This is my first post so hopefully it's in the right place. I wanted to create a specific thread for individuals to post the hourly rates they are charging per machine trackhoe, backhoe, skidloader, roller, trackloader ect.. If you would please include with the hourly rate for each machine the area of the country your located. Thanks
south fl is kind of low when it come to hourly rates from what I have seen small skid steer 55 hour CTL 65 to 70 CTL w/fecon 100 to 125 hour backhoe 65-70 hour mini ex 65 hr 13 ton ex 105 hour 24 ton ex 135 hour 8 hr min 950 loader 100 per hour dozer d6 sized 100-150 hour all equipment has a 4 hr min plus 2 hr mobilization except larger excavators that they have 8 hr min generally and most people charge the transport cost to the bill this is why I focus on more utility projects than working by the hour because down here people are running equipment like backhoes for 50 an hour
Here in AZ metro area we ar 110 for a backhoe Ok man with the plan you asked give your answer if you want the rest of my rates what are you up to
I am a heavy equipment operator for a smaller excavating company. I do not have my own company and thus do not have any hourly rates to post. I would like to possibility start my own company in the next 5-7 years. And was just curious what companies are charging for hourly rates.
Well as is a hot market right now I can get 160 for a 314 excavator and about 135ish for a 3 yard loader hammering is quite a bit more I get 210 an hour for 1100lbs hammer If your going to compare rates to other outfits to figure out what to charge you will find it hard to make money
I had a guy tell me this the other day ...." I get $75. 00 an hour for that small dozer.............Cat gets $150.00 an hour to fix it. I'm on the wrong end of the math equation."
Man with a Plan welcome to the Forums! You're going to need to let us know what part of the country you are located in and plan on starting a business. There is a big, big difference in cost of living which ultimately drives equipment rates across the country. Somebody might get $200 an hour for a 320 in New York and I may get $145 for a 320 in AL but at the end of the day I have more money left over as my costs are lower. What you charge is not as important as what the machine costs you.. I'm like Monster, we do very little hourly work as it's hard to make money by the hour. Contract work either negotiated or hard bid is more profitable for us. Contract work allows you to make money on materials, labor and the equipment.
Cm makes a great point he also runs big iron we do a lot of small iron small jobs I do better by the hour
I am completely aware that a each business owner needs to figure out his own hourly rates based on ownership costs and other factors. By asking the question I was mainly interested in seeing the hourly rate difference from region to region. More for the fun of it than anything else.
What region of the country are you in and what are the rates your company charges?
I'm in pa. As far as the rates my employer charges, I really am not given any of that type of information. Although, I would find it interesting to know.
I am $100 for a large frame CTL. $90 an hour for large frame wheeled skid steer, $110 an hour for 6 ton mini ex, $150 an hour for 160 sized track hoe, $80 an hour for 4 axle Mack, $85 an hour for double drum roller, $110 an hour for 590 N back hoe. I have min. and transport costs, pricing depends on the equipment being moved.
Folks, I'd be a bit careful in discussing rates online. While I totally believe that no one on here is "fixing bids or engaging in other anticompetitive activity," when DOJ gets involved in bringing criminal charges, they often paint with a broad brush. The Sherman Act prohibits any agreement among competitors to fix prices , rig bids, or engage in other anticompetitive activity. Criminal prosecution of Sherman Act violations is the responsibility of the Antitrust Division of the United States Department of Justice.
I seriously doubt discussing hourly equipment rates from anonymous owners across the United States constitutes a violation under the Sherman Act.
Your choice, Sir.
Irregardless of whether we are price fixing I would laugh at the prosecutor that could tell me how I compete in any of these places outside my locality Doesn't the Sherman act involve some kind of quid pro quo
Wasn't Sherman the real smart dog in a cartoon?
What I have noted of contractors I repaired machines for is they always have a minimum hours, as well most start the hours as soon as a driver to deliver the machine starts the day and does not stop unless machine stops working(Weather, weekends off, holidays off, Emergencies) until return trip which is also charged in the total.
Talking about rates in different places is not the same as price fixing. Price fixing I would think is done in private not openly discussed on a forum. Generally you need to be in the ballpark with your competitors but established firms with proven performance or that specialize in certain applications can charge more.
I'm worried they may be coming after me- just for reading this thread. I'm sure glad I didn't post my hourly rates. Now I can't be accused of colluding with 5 other guys on the internet, of controlling the dirt moving and equipment rates across the entire country. Someone would actually have to call my office to know what I charge. Can they arrest me for just thinking about fixing prices? Now I wished I didn't post at all. If I delete it now, is that still criminal- because I committed the crime, then tried to cover up the event? Now I could be up for obstruction of justice and concealing evidence too . Some days it doesn't pay to get out of bed.
