I have been pondering the idea of starting my own excavating business. I have been around equipment all of my life, but I started my career in 2005 with Department of Transportation. I started out flagging (which absolutely SUCKS),then got moved up to tandem dump truck running pay loader and other odd and end stuff, then started running excavator full time replacing culverts, putting in driveways, ditching and such. I worked for them for 4 yrs (raises stopped so I took off). I also have been working for a private contractor on the side for the past 7 yrs doing custom hauling ( with quads, quints, and road tractors with dump trailers), running excavators and dozers, doing demos, some grading, and just a little bit of everything (I have really learned a lot working with him). Currently I am working for a municipality running mini-ex, skid steer, backhoe, dozer, gradall and excavator. I have done a little bit of everything with them, catch basin rehab, retention pod clean outs, pipe installation projects (1 that sticks out 1500ft of 24in 2-14ft deep), replacing culverts under roads, new sewer pipe installation, stream and gabion basket projects. I think that this may some it up for you guys. Now I im going to be moving soon to WV where the oil and gas field work is jumping. I am going to work for a contactor there running a truck hauling to frack wells. When we get settled in some, I want to try to get my business (with in 2yrs) going. I know it isn't going to be great for the first few years. I know I am going to do some networking for sure. What I want to do is get my foot in the door with doing road maint for oilfield roads. Also clearing property, grade work, demo work, snow removal in winter or basically whatever or wherever the work is. Also my plan (we know how these go) is not buying anything new. I would like to buy a road tractor 9200 or 9900 International day cab somewhere around a 2000 model price range 20-30000$, midrange excavator 35-45000lbs machine around 30000$, and a tri-axle detach lowboy 15000$, and like a 670 JD motor grader around 20-25000$, and a steel dump trailer (so I can do any thing with it) for around 10,000$. The reasoning behind excavator and a grader is when building a road I can rough it in with the excavator and finish it out with the grader, and also doing snow removal in winter with grader. I know there will be jobs where I will need a dozer, which can be rented. I think that with a set up like this I could be as versital as possible. Im thinking my rates would be something like 100-115 for truck and dump trailer, around 140-150 for excavator, and around 130 for grader I know you also have to bid out jobs. This is just what I thinking seriously about doing, who know what will happen. Please tell me how far I have fallen off my ROCKER!!! :usa
Your prices seem low to me to buy some of the equipment. I would rather have a dozer and excavator than a grader. Think it would be more useable and marketable than a grader. Yes a grader is nice but the dozer would probably keep you working more in my opinion.
I want to buy older stuff so payments will not be as high during tight times!
Older stuff usually = lots of running repairs & $$$$. There is usually a good reason someone offloads older machinery. just a thought.
Yeah like Garrie says lots of $$$ to keep older stuff running and if you expect to keep good paying jobs those type of clients usually don't like to see equipment broken down on their job when things should be getting done.
Don't think that im hung up on older equipment, if the work is there (and looks like it going to hold up) I will buy descent equipment. The reason behind buying older stuff is that im not rich so I will be doing the best I can with what I have to work with.
Sounds like your on the rite track . As mentioned before I would forget the grader & buy the dozer , probably go with a machine in the 40 to 50,000 pound range . Rent the grader when needed .
There is a fine line between new enough equipment to not need major repairs and older, cheaper equipment that will require time and money to keep them running. The sweet spot, IMO, is buying newer used equipment with less than 2K hours. Enough hours for the machine to take a depreciation hit but new enough to not grenade itself until several thousand hours later. This conundrum is one of many being in an excavation/trucking business, one that is difficult to balance - work load, income and equipment cost.
