Hello to all. I am a newbie on this site and I have a few questions for all of you experienced diiggers. I am looking to get into the backhoe business with my own dump truck, trailer and backhoe. I have been in the retail business for a while and it stinks now that the economy has taken a dump. I have enough funds to pay for all of my equipment so I will not have any payments. I plan on getting insurance to cover myself. The big question is, is it worth getting into this type of business. I know that you have to work at anything that you do but I want to know about the money and the profit margins. I would like to hear all thoughts.
My advice would be to not limit yourself to just backhoe work. I don't know what is going on in your area, but adding an additional piece of equipment might just open up your job market. In my area, the guys that just do backhoe work are pretty slow, if not out of the business because of the economy. A skidsteer, for instance, with all the attachments that can be rented might open up your opportunities considerably.
Guy I knew told me the insurance ran $400 a month if he never dug deeper than 4 feet. $1600 a month if he went deeper; all the utility lines are under at least 4 feet of dirt. We were down for 3 days of no phones because of someone with a hoe. Other thing I saw was a guy with a backhoe on a D-4 sized track machine. He could get into hillside sites and other places no one would/could go. He was getting the same kind of money for his little machine that people with big tracked excavators were getting. In other words, try to find a profitable spot, not what everybody else is doing.
Maybe concider a Mini dig and a skidsteer, i have run alot of backhoes and i have found that mini dig's and skidsteers work better for some aplications and i belive that they are more versitle than a backhoe in most places. with two smaller machines your not limmeted to a small scope of work, I E utility contracting. Landscapeing with a skidsteer is easier because you can see what you are doing and can get more attachments to make you more productive, another employee can be useful to clean up with one machine while the other is proforming another task aswell you are not relying on one machine incase one goes down. What sise of backhoe and what make were you looking at?
I would also suggest looking at a mini-ex and a skidsteer, Backhoes are good at a lot of things but not great at anything. Something else to consider is when your business grows you'll be able to utilize the different assets on seperate jobs. The readily available attachments for skidsteers make them super versatile and most can be rented for very little money until you can justify purchasing your own.
I was looking at a 80-100 Hp backhoe. I would like to stay with John deere or Cat but I have found some JCB backhoes at pretty decent prices. Anything to these machines?
Do you have any experience? Who is going to do your estimating? What type of work do you plan on doing? Do you have a place to put materials? If you don't have experience in the field it can end up costing you and not just money. Would like to know if you have all your bases covered. Don't want this to be you:Banghead
Welcome to the forum digginchaz :drinkup. Lots of good advice I think. Glad I'm not in the business. Getting paid, is something else to worry about. Lots of backhoes out there, seems everyone has one, so there's lots of competition. Takes a long time to build up a customer base, can you put food on the table until your business is established? Are you good with a wrench..if you can't do at least some of your repairs it might get interesting. Consider the cost of parts when you decide on a make of machine, aftermarket parts available? Nothing like throwing a pail of cold water on an idea. Phil
Cost of downtime also comes into play with parts availability and dealer network/support. An expensive part in stock is cheaper than a less expensive backordered part a week out in a busy season.
I know that we are on oppostie sides of the world but....many of the local contractors in my area run mini excavators as well as their backhoes. It seems the ideal setup is- backhoe + truck & trailer + mini ex + bobcat. (covers alot of bases) I'm also thinking of a business and am interested to hear peoples thoughts on profit margins. A couple of blokes I know that run backhoes reckon it's just a way of buying a job (ie: similar net earnings to a wage slave) A business plan (including back-up/get out, plan) is a must.
Yup more responcibility's and more headaches the only thing you will gain is hopefuly a sense of acomplishment rather than utter failure, all the money you will earn will have to be dumped back into your business for a few years until your business is stable
I guess you could also add in tax deductable items.... Vehicle and service trailer (+ a percentage of your personal vehicle) fuel/oils etc phones home office clothing Of course, you've got to pay for all that first but it is something you can't claim on wages. (in Australia anyway)
But it can be done !!! just make sure you are in it because you want to do great work and satisfy customers, if you go in it half assed you make the rest of us look bad
I would really look close at what is available in your area. Talk to some excavators, General Contractors, look through the Yellowpages and google your area. Get a good idea of how saturated your area is. Also pay attention to what types of services are offered and what is not. Based on what you find out, structure your business to fill the niche thats open (assuming there is some room for another). Buying a backhoe without investigating whats going on in your area, is silly. A couple three years ago you could start an excavating business anywhere in America and make money. Thats not true any more. Here it is about diversity. A one trick back hoe pony wont get you far. However what really matters is what is happening in your area. Remember the old story of an excavator that won the Powerball one year. They asked what he was going to do with his millions. He said he would probably just keep excavating until it all gone. A lot truth to that especially lately.