Now you got me curious if only suckers are in the dirt business crane work seems like a good gentleman's job always clean no ground engaging tools to repair it's not like there are a lot of moving parts on a crane to fix the machine should never wear out
This forum is free. Now I'm worried, is that considered price fixing?
You guys CRACK Me UP!!!
And here I was thinking I needed to get in the rock breaking game. Sit in a cab with only two sticks. To move you just pick up the bucket and stabilizers and drive ahead. No more throwing wood and mats. Charge enough that I can have new backhoes every two years and warranty on them, instead of my "new" stuff being 20 years old. Machines are only $100,000 instead of 1.5 million. Working all of 12' away right in front of your feet where you can see it all. Bid the work high and then work like a madman, and make some real $$$ instead of only charging by the hour. Get to sell/ add on some profit to every load of rock / gravel/ and dirt that leaves or comes to the jobsite. Even better, charge to remove material from one site, and charge someone else to deliver the same material to their site. WIN WIN. I'm backhoe shopping in all my spare time.
In other news, my rates just went up. I'm now $3,500/ hour. IF everyone else's expenses have gone up like mine due to the covid and the rioting, I'm guessing that we all need a rate increase like this. I'm not saying that everyone needs to agree what new rates need to be, but I'm sure that everyone sees my point that we are in uncharted territory and something must be done.
You need to skip the backhoe and go to an 80K LB hoe and hammer in order to get into the real money. Hammers hardly ever break down and there is not a lot of maintenance involved either. It's pretty much a license to steal. BTW - Who's selling new backhoes with a hammer for $100K? I'll take one.
See- I knew someone would understand. I mean- you dirt working guys- your bucket or hammer is actually ATTACHED to the end of the boom of the machine. With pins. Not on the end of a 200' string. How can you go wrong?
I dis agree hammers always break down that's how I justify my 300 grand service pickup True tho hammers make some good money when they are well handed but you put a cowboy on them and you will have a boat anchor in 15 minutes And also 80k lbs are for suckers I should get my 750 lbs hammer out again on the regular that thing made more money than any hammer I have ever owned it wont break any rock but man it sounds like it's doing something as long as the customer thinks I am raping them to begin with I might as well not make him a liar lol Now if i could figure out how to get paid for all of everybody else's stuff i have to move on a job i would make some money
The last hammer I rented cost me $4k to replace the broken bit. Sunbelt sells an additional insurance policy for the hammer for damage. When I rent from them i always take it. My personal 1k lb hammer is waiting in line for repair now. $2k in parts and probably the same in labor. But I still use them.
Good point! I do have my eye on a 2021 F350 Platinum Tremor 6.7...
in socal we're lucky to have a few different operated rental companies. 120 for a skip loader 135 for a backhoe 225 for a 350 class excavator 250 for a blade mob fees and minimum hours apply, extras like hammers and rollers and GPS are extra. and those rates get much much higher if its on a prevailing wage job.
This is an important thread. We need to discuss our bobcat rates. Publicly. Period. The latter is public knowledge, it has to be. The nonsense about Sherman act above staying that collusion to fix prices in public is total nonsense, it has to be a secretive effort to price-fix. Companies have to advertise their rates publicly to even get business. Some offer by-the-job only but I find hourly rates are the most typical and everybody has an hourly rate. Mine is a one-man-band bobcat business offering freelance bobcat work in the Atlanta area. I charge $100 an hour (in 2024). I used to run a mid-excavator for $950 a day. It was non-profitable so I parked it. Residential customers are way cheap and their jobs are discretionary work, it is not required work. They will spend no more than a thousand or so for a rather large job because that's all they have. I graded almost 2 acres yesterday and the day before, for example, and made $1300 total for two days bobcat work. That's typical. Maybe a bit low, I shoot for $800 a day usually. One can do a survey on FB marketplace asking their competition what they charge of an hour of basic bobcat work, not forestry mulching which is a lot more, just basic bucket & grapple jobs. I got concerned when I saw a bunch of shysters on YouTube saying they break $200k a year doing freelance bobcat work. So I surveyed a bunch of local bobcat owner operators on Facebook and all of them, all of them, said they charge around $100 per hour; a few said $125/hr and a few said by-the-job quotes only. I looked up where one of the video shysters works and his competition advertises about $100 an hour on FB marketplace too. You cannot make $100k let alone $200k at an hourly rate of $100 an hour, and it's not hard to prove. I make about $50k BEFORE paying for my diesel fuel and some other costs, this is not a get rich scheme. Personally I run a basic CTL for $100 an hour. I am a bit low on purpose because I do not want to be underbid by immigrants. I also own my own gear and drive a 30 year old dump truck. I have almost no financing and no job insurance either. If someone ask for proof of insurance I tell them the deductible is $5000 and that ends it usually.