And interesting setup, and i agree with the grader excavator combo for what you will be doing. In stead of buying a lowbed truck, I would just get a triaxle with a 20 ton tag. If money ever gets tight, just do hauling
Read over your first post, the thing that comes to my mind first and foremost is this, so don't take it the wrong way, just an observation of mine, you have experience with many machines, and doing a variety of jobs, but there's nothing in your post about managing anything, nothing business related, no banking experience, accounting, legal, dealing with lenders, renting property, dealings with city and municipalities with zoning for your business, nothing on permits needed or a couple dozen other things that are missing from you list. A lot of guys here will give you advice on what machines to buy, what hours to look for in those machines, payments verses repairs discussions and tons of other things, what your lacking is practical experience in running and managing a business and dealing with the public when money is owed to you, far different than doing the work and getting a paycheck. If I were you, I'd find a banker, lawyer, and someone in accounting, do a sit down with each and have a chat, all the questions you don't know to even ask, are the one's that your needing to know the most, you need a business plan first and foremost, a lender willing to back you, and will work with you unless you can bankroll the entire business for a couple years and don't need to finance or borrow any money, if this is the case, just bypass starting a business and head straight to retirement, just a joke to lighten the mood there sorry about that one. Next you need is legal advice, what you'll need to have for liability insurance for the type of work you plan on doing, contracts and work orders you'll need in order to collect what's owed to you in court if necessary, and a host of other things you'll get educated on as things go along, remember, your new and all the deadbeats will be the first to your door to get free work done and refuse to pay or offer you far less than your needing to operate profitably. And lastly with the legal system, what you need to know for liability issues with work your going to be doing in your state, and every state you plan on working. Another thing that comes to mind, is what type of customer your planning on going after, what business entity are you trying to scope into, if you say, whatever is needed, your done before you ever start, if you say I'll do it cheaper than your competition, you'll be broke in a year tops, you need someone who can do a sit down with you in the area your trying to get into, remember, just because you own the equipment doesn't mean anyone will call you, you need to go get the work, enough to keep you busy and profitable. There are groups out there to help you with this, SCORE is one of them, bankers will also help you out with others, mentors who have done the type of work your trying to go after. Every start up business has to take customers away from an established business, far harder than it sounds, and the toughest way to start ever. If I were you, I'd put the skids on your plan and do far more research, while having a job earning and saving money, and concentrate on the business end of what your about to do and spend many days and hours with bankers especially and lawyers they'd recommend and maybe if you can find someone about retirement age that owns a business your liking to get into, and maybe consider a buyout, business partner, buy in relationship to get you going. Another thing is this, if you can find the right person, who's in business now, who's thinking about selling or retiring, your entering a successful business and have someone who's been down the road your heading down, and can tell you all the things you don't even know you'll need to know. Just my two cents, toss it in the trash basket if you feel I'm full of sh*t, but start up business is the most risky there is out there, and have the least success rate of anything on earth, most try up to three start ups before ever making it, but lose big each time trying before they get the education from the school of hard knocks to know enough of what it takes to make it. Its been a few decades since I last saw the studies on business's success, but back when it was something like 80% failure rate in less than two years, and in five years, something like 90% plus failure rates and the dollars your talking about is enough to make it worth your while to do far more planning on the front end, than wishing on the back end, sorry to be so blunt, but someone along with way will be, you might as well hear it before your cash is at stake, along with your home, vehicle and livelihood, credit rating and borrowing ability in the future.
Randy88 You are right, I am lacking in the actual business end I have to say so far as bidding, and dealing with paying customers, I know that permits are required for jobs and locates are a must. I know you have to have insurance etc. I plan on talking to a lawyer about the actual business should be set up. But I would want to secure some work before money starts flying. It will be a while before all of this even starts to happen. The contractor that I work for acts like he would give his right arm for me to go to work for full time, so he could take care of business end of things and I do all the work. And also Im not going to be the guy who under bids everyone, then you end up working for nothing, better off to let everything sit in the yard then it don't cost anything. But when I do this I want to make sure that I go about it the right way so that it will be a success!!!
