Ive been doing a lot of trenching work, and Im thinking about moving into the residential/commercial paving/excavation business. What I know about asphalt is only what Ive done with paving my trenches in streets. I dont have any experience with pavers, doing driveways etc. It seems pretty easy but Im sure theres plenty to learn....Ive been looking around at pavers, is it possible to get a decent paver for around 10,000? And really what pieces of equipment do you need to get started? I figured a roller, skid steer and the spreader. I have a 6 wheel 33,000lb dumptruck and a utility truck with electricity and an under deck air compressor for jack hammers.
Aliate I would suggest that you research your intended market very well. I don't know how your area is but res/comm construction is way off across the country. Competition is very tight even tougher for a new guying trying to get in. What little I know about asphalt paving is that it's a tough business. Tonnage prices for asphalt fluctuate with oil prices, you are working with a perishable product on a regular basis and if you are going to be in the residential market your going to have competition from the Gypsy Pavers.
whats the gypsy pavers? And yeah I was paying 55$ a ton last year at this time now Im paying 90$
Gypsy pavers are the guys that travel from town to town ripping folks off. It usually goes like this: Guy knocks on the front door of usually elderly people, saying he just finished a job up the street and has some asphalt left over. He says the "normal" price to pave their drive is X and today he can do it for 20% of X because he has left over material. He says they will be laying down a "standard spec" driveway but in reality they skim 1/2" or so over the top. Looks good when they are finished but doesn't last a year. He gets paid in cash and long gone before the crappy job shows itself. They usually operate with no names on the doors, just a DOT #. Of course you wouldn't be this type of "contractor" but you may be competing with them. They also make a bad name for the small paving outfits that do good work.
My honest opinion is not to get into the paving business right now, the initial investment would put you in an immediate disadvantage, plus the material prices are fluctuating wildly and you won't get fair pricing as the new guy. If I had to start something right now I'd go into seal coating build a reputation and client base then move into patching then paving. Since people are tight with money maintenance is the cost saving alternative right now. Good Luck.
Getting paid for small jobs can be a huge pain. If you do go ahead, ally yourself with a bigger company who is doing streets and larger jobs. They don't want to do driveways, etc..don't need the grief. If they move into Mayberry their plant will be handy, you can get your asphalt at your convenience and maybe make a buck. If you're in an urban area that's already well serviced..take up another occupation! Either way, good luck...
thanks for all the advice everyone, how much do you usually mark up the asphalt, like how do you charge the customers? I know there is a lot of competition but Im really good at dealing with people and I have some good ideas in my head and a good look for my company. What I planned to do is advertise and wait to buy a paver, I have a dump truck and tool truck already, Im just missing a paver and a roller. Ive been doing a lot of maintenance work for time warner cable, and Im just trying to expand my horizons and move into the residential sector. Also there is a paving company that said he gets a lot of calls for driveways but doesnt do them as he does a lot of commercial paving. He said he would give them all to me, but Im just not sure how serious he is. Im going to find out this month, he takes winters off.
I'm going to throw in my 2 cents here, if you don't already have a good reliable mechanic get yourself one and if you buy used machines, have your mechanic check them over, in and out and top to bottom, before you buy it, may save you tons of money down the road. Try to find the best operator you can afford and you can trust that won't tear up your machines because an operator can make you or break you. Good luck to you.
just so you know most contractors stop doing residential asap because of the hassles of dealing with the owners and getting paid after a job. If you're not on your "A" game theres a good chance you won't get paid, I would suggest (as I'm someone who still does residential) working with your guys and get a solid game plan together prior to doing a driveway. Number one big area is edges make sure they're straight. Second is mix, if it's too stoney they'll fight paying you because it might look okay for a street or parking lot but that doesn't mean cr@p to a homeowner. Third the easiest place to get a puddle is the first ten feet out of the garage, you set down pad is the most critical part of the drainage plan, I would suggest checking everything with buckets of water before you leave the site, it will cost you a few extra minutes while you're there but it will save you having to come back.
My opinion is sub out the big stuff, patch your trenches that is about it. Too much $$ to stuff into it right now and not enough work. and FWIW your paver operator isnt half as important as a good screed man. :drinkup
Also find yourself a good roller man. An inexperienced roller man can really screw up an otherwise good screed job.:Banghead
And a good rake man will save your butt sometimes.