Appreciate the honesty. More knowledge is power. This discussion is absolutely not in violation of any collusion act. I run a woodmizer sawmill in the Asheville, NC area. I charge $110/hr for just me and the sawmill; doesn't matter if I'm sawing portable or at my location. There's arguments to be made that portable jobs should be more expensive (time for preparing the mill for travel, tools, etc), but also I don't have to deal with the scraps and waste of sawmilling so I consider that it balances out. I also rent out mini excavators and a tractor backhoe. Kubota L48 goes for $275/day, 8000lbs mini x $275/day, 11000lbs mini x $350/day. I've thought about adding dirt work jobs to my resume, but I lack time enough with just those two jobs.
You rent your equipment out to anyone or just people you know? Assuming this is bare equipment with no operator at those rates.
I rent it out to the public. Yes this in just the machine, no operator.
on the subject of hourly rates, im curious what every one is charging/ paying hourly for shop/mobile repair. the average around here is seems to be around $130+ for shop and $150+ for field with rates increasing regularly
Depends if we call an independent or have to call the dealer out for something. We're south east of GR, lots of options. One truck repair place we use is $150/hr shop rate. Another heavy truck repair facility is $100/hr shop rate. They came highly recommended so we sent a couple jobs their way to try them out. I don't have the heavy equipment shop rates handy, but I know it's about a 30% savings if we can send it to the local independent.
I haven't checked others rates lately. I was in Cummins here recently and they have a sign posted near the service desk.............rates were $228 an hour. I'm doing field work at $160 an hour here.
Reading this makes me want to just pack my ***** up and just go home. I need a to find a way to market myself, I suck at it, but I sure know how to turn a wrench, strike a weld or operate machinery. Only $30 an hour here where I'm at and can't say cause I use their tools when half of them are missing and I have to drag mine in some days. I got more tools than the clowns I do contract work for.
My god if I had to pay someone to fix my equipment I would go out of business in a month. I spin my own wrenches and invest as much as I can into tools. There's tons of DIY videos on Youtube these days, it's great, everything from welding to specific machine videos. In the old days there was almost nothing- you would get a Chilton manual from the library sometimes. On the matter of repairs and who does them, I cannot even afford a repair building to work in. I work on the side of the street. I have an old uhaul truck loaded up with mechanics tools: gasoline-powered welder, drill press, gasoline-powered air compressor, plasma cutter, battery powered hand tools, just a ton of stuff. I have often wondered how guys afford stealership work. I suspect a lot of them lease new equipment at high monthly cost to avoid repairs. I started wrenching in my teens because we had nothing. I always dealt with machinery, cars, trucks, motorcycles, mowers and so forth and I learned to be fearless about digging in. I have dropped entire transmissions on the side of the street before. Am I awesome? No, it was just about getting by.
Same here, I do my own work out of necessity. A few times I've had to hire something done, like line boring. I always try to find a small independent place when I need to.
Spud---It's the trouble with a thread like this. All depends on your location. There is nobody around here getting 160 an hour as a independent. Reminds me of chickens---one sees a kernel of grain and starts scratching around the rest run to that spot.
I get you guys that can do the repairs on your own. But let me clarify why I charge what I do. $160 and hour isn't near what I actually make......its not a 100% profit. I have insurance (truck and liability costs), fuel, supplies and truck repair and maintenance. I also have to procure the parts I need, sometimes arrange shipping, and most of the time I have to pick up my own parts. I spend a lot of time at home doing parts searches and creating lists, emailing, and studying schematics. I can sometimes be on the phone with a parts guy for quite a while before he can figure out what the hell I need. It's not all wine and roses. If the above costs of business is say...50%, I'm working for $75 an hour. By the time I get screwed by the IRS, I've lost 30% of that. Also, being self-employed (which the government hates) I also pay an additional 14% for a stupid self-employment tax. Out of everything, I net maybe $45 if I'm lucky. Any major truck repair or a redo can put me in a hole where I lose money. It took me years to learn how to play this game. To be very profitable in this business, you have to do the job right, troubleshoot things correctly, and leave the customer happy with the results. Repairs also have to be in a reasonable time frame for the work needed.