If you have done your homework and have worked out all the unforseen disasters by all means jump in with both feet and hope you dont drown. My suggestions would be contact the contractors in your area and see what work they might have to throw your way. You will get the work nobody wants but if there is enough you can get your name out and more business to follow. If you have a truck you might try the hauling business and see what else your customers need. Alot of guys make enough hauling they dont have time to dig. Another point to mention is I put twice as many hours on my skids as my hoe. I even rent a mini X on ocassion even though I have a full size hoe. When its all said and done I still have a full time job working for the MAN to ensure a retirement and health care benefits. I can make enough to support the business easily but there are always slow times and seldom is there enough excess to invest in my retirement.
Insurance is a high cost for sure, it's more if you want to truck for hire. I'm going through the same things right now, the transportation side is much higher than the contractor liability. Right now the majority of work is maintenance - like sewer lines, downspout drains, concrete and other associated residential stuff. Around me, landscapers are dime a dozen and thats the industry I have the most experience in, but even the ones without skids can rent them. You have to try to find guys who sub the machine work out, they are out there. I've even considered picking up a crane and subbing to the tree services, although as more and more get their own cranes, this will get harder to do.
backhoe Im from eastern NC and I was in the septic business, but when the economy went bad, so did that work. I would suggest you get in that business, unless you have some customers. Its hard out there now, unless you have good contacts, even in my area, a backhoe is usually used for septic, footers, small excavations, etc. My best piece of equipment ever purchased was a skidsteer, but again you have to have work for it. I use it to final grade, spread dirt, load debris, etc. its about ten times faster than a backhoe. About the only thing that we have going, is contract hauling (dump trucks) we have lucked out and gotten on 2 state highway jobs and its kept us busy what area are you in? Good Luck
In most areas construction has been much slower than it has in the past. That will make it very hard for you to get a business started. Especially if you are new to the business. I started my business in CA about 15 years ago. I started with (1) backhoe and I didn't even have a way to move it myself. I almost failed several times despite the good economy. As others have said, finding a niche will be key. In my experience most work for a single backhoe is hourly, operated rental. Do you have any previous experience or any potential customers/contacts? With so much competition in the hourly, operated rental business you have to have something that really sets you apart. Being the best , most productive, reliable guy around is a good start. I doubt that will be the case if you don't have any/much experience. Even if you are it may take a while for you to get the exposure so that the customer base will realize what you have to offer, especially in a depressed market.
I started a backhoe business like you are thinking of about a year and a half ago, and i've been happier at work than i've ever been. A man can make a decent living at it, as long as he realizes that you won't be sitting in the cab pulling levers all day. During this season ive been a mechanic,plumber,welder,trucker,estimator,carpenter,concrete man,landscaper,demo man,paver,landscaper,land clearer,engineer,bookkeeper,equipment recoverer,painter,and an operator. Those are just the things i can think of right now, but the point is don't limit yourself, do all you can yourself,don't get discouraged, and work your butt off. Trucking is also a big part of what I do in order to keep busy as well as get a bidding advantage on some of my competition who don't own trucks.
Hey GMC, what kind of hauling work are you finding for that single axle?
I do alot of stuff, where people need only a small amount of material, dumped in a back yard (topsoil, mulch) or someone wants some gravel in a hole in the driveway. But I have also done quite of few jobs for other contractors or myself need to move material around a site without making a mess or getting stuck. The truck can be easily loaded with a skidsteer or mini ex, which is what alot of guys have. I do alot of my major hauling with a tandem now, but the single axle got me started and gets used just as much.
Really great advice in this site! Thanks, Mark
Hi GMC 7210. I Googled starting a backhoe business and came to see this forum. I would really like to learn more about the business and get some advice on some things if you don't mind?
I don't mind Alabama,where do you want to start? The correct answer you see is that you are in [or might be] the ONLY biz in the world where you ''start'' at the top and work your way down.Paramount is having a damn good sense of humor,because you will be guaranteed some really nasty days.
