 100% gain) would be taxed at the new favorable 21% tax rate for corporations.

SALE LEASEBACKS

Sale leaseback transactions or “leasebacks” as they are more commonly called, are transactions in which a snow removal business sells an asset and leases it back for the long term. In other words, the business continues to be able to use the asset but no longer owns it.

Among the advantage of leasebacks is that it enables a business to realize cash from existing business assets, equipment, plant and machinery. The cash gained can be used for many purposes including business acquisitions or simply providing extra working capital. The buyer, often the operation’s owner or key employees, reap the many tax benefits from owning the property they lease back to the snow and ice removal business.

Under the new ASC 842 standard, the leaseback transaction would not be considered a sale if (1) it does not qualify as a sale under other accounting standards, or (2) the leaseback is a finance lease. A repurchase option would result in a failed sale unless (1) the exercise price of the option is at fair market value and (2) there are alternative assets readily available in the marketplace. If the transaction qualifies as a sale, the entire gain on the transaction would be recognized.

Sales and leasebacks which include a fixed price purchase option will, as mentioned, no longer be considered a “successful” sale and leaseback. A failed sale-leaseback occurs when:

• Leaseback in classified as a finance lease, or
• A leaseback includes a repurchase option that is at other than the asset’s fair value determined on the date the option is exercised.

This last item means that any sale and leaseback that includes a fixed price purchase option at the end will remain on the lessee’s balance sheet at its full value and classified as a fixed asset rather than as a Right of Use Asset. Even though an asset may have been legally sold, a sale is not reported, and the asset is not removed from the lessee’s balance sheet if these conditions exist.

THE ECONOMIC BENEFITS OF LEASING

It is the rare business that doesn’t consider leasing as an option for financing equipment for a variety of reasons, including:

Tax Management. Leases allow lessees to more efficiently manage taxes. And, when they cannot utilize all of the deductions, the lessors often can and pass the benefits through via lower lease and rental rates.

100% Financing. A lease generally equates to 100% financing of equipment, software, and services with zero down payment.

Keeping Current. Keep up with technology by acquiring more and better equipment compared to loan financing. Risk is avoided risk because that risk is assumed by the lessor.

Cash Flow Management. Smaller, more manageable and flexible payments while the equipment generates the revenue.

Cash Savings. Freeing limited cash for other areas of the business, such as expansion, improvements, marketing, etc.

IT’S TRANSPARENCY ONCE AGAIN

The new lease standard is designed to improve and clarify the financial reporting of lease transactions. Bottom-line, the new rules should have little or no impact on an operation’s income statement and, thus, there should be no effect on debt covenants. However, classifying, recording, and reporting lease transactions will pose a problem in many snow removal contractors.

The new standard seeks to provide more transparency by changing the accounting view and the ways that a business accounts for leasing transactions. Every snow removal professional has a unique opportunity to reap dual benefits by gathering important data to save money during these uncertain times while preparing to meet the upcoming accounting changes for leases.

By properly managing lease data and financial statements, a snow removal and ice management business can avoid costly penalties, prevent rent overpayments and refinance leases – resulting in hefty cost savings given the expensive nature of real estate and equipment leases. As always, however, professional assistance is highly recommended.

Mark E. Battersby is Snow Magazine’s financial writer. He’s based out of Ardmore, Pa.

Recently during a leadership seminar the speaker used the phrase: “Being safe and making an impact do not happen together.“ As I look around our mask-clad world today I wonder how many impactful activities will be cancelled or postponed? How many impactful events will simply never happen? And how many canceled plans will adversely affect so many others through a ripple effect of events?

In a time and space when our children were given a passing grade and simply moved along to the next stage of their lives, we used to call it “a hall pass.“ And you’re seeing this phenomena today as people have their food delivered, their jobs delivered, their education delivered, their everything delivered. I wonder, where are we headed?

I look around my world and realize we’re living in an age where using cash is frowned on or simply not acceptable, a world where our information comes through a small device that looks and listens back at us. Our lives are directed by actions and decisions that tend toward extreme comfort. Therefore, I can’t help but watch and wonder as the world becomes more complacent and “comfy” with working from home while never having to get dressed or leave for work every day. When we finally emerge from this time and space, we will do so from an environment of “stay safe/stay clean.“ And I wonder if we will look back and say to ourselves “Wow, while I was sitting at home, having my life delivered to me, I am so incredibly proud of the impact I made in the lives of others.”

My guess is most of us would respond with a resounding: “No!”

As human beings, our nature is to form groups and clusters. We need each other to be the best we can be so the group prospers. Just as we require fresh air and hard work to stimulate our health, we need to gather together in meetings, school rooms, parks, teams, backyards, and places of worship. We need weddings and funerals, if only to have opportunities to reach out and hug one another. We need to love and be loved. We desire connection and the ability to make a difference in the lives of others.

