This is an idea i have been completing for a few months, basically acquiring some used machinery and getting into the business. a little background on me, I have a diploma as a construction tech, worked construction for a few years and learned to operate on jobsites. Eventually got licences for heavy equipment and trucks (everything except semis) Did a stint in the navy as a mechanic, got my journeyman papers as a millwright when i left. Perhaps the most important lessons from the navy was how to manage jobs and how NOT to manage people. I would like to get back into the construction fields. I have very good credit and some capital put away for this. My plan is to start with the following 2 dump trucks a tag along float a excavator a wheel loader or rubber tire backhoe. A pickup as a service truck Plan isi to mostly do hourly rate work for property owners, while bidding on locals contracts as they come up. Also to rent addition equipment if needed and contract with other contractors if necessary. I considered a skidsteer/mini ex service and growing from there, but there seems to be a ton of guys doing that already and the cost of machinery isnt all that different for a good used mini and a larger machine. Im looking into using a leasing company as compared to buying equipment with a loan and using my downpayment funds to cover operating expenses until the company becomes profitable. Im curious to your guys thoughts on this plan.
Welcome to the Forums Johnsmith6697!:drinkup You seem to have a clear plan to start with. How is the work load in your market? Is your market a large metro area or rural? Hows the residential new construction market? Starting out and the equipment you want to start with, residential new construction would be a good market to research before you take the plunge. Give us a little more info on your local market.
population of about 200,000. residental market had been booming, but the drop in oil prices as slowed things down. pushed some of the fly by night contractors, as well as property speculators under, which might not be a bad thing. The price of oil is slowly creeping up, so it could be a good sign. The other factor is the infrastructure deficit in this area, especially in roads. its becoming bigger and bigger and will have to be addressed with in the not too distance future. So i think there could be opportunity there
Put some feelers out into the res. market and do some research, that would be a good place to start. Get your equipment running and bring in cash flow. The road and infrastructure market is a lucrative one but if it's like it is here the time period for payment is long, usually 90 or more days compared to res. work where you get paid every 2 weeks. General commercial work is usually 30 days. The time for payment can be accounted for in pricing, the longer the wait the more the job is. We're contractors not loan officers, the carrying costs of your capital needs to be paid for. I know several residential excavators that are doing very well right now, I'm actually pondering the notion to get into that market in addition to the commercial market which is the bulk of our work. Keep us posted.
Why 2 dump trucks? I would consider adding a dozer to that list, but it really depends on the type of work your targeting or landing.
2 trucks are what id like to start with, however in the desire to keep start up cost low, and all that wonderful stuff, its probably just going to be one truck at the very beginning. The idea of a second truck is based on wanting to bid on road maintenance contracts and i think the extra truck would be needed. A dozer is something i would like to have, however i dont think i would use it enough starting out to justify it. After looking into leasing i think that is the path i will take. Seems like might be the best idea starting out.
You sound smart and ambitious. Working for your self is the best career, IMO. I'd buy a back hoe loader before I'd think of a wheel loader, unless you have some special business opportunity to use a wheel loader. Where I am in the west US, mini and small excavators have the best return-on-investment for small or one man business's. (Landscape/hardscape/yard improvement is lucrative, when there are some affluent mini-estate/ranch-ette/McMansion property owners around...) Good luck! Working for yourself is an adventure, and it is very rewarding.
Thanks guys for the good advice. Gives me a few more things to consider. As far as loader vs backhoe, i have been weighting that argument for the last week. snowclearing makes up an important sector if the work around here, wheel loader is better machine for it, and its easier to find used loaders with plows and at a better price. However i think im leaning toward a backhoe and try to find one with a blade or at least set up for one. worry about if i need a loader in the future. Im stuck on the mini verus full size decision. I think minis have a really good opportunity and use,Id actually take a mini excavtor over a backhoe just about any day. However there are two things holding me back on them. one is that they are essentually the same cost used as a full size machine. The major thing is that there seems to be lot of guys that have bought them as a "toy" and then hire them out at a cost that must only create enough cash flow cover the monthly payment. I think that to specialize in these and make a living while competing with these guys would be difficult.....
If you go with a backhoe remember it's a support piece and not necessarily a money earner on an hourly basis. Like you said you'd be competing with the "bubba's and a backhoe" that whore the market up on hourly jobs. However a backhoe can be very useful and profitable on contract jobs, supporting other pieces and be able to do many tasks. I have a 420D IT that sits most of the time and it can as it's paid for. There are still ownership costs involved but I use it enough to cover those and make a profit. My backhoe is mainly used to support pipe laying as it's cheaper to shuttle stone to the rock box and carry pipe than using the 953. It also does very well backfilling curbs and final grading on small commercial projects since it needs to run on finished surfaces. Sure a mini shines in some applications but a mini can't carry a stick of 30" RCP or a 48" manhole across a site and shake materials out ahead of pipe laying, nor can the mini keep a 7 yard rock box filled. If you decide to go the backhoe route be sure and get an IT model. The hydraulic quick coupler and aux. hydraulics are worth it. Our backhoe may switch between bucket and forks several times a day and I hate hang on bucket forks. It just depends on what you'll be doing. A backhoe could do double duty digging in summer and pushing snow in the winter. That being said I live in Alabama so I know nothing about the white stuff or the right equipment to handle it.