I have been operating a backhoe for 20 to 25 years , the first 5 were hey go get the hoe or move it here or drive it down the cold road type stuff. There was a time when you could walk down the street and get more work than you could do in a month. Those days are long gone by far. If the economy is good and people are spending its a good business , diverse is good . We dig footers and pour them , water lines private and municipal , sewer lines private and municipal , onsite waste systems , cisterns storm shelters etc. You can't just set in the seat and pull levers. I tend to disagree that a mini ex and skidsteer is the way to go but that's my area. I know in close quarters the mini ex and skidsteer would be the way to go but if your in farm country , with some residential work a 580 size or 416 size machine is very versatile.
first learn what it is going to cost to be in business.... Insurance is a huge expense and that is one of many expenses that you will have go sell some work......you can always rent a hoe...or hire someone else to do the work........I have seen many a excavating company started by a great person....got all the equipment etc.....then couldn't keep it busy and soon was out of business.....great operators do not necessarily make good business people.....excavating work is a unforgiving business with lots to overcome
Very smart guy I must say
What it all boils down to in the end is ROI (return on investment). At one time it was over 5 years but now more like 2 years. If you paid cash for equipment and it took longer, lets say 7 years you are just borrowing money from yourself. That is a big investment and if all the figures don't add up to paying off for getting into business in about 2-1/2 years I would question if there was another way to make money. At one time, every year I had to come up with purchases for manufacturing including any construction type equipment and figuring the ROI was not an easy job. You have more control of everything as you are sales, purchasing agent, planner, and the sole decision maker. Maybe what's gone wrong is not the economy but a bunch of us guys are now buying our own backhoes and doing our own work! Willis Bushogin, you aren't anywhere near Laurel Spring are you? I need a septic put in and in NC they won't let me do it myself.
If you think you can make a go of it I would rent the equipment as somone else had said .If business is crapy then the iron sits in somone elses yard and your not stuck paying on a loan .And if it goes well then you can buy the equipment a little bit at a time .If we did not get contracts each year we sent equipment to auction .Some times jobs were not enough to bring in equipment , so we would job it out .It is not always about the equipment but what is specific to do the job.
Two big questions for the beginner; is there a market for a guy with limited equipment and experience? But, ok, let's say you rent in the beginning, the owner will probably move it for you (but, if you own it you have a whole different set of issues). To make it easier let's say you rent it. Now, if you actually get work and can get the equipment there on time with the right buckets, full of fuel and it doesn't leak - now, can you do the work? Seriously! Everyone on a jobsite will tell you they know how to operate a backhoe, but starting it up isn't operating it. It takes experience to know how to set-up and start a dig and where you'll finish it; to dig to grade or keep your trenches straight, clean and the right depth; how to jump ditches; work around others; not ruin others work; how to "feel" your work or recognize warning signs that problems are close; etc.. I could go on but the real question is, can you do the work? Sure, experience is slow coming but once you have it you are marketable, BUT, what will you tear up, ruin, or who will you **** off until you're competent? **** off enough subs and you may not be around long. Now, you did the job and you want paid. In California we have lien rights but you need to be a contractor if you charge over $500 labor AND materials, are you a contractor in your state? Anyway, you bill (invoice) your sub and if nothing goes wrong or is held up you MAY get paid in 30-60 days. Can you wait that long because sometimes it's even longer and your operating costs need paid, can you hold out? Now, as a contractor, you are self-employed and your pay won't have any withholdings, that's all up to you, are you responsible enough to save enough to pay your taxes. Ok, I'm not trying to scare anyone but all this and a lot more will make your business a lot larger than sitting in the seat of a piece of equipment. I only did commercial work and stayed away from residential. Today there isn't much commercial work out there. I retired but some of the best operators I know are having a tough time of it right now and it may not get better for a long time. Do what you're doing right now, ask questions. Go spot for an operator and see what's actually involved, it'll be boring but you'll learn a lot if you pay attention and ask questions. Good luck. Oh, I've got a semi and a 35 ton lowboy left if you really want to jump in, but you'll need a Class A license first, do you have one? Wait until you deal with that end of the business.
Well this is an old thread but I'll somewhat relate my experiences. I haven't really found enough work to make it profitable enough to quit my day job. I get some dumptrucking work here and there, but trucking just doesn't pay all that well for what it costs to do. Dumping of debris from jobs can be a royal pita too. Basically if it's not either dirt or organic separate, it is costly to get rid of and you may have to drive it a long way to do so. I have a single axle dump and an equipment trailer. I work with rented equipment. You really have to be on top of your game with logistics sometimes to coordinate getting materials, equipment, and if you have multiple things scheduled or a narrow window of time on a machine, you better be johnny on the spot with what you think it will take to complete a job or you're going to take a hit there. I have some decent things lined up this year but I think I'm going to be getting rid of the dump truck and trailer. It ties up too much money that I need elsewhere and it doesn't return much. All of the work I've done the machines could've been hauled on a gooseneck behind the pickup to do so I'm downsizing to that. Truthfully I'd much rather sit in the seat for somebody else, lol.
I hear ya Hokie
I've been at this for a while now , and to be honest there are times I'd throw in the towel. When it good , its hard to beat , when its bad it worries you to death. It would be nice to just operate and let someone else worry about expenses.