If you doubt this hypothesis and consider these the rantings of a sentimental old fool, then consider the overriding urge these last few months to support local businesses and charities and to do what we can to assist those who are struggling or are less fortunate then ourselves.

So, my friends, here is my question: In our businesses and in our lives -- whether it is during COVID times or non-COVID times – when are we making a real selfless and significant impact?

Our founding fathers were on to something because they wanted real change and they wanted to make an impact. Following our independence from Britain, their lives were far from comfy and safe, and their future prosperity was not certain. But through teamwork, debate and unquenchable passion they created a foothold to build on and the structure by which our society thrives to this day

As you make our To-Do Lists to start your day/week/month/quarter, keep in mind that what you focus on — expands. Therefore, I suggest focusing on integrating into your routine the means to allow you to have a significant and measurable impact in the lives of others.

Good luck and God bless.

Troy Clogg is the founder and president of Troy Clogg Landscape Associates in Wixom, Mich. He is a frequent Snow Magazine contributor and a 2010 Leadership Award recipient.

Admittedly, what you most likely heard from the ASCA over the last few months had a lot to do with September’s virtual Executive Summit. Yes, we may have flooded your inboxes with announcements and invitations extolling the benefits and virtues of our two-day online educational and networking event, but we were very excited about getting you involved in the experience that temporarily took the place of our annual in-person event.

But with 2020 Executive Summit behind us, what I want to address today is our continued fight for the professional snow and ice management community through these highly unusual times. As you know, legislative initiatives and the upkeep of the ANSI Industry Standards for the snow and ice management industry are two of the ASCA’s highest priorities.

Here’s an update on our activities with these two initiatives.

Legislative

Our fight for positive legislative change is primarily in the state-level legislative trenches. The COVID-19 pandemic brought most state legislatures to a virtual standstill on non-COVID legislation, which included initiatives that, during a “normal” year, would have included our legislative interests. While the pandemic remains, legislatures in our key states are back to business as usual. Most state legislatures have returned to work debating and considering a broad spectrum of legislation. With the November election on the horizon, elected officials are aware they must show their constituents they are working for them on everything. Therefore, we expect and are experiencing more activity and conversations on the ASCA’s model legislation, The Snow Removal Limited Liability Act, which levels the playing field in indemnity language in snow contracts.

Specifically, we have been working very closely with the Pennsylvania state legislature and our lobbyist in Harrisburg to create some forward momentum for our bill, House Bill 1702. The plan is to include ASCA’s model legislation, House Bill 1702, into a similar bill, House Bill 1887. This bill may be up for consideration by the Pennsylvania House of Representatives in the coming weeks. The Pennsylvania snow and ice management community must rally around House Bill 1887 and amendment A07334 and generate support among state legislators. Therefore, we need Pennsylvania contractors to contact their state representatives and urge them to support House Bill 1887. Contact me directly (kgilbride@ascaonline.com) for detailed instructions on how to connect with your rep.

In New Jersey, I’m excited to say our behind-the-scenes work in Trenton, in conjunction with our partners at the New Jersey Landscape Contractors Association (NJLCA), has resulted in additional support to reintroduce our model legislation. We anticipate Garden State legislators will reintroduce our bill, with bi-partisan support, in the near future.

Likewise, the ASCA continues to work with its strategic partners in other snow states to get the model legislation introduced and passed.

Industry Standards

The ASCA continues to maintain the System Requirements for Snow and Ice Management Services: ANSI/ASCA A1000-2014, commonly known as the Industry Standards. These standards provide a compressive outline for the processes and procedures for snow and ice management companies to maximize operational efficiency and reduce risk. Most importantly, they provide snow and ice management companies the proper documentational requirements helpful in defending your company against slip-and-fall litigation.

The ASCA is currently preparing for annual audit on the Industry Standards, and will have this process completed in early 2021.

Other News Of Note

The ASCA encourages member involvement not only in legislative initiatives, but also in other aspects of the association’s endeavors.

I can’t stress enough that the strides we’ve made and the accomplishments we’ve achieved have been a group effort and could not have been realized without the commitment of association members’ time and energy. While my role as Executive Director places me as the face of the association, the ASCA is the sum total of the efforts and commitment of its membership. And we are only as strong and effective as the involvement of those members who, when needed, have stepped up to the plate and swung for the fences.

If you’d like to get involved for the betterment of your industry, contact me directly. There are a variety of outlets I can match you up with, from serving on an association committee to rallying industry support for legislative change in your home state. Trust me, there is no better feeling then knowing you’ve played a significant role in positive change that impacts and betters an industry.

Lastly, I’d like to announce next year’s Executive Summit is taking place at the Omni Amelia Island Resort, which was the intended site of this year’s event. It is an incredible facility and the perfect site for professional development and networking. The dates will be announced as soon as they are worked out with the host facility. Let’s hope the pandemic is but a distant memory by then, and the only concern is for lots of sunny weather.

Kevin Gilbride is the ASCA’s Executive Director. You can reach him directly at kgilbride@ascaonline.com.