I think what these nice gents are trying to say is you need a good team to work in the paving business. Best to scrap the idea until you have the right people to help you.
Hendrik, you hit the nail on the head. I hope all things are good in australia.
What everyone said here is very true. I do a few million a year in paving work. Everyone on your crew has got to know what they are doing and whats going on at all times. Best to have a top notch roller man and depending on the type of paver you start with you'll probably end up with a 2-3 man crew running the paving machine. Paving machine, trucks, and roller must flow together like music in order to work. A good paving machine and roller, along with a good crew to run it is a must. If you dont have that then you will make yourself sick coming to work everyday trying to make everything work, trust me, i've been there. Best advice I can give you right now is to maybe start some patching and sealcoating to try and break into the business, but as far as going out and buying an entire outfit, I would wait until the economy perks up a bit. Gypsys and cut throats are giving us a run for our money around these parts.
I am looking into buying a paving company. 3 full time guys and 4 part time. Foreman is one of the 3 full time. I am buying purely for the numbers. Is there anything i should do first while researching this?
purely by the numbers, now would be a horrible time because there may not be any profit potential in the current economy especially with a residential size contractor.
Thanks, the seller may or may not have health issues and this would be an acquisition purely based on the numbers (and it would be nice to create something of value to people). Anyway i would not look at it if the numbers were not right and the people were in place. However it always seems like there is a demand for non-highway blacktop paving. (parking lots/malls/apts/driveways/etc.)
Those tend to be the lowest profit jobs these days because of the lack of work right now. The big highway guys are bidding that work along with the small driveway guys just trying to stay busy. Remember all work these days generally goes to the lowest bidder. Just trying to caution you because I've seen a lot of guys do the same thing in Michigan the past few years and none of the companies that got bought out have made it more than 2 or 3 years. Buying a asphalt company right now generally causes you to incur to much overhead, which generally isn't accounted for in the previous owners books. Good luck to you, and please don't take these comments the wrong way I truly wish you the best.
I would suggest that you work for a small outfit for a full paving season before buying the whole so called shooting match. I see that your location is NY that means you are in a "right to work" state IIRC. This will put you at a disadvantage unless you don't mind paying UNION wages to do the bigger companies driveways. Good luck no matter what you decide to do.
Im not sure where in NC you are or if the business you plan on buying is in NC. Whereabout are we talkins about? Maybe I can give you some insight into the local economy. As far as the paving economy around my area residential isnt doing that bad. Alot of my work this year has been residential whereas normally residential is usually only about 25% of my work. If your around the RTP area and the numbers are right I would say go for it. Just MAKE SURE you know what you are doing. You can lose your a** in a quick minute in this business. I would suggest that you buy the company on the condition that the owner sticks around for a bit and kinda shows you the "ropes" if he is able. I wouldnt buy the business assuming that you will get the work from his repeat customers as there is NO guarantee what so ever that they will deal with you. Plan on acquiring only what he has and starting from scratch. This will probably better prepare you for what you may jump into.
I'm sorry you are in NC and not NY I must have read your location wrong. At least you will not have to deal with the Right to Work stuff.
You have the term "Right to Work" backwards - http://en.wikipedia.org/wiki/Right-to-work_law North Carolina, Georgia as well as 20 other states are "Right to Work" states. Let's just leave it at that...:cool2
LoL...Diesel Fried Chicken...I like that
I should have said that at least you won't have to deal with paying prevailing wage for the driveways given to you by the big company
As some have stated, asphalt prices fluctuate drastically based upon current oil prices. Depending on your source of AC / HMA, prices may or may not be within what is possible for you / your company to perform. During hard economic times, even large paving operations that rely upon state and municipal funds will look for commercial work to keep crews busy, possibly driving out smaller operations based solely upon a cheaper source of HMA (company HMA plants). Given your experience in patching road work, you may or may not have the background necessary to comply with DOT standards in larger operations. As for residential work, I agree with previous posts in that work won, may not translate to work paid. Having worked for one of the largest asphalt suppliers / constructors in the area, the odds seem against any truly profitable gain in today's market. That being said, I honestly believe that anyone with the passion, skills, and ambition to enter a "new market" has the opportunity to do so. Some companies in these parts have specialized in performing the "smaller end" of the work for major projects. This may be as simple as sweeping or mini-milling around structures. Many large paving operations do not bother to deal with seemingly "small jobs", but smaller companies can satisfy larger companies with specialized work that turns specialized skills into cold hard cash, as well as long lasting relationships that will yield work for years to come. If I have miss-read or miss-judged your operation, I sincerely apologize. Feel free to criticize or contact me for any additonal information I may be able to provide. Thank you for reading and I appreciate your time.