Randy I know there is more to than buying equipment and moving dirt, but thanks for the advice
Any idea how long this guy your going to work for has been in business? Before entertaining the idea of buying anything, work for the guy for a year or so, just on a wage basis to see if you two are even compatible, kinda like dating a girl, you don't just hop to the alter and get married before the first blind date even happens. It takes time to see how two people get along and think, then work your way up to and I'd never recommend anything like a partnership............ever for anyone, more like a LLC or something along those lines, and get this first hand. Everyone is willing to let you do all the work, every time for everything, that's not really a good thing, you've already got that experience, you need the hands on business end of the training. As for securing the work first, your backing into this backwards, you need everything business first and then go after the work, how can you price any job without first knowing your costs and what it takes to cover your butt both financially and legally. Your sound like a descent guy who's trying to go about it somewhat in the right direction, but your in major need of help and to slow down, don't worry, work will always be there, that never goes away, maybe at times it gets slower, but that's when you need to get creative, in almost five decades of being self employed, I've never run out of things to do, things that turn a buck is a different story altogether, but work never ends. As for being a success, others will determine that for you, you don't get to determine that for yourself and its decades down the road, right now you need to figure out how to hang on and survive, and in order to do that, you need help, start with bankers and lenders, before going in for loans, hunt for one willing to work with you in getting the help you need to manage and run a business, most will pawn you off and waste your time, so be patient in the search, also consider night school for business classes and accounting classes, its far cheaper to be taught this when your paying upfront with a tuition fee rather than with tens of thousands of dollars of your money at stake and a lender not waiting patiently to get paid and your equipment on the brink of being repossessed. If there are people who have run their own business's in your area who donate their time to mentor younger people trying to get started, bankers will know about them, same for lawyers, ask around to see if they are putting on class's for those thinking about getting into business and have question and answer sessions, usually at night. My state put on many decades ago, just such classes for anyone wanting to own and operate a business to attend, they were for the most part, excellent places to go to learn about all the questions you never knew about to even ask, speakers were bankers and lawyers and people who'd done everything wrong and also those that did things right and had enough planning and help beforehand to make it work. I personally loved the class's and wish they'd have had dozens more just like it for me to attend, that's by the way where I found my first banker to do business with, he gave me a one on one advice any time of the day or night, and he wasn't the banker that sent me to the classes either, but one who was lecturing at the classes who was the most help. They explain things like margins to operate on, how to set up the business in the first place, what legal things to have to protect yourself, how much insurance you need for coverage and how much is too much and what types you'll need, how to get and actually do sales tax, how to prepare for income tax and audits and what they mean to you and your business, how much cash you need on hand before ever starting a business, how much you'll need to borrow and what loans can be gotten at low interest loans for start up purpose's, who will back them and cosign them for you, way back when, my state would offset this somewhat if I attended these class's, which is a no brainer, attend free class's and get a low interest beginning business loan. They had people to call when you encountered a problem, like not being able to collect a bill owed to you, and the help was free if you attended these class's and the list was endless for those things I never knew I needed to know type thing. Had I jumped into business without this information, I wouldn't be in business today, and without some help, rather a lot of help from the right people I'm not sure many if any can make it in today's world unless your taking over a business you've been involved in for decades, not as just an employee, but working your way into the management end and the right person who's willing to teach you the business end of things. As for just leaving your equipment sit idle in your yard so it won't cost you money, your totally wrong on that one, anything sitting doing nothing costs you big time in lost income. I'd go as far as to tell you this much, change careers somewhat, if you know how to run the stuff, been doing the work, hunt up a job in an office anywhere doing the dull, mundane things like bookwork, billings, contacting suppliers, payroll, dealing with insurance issues, doing locates, being a foreman, layout person. You've done just one entity of business, there are dozens more to learn and do as an owner, why not start doing those as an employee where you get paid to learn them????? Get a behind the scene's view when its not your cash on the line and you can walk away and hunt up another job at little or no cost to you??? I don't mean to sound like I'm talking you out of being in business, I'm just tossing out ways and things to learn "before" your forced to learn them, and believe me you will learn them one way or another, even if you fail, set yourself up first to at least be aware of this stuff you'll need to know.
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One of the most inspiring examples I have come across is over on `lawn site` by a fellow up in Massachusetts named Andrew…You might just read his site, and I am sure he would respond to this situation Tony