I am considering starting a new demolition / land clearing business. I am thinking of small project type work to begin with and need some advice on the industries current condition as I have been working overseas for the past 3 years and I am completely out of touch. The equipment that I am thinking of purchasing are as follows; Komatsu 200PC Excavator any reviews?? Good bad or indifferent Mack 10 yard Dump Late 80's early 90's Mack Semi day hauler late 80's early 90's Fruehauf Dump Trailer I have about $80K to start the business and I am only just now starting with my research so any advice is more than welcome.
I forgot to list my location it will be in the Houston Texas area.
Don't know how the prices are in your area but demo work around here goes really cheap. I'm talking $5,000 for a 2,000 sqf home and dump fees are $70 a ton. Now land clearing you can make a pretty penny if you can get it done. We are talking about 4 to 5 thousand a acrea. It's just that the big outfits eat up this work and it's kinda hard to break into this market.
buckfever Thanks for the information I am not sure of the rates in my area either. On land clearing several years back I got a quote to clear 7 acers and it was only $400.00 to $700.00 per acer and they got all of the timber. once again thanks for the info.
That's about right if there is good timber on the acreage. As far as breaking into the business, do you research first before stepping out. I know Houston and Texas in general is doing much better than most of the rest of the Country. Find out what the most recent demo projects went for. You won't be able to find out what the private jobs went for unless you know the parties involved but municipal bids are public knowledge. That's where I would start in order to get a baseline for what demo is going for in your area. If you have $80K set aside to start the business I wouldn't spend anymore than $60K on equipment and keep $20K in working capital. Working capital is now more than ever, the lifeblood of a successful company. It will be hard to get credit with a start up company in this economy and you will need the cash to pay for expenses as you go. You will need capital to pay insurance payments, repair bills, fuel, labor, etc. What I am seeing in my area is there are very few small to mid sized companies left that can meet the insurance and other contract requirements for projects. This is obviously due to the crappy construction market and slim profit margins. Guys around here have been giving away work for so long that it finally caught up with them. I see this as an opportunity in rather bleak local market.:cool2 Best of Luck! And oh yeah, Welcome to the Forums!:drinkup
Thanks CM1995 you say that I can find municipal bids any ideas on where. I have done a lot of searching but all that I could find were open for bid and there was only 1. I will take your advice on holding back 20K a I had only planned to hold back 10K. I am still a probably a year away as I want to have all of my equipment paid for before I fully break out. I have land of my own that I can clear and get familuar with what ever excavator I end up buying. Another thought I had was storm chasing and developing a relationship with some of the insurance companies. I will definatly be doing more research on other state policies as far as permits and business license.
Did you ever start your demolition business? How is it going? What types of buildings have you wrecked so far? What equipment are you using? Tell us how it is going, and post any pictures if you have any.