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As winter storm Stella hits, a snow-plowing business reaps the profits

March 15,2017 11:24

While snowstorms like Stella are unwelcome for many small companies, forcing them to close down and lose valuable profits, for those in the business of ...and more »



While snowstorms like Stella are unwelcome for many small companies, forcing them to close down and lose valuable profits, for those in the business of plowing it means game on.

As the winter storm pummeled the East Coast on Tuesday, J. Campoli & Sons, Inc., got to work. The 71-year-old general contracting company based in Cresskill, N.J., got into the plowing business more than 50 years ago to diversify its earnings in the winter. Today, snow removal accounts for about 25 percent of the company's business each year.

While a big storm can mean added business, co-owner John Campoli said a lot of preparation goes into working any major snowstorm.

Liza Hughes | CNBC
Brad and John Campoli, co-owners of J. Campoli & Sons Building Contractors in Cresskill, N.J., gear up for Stella.

"We prepare just like a municipality would, because of the scale and size of our business," said Campoli, who runs the business with his nephew, Brad. "It's making sure we have enough ice melt and sodium in our warehouse. We're also preparing equipment and moving it to certain sites where they're needed."

In heavy snow conditions, Campoli said the company can have as many as 25 plows out with up to 40 workers. The company typically removes snow for private businesses.

Insurance for snow alone can be up to $100,000, outside of general liability coverage for construction. In addition, the business can pay another $70,000 or so for auto insurance.

"We are always reinvesting back in old equipment. It becomes more expensive to replace. And our biggest challenge, bar-none, is liability insurance for snow," he said. "Insurance companies have separated their liability insurance, and it's become a high-risk exposure."

Quantifying losses for smaller companies that aren't out plowing on snow days is harder to do. A 2014 study from IHS Global Insight found that a major storm with roads that are "impassable" could have a significant economic impact for just a one-day shutdown. A single day's shutdown in New York, the report said, could cost about $700 million, while in Massachusetts the price tag is $265 million.

Campoli said his company can gross near a million dollars in a strong year with major storms or as little as $350,000 in a weaker year. Expenses are also a constant, with most of the cash they make being put right back into the company.

"We see this 12 months a year — it's not just about the day it snows," he said.

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