Been in the paving buisness since 1982 . No way i would start out now. Also remember a paving company is only worth what its assets are. Do not buy any blue sky. Just my 2 cents worth.
Amen to all the above. Problem with good roller man and good raker, is they get paid well an you have to keep them busy. I had whole paving operation and the good employees are hard to find and keep. Like you I started doing patching and trenches and grew. I have gone back to doing patches and trenches because the big boys don't want to do them and the gypsies cant work with utilities an property managers, as the gypsies require cash upfront. I still do large paving jobs, and actually make more money on them by subbing out. Big paving companies need to keep the big machines and crew busy, and you can capitalize on that. Most will rent you a machine and crew, you buy the asphalt and pay them quick.
Hey, I was thinking about starting this kind of business and I am wondering how much budget should I start with? I am sure I would have to take a loan of some sort. I was thinking of buying some equipment, rollers, pavers ect. This people have some asphalt pavers for sale - used of course and even now I see that I will need to have "a little" bigger budget. And how is this business today? Worth entering?
LOL, Well you could buy my trade in, it's mixed in there with the other listings. Be prepared to spend some serious cash if you want to jump into the business.
Realizing this thread is old, I'll put my 2 cents in anyways (and maybe looking for a little advice as well). My family owns and operates a 2nd generation small paving firm and do about 15,000-20,000 tons a year. This ranges from residential to medium-sized commercial work. Since the recession hit in 2008-09, business has been slow and sometimes it was hard to keep a crew busy. This year, things have picked up quite a bit and from what my old man tells me, they have more work then they know what to do with. However, from what I can tell you, and what others have mentioned here, the asphalt business is a tough one. Asphalt work requires skill, knowledge, people, and a lot of equipment in order to keep things rolling. Many factors can make or break a job in a heart beat (material cost, weather, equipment breakdowns, etc). And did I mention finding good help? After working there for 10+ years, I witnessed first hand the qualms we had with employees. There's also a host of other things to consider as well, but I'll spare you the details. Despite that, we do quality work, have a good reputation, and have built loyal relationships with local businesses and municipalities over the 60+ years in business. We've also been able to ride the hard times by diversifying in seal coating and excavation work. My story is that I went to college and graduated in 2010 with a degree in mechanical engineering. Went to work for corporate America and can't say I've been very satisfied. What a transition it was to go from running a 12 ton old-time Galion roller in 100 degree heat for 12 hours a day to sitting a cubical pushing buttons on a computer. Where did I go wrong? I suppose I chose this route because my dad didn't want me to go through the headaches that him or his dad had to endure. Also, the volatile economy in recent years has influenced me to find a career with a little more stability. Things are "ok" now, but what will things be like in the next yea or two? These are huge things to consider before undertaking such an operation. Despite these challenges, I'm thinking about trading my desk job and getting back into the family business. Most people would say I'm crazy, sometimes stupid, but nothing compares to the satisfaction obtained while working in construction. With the old man reaching retirement age (although he will never truly retire), I feel like it's now or never. You could say I've reached a fork in the road- work for "the man" for the next 40 years OR make my own way while carrying on a legacy. Putting all emotion aside, for someone who's no stranger to asphalt, is it a good idea to take over an asphalt business in this day and age? Things have changed quite dramatically from the time when my dad or his dad took over/started this business. Competition is stiff, prices are erratic, good help is harder and harder to find, and the economy can't go for more than 5 years without a crash. I know what my old man's answer is, but I wanted to get a third perspective. Sorry I didn't mean to hijack this thread, but any advice from those of you who've also been in the business would be appreciated (this would also be good advice for op and others).
Welcome to the Forums Joe, glad to have you here!:drinkup Your question is a tough one that many folks go through in there life. I can't give you advice one way or the other not knowing your personal situation. However there is an old saying that rings true - "If you love what you do, you never have to go to work ." Construction gets in your blood and is hard to stay away from. It has to be a passion to put up with all the BS and struggles that go along with it. Some say we are crazy for being in this business and I would answer them "Yeah we are...."