Hello! I am new to this site. I have the same questions on looking into starting a grading business. Ok, some detail and background story on me. I work currently for my father and along side my younger brother and older brother. Its a family business. Dad started the Company back in 1993. The company name is Rockland Mini Buildings Mgf. Inc. We sell alot of stuff, but our main MO is these wood framed Aluminum steel roofed mini utility buildings ( portable backyard storage buildings). We sell these galvanized square tubed framed Carports, RV covers, boat cover, "pole" Barns, and enclosed garages. We sell utility trailers and Enclosed cargo trailers. We also carry dog kennels, well houses/pump houses, small offices, and cabins. I work as a sales associate basically and office manager I guess ( idk what my title would be lol). My dad has told me that I need to try to find something to do on the side to make money. Not that we are in some kind of economical slump. We are wind open and can't keep up especially now, because like most businesses that involves outdoor stuff spring/tax season is always busy. Anyways my dad wants me to start something but my dad I a weird guy to understand lol. I have ran this by him and he pretty much told me its not something I should do, but he is like that( I can go deep into how he is and will if you want to know). Ok the steel frame buildings for one is why I think I could make money doing grading work and possibly concrete work. I have read alot of peoples thoughts on what some guys should do that want to get some equipment and do all this grading and ex. And i think i would start just renting a skid steer to do these jobs. Sounds like a smarter choice instead of buying alll this stuff that may not get used enough to and be profitable. I have experience driving a tractor and forklift and i have used a rented skid steer and a guy who is a close "business friends"but only a handful of times. I feel that i could do this and it be semi to pretty beneficial to RMB INC. and Id also would do other stuff to that involves earth moving.the thing with my dad he has said to do something on the side but everything I think of he says its not worth it you know. For instance i have built some playhouses to order but he wont let me make just a stock playhouse as a display, i have made some furniture and some repurposed furniture he wont let me make any as a display, and alot of other things as well.
Sorry for the long message and that tangent. But that's mu main reason I'm here to get a good opinion. I'd like to buy a back hoe because when I can bid on digging out muck pits here in Elberton. Elberton is actually known as the Granite City Capital of The World. Also you may know of or heard of the "Georgia Guide Stones" here in Elbert County.
Well since the truck i was looking to buy got sold out from under me...... im taking a little to reconsider my plan. kind of should i go with the larger equipment, or set up a lawn care/property management/landscaping operation. As far as progress on this idea goes, application will be sent to the leasing company tomorrow. A formal business plan is being worked on. Also started the paperwork progress to register the business and all that assorted buracratic bs. Any thoughts?
Speaking of bureaucratic b.s. , don't forget about d.o.t requirements for equipment transport. Not to discourage but, when going used equipment a major repair can cost as much as you paid for the machine.
Tyler, a slid steer is an expensive peice of equipment and you have to have it reliable and a way to move it around. I think it's a good idea, just make sure you research all the cost involved. You need a good truck and trailer to go with it as well. Insurance, taxes, fees, etc. Somebody is doi g it for your customers and making money at it, look at their model as well.
Ive reconsidered my idea a little. Cutting back the start up equipment to just a truck, flaot and a backhoe. I'll rent addictional equipment as i need it, and buy when either the amount of use justifies it, or the right deal is available. Cost of leasing yard space, and some other things are more then i had estimated, and trying to not borrow too much at the beginning. (id like to not get a business start up loan, although i might be better off) Just considering rates. While most people charge by the hour, and usually with a min of say 2 of 4 hours, as anyone tryed charging by the bay? Say $500 for the first half of the day, $800 for the full day, and perhaps charge by the hour for anything after that.
To just touch on the wheel loader and snow, some of the contract work around here for snow clearing specifies a machine with a wing plow, which is usually a loader. i know one guy who does this work had his loader, with blade and wing, sit in the yard all winter, done everything with a 3/4 pickup.
There are several more overhead costs associated with running a business such as taxes, insurance - workers comp., GL and equipment/auto in addition to general office expense such as phone, internet, computer, etc. It adds up quickly and you're on the right track doing your homework on the costs of opening your business. There will be other costs like I listed above that will come as you grow your business, just be aware of them and charge accordingly. Overhead, maintenance, payroll and repair costs can add up quickly and I guarantee you'll be sitting there going over the books saying - "Where did the money go?" But don't fret, we all have those moments as it's part of being a small business owner. The key to success is minimizing your overhead costs and maximizing your income. That involves marketing, building relationships, working smarter not harder and doing a damn good job at a fair price for your customers. On the topic of minimums, a 4 hour is the base you should charge to roll onto a job. You can't make money with a 2 hour minimum when you figure in mobilization costs. If the job only takes 1 hour to do, still charge 4 as you have to get to the job and that is a cost in itself. Just remember your time to bid on a job and the knowledge of how to tackle a job, is just as valuable as the machine you operate to complete the job. Keep us posted as your venture evolves.