Charging by the hour for heavy equipment is a race to the bottom IMO. I bid every single job, turn key price, and stick to my price unless there is a change in the scope of work (I do have clauses for impenetrable rock, etc). I'm taking more risk but I also usually make far above the hourly rates of the guys on FB. The customer is happy because they know upfront what it will cost. I'm often near the top of the price scale for our area, but offer premium quality work and get it done fast. Customers seem more than willing to pay for that. There are and always have been plenty of guys with an old backhoe, dozer, bobcat, tractor, whatever basically working for beer money. They are not my competition, I honestly don't know or care what they make.
Very good write up. However you forgot to include insurance cost's. Liability & health insurances. These are expensive to say the least.
My bad, it's $30 an hour before taxes and everything else for me.
Correct----All overhead must be penciled into price. But around here and else where there is always the factor of CASH, never reported. Allot of work is on the barrel head, did I say that oh my the IRS cyber cops will be on the prowl. I figure everyone of my engines I build for spec sales @ 50.00 an hour after all the shipping costs, gas, sales tax {Wa}. And everyone is sold with the buyer handing me a bad of frog hides. Price markup on parts is small because like anything else there is a area of total price that has to be kept within reason. Where I make out is my overhead is real low. I have the run of the old company shop for free. I pay no rent, no power, no sewer, no nothing. Otherwise I wouldn't bother with what I'm doing. * Correct--you have to do the job right. I cut no corners, every block, all heads, rods, valve train & crankshaft is machined. All tolerances are within spec, every thread bore is chased. I leave no stone unturned. People ask how I can do it and not worry, Well it's about going the extra steps to make sure when it leaves it's top notch. Some I make a little more than other engines some I don't that's just way it is.
I wonder how they'd feel if Vetech upped his rate? He should should charging extra just for the aggravation he has to put up with. A lot of places just like to have a set price so they can budget for it. I did snow removal and landscaping by the hour most of the time but sometimes customers would want a quote for everything. For hourly work I'd give a pretty close estimate of how many hours it would take. Especially with snow removal I couldn't believe how many companies just paid a monthly fee whether it snowed or not. Apparently it's easier to budget for but usually costs a lot more in the long run. For some companies the money comes from head office in another province so it's easier to just pay $1000-$1500/month for snow removal or landscaping regardless if any work is required. I was more you get what you pay for and customers liked that. That was back in the 90's. I'm not sure how I'd charge if it was doing now, probably by the job. I think customers would be shocked at hourly rates and travel time charges. Not that they wouldn't be at a set price but then you can explain everything required to do the job if you have to. Residential customers often have no idea about the amount of work required to get what they want and it takes some experience to do it in a timely manner.
Question for the wrenches - Do you place a mark up on parts you purchase on your account?
Absolutely--but not enough to cause issues.
The shop that did my engine charged extra if they had to get certain parts delivered from Finning even though they had an account with finning and got parts nearly everyday. It was on top of the normal mark up. I could have saved a little if I picked it up myself. It wasn't worth the trouble but still seemed odd it was only for certain parts.
Yes I do and it is a percentage over my cost. I can’t tie up my own money for 30 days plus and not make anything off of it. In a lot of cases, my cost is cheaper than what the customer pays at the distributorship. Once I add my part, it may approach 10% over their cost. Keep in mind that my products insurance coverage will NOT cover a part failure supplied by anyone else than me.
I wouldn’t get out of bed for that but our situations are different. If I wasn’t paying everyone else (insurance and government) I could live pretty well on 50 an hour.
What do you figure or the cost each month operating a service truck?
Its hard to imagine the extra cost of every thing . You can't figure it out unless you are handling the money .
Good - you should. I put a 10% MU on all materials I bid on a job. 90% of the time that 10% flows straight to the bottom line however 10% of the time that money is used to fill in the gaps on an item missed in the bid or something we damage before install. Regardless materials or parts are a revenue stream that should be utilized in any business model. On an average $250K project we bid there may be $50-60K or more in materials so the 10% MU is a key piece of profit. When a project has a large underground detention system that is a package deal, I'll usually adjust the MU % down to 5-7% depending on how competitive we need to be because those systems come with everything you need to install it. These systems are expensive with some well over $100K just for the materials so 5% is a fair MU and might win the job if the competition puts 10% on it.
Repair shops charge for shop supplies. Sometimes it's outrageous because it was charged as a percentage of the entire work order rather than just supplies that were used. In the past they weren't listed seperate. Contractors adding 10%-20% or so markup on supplies seems appropriate to cover all the little extras required for the job. Customers would freak out if all the extra little things were added as line items on the invoice.
It's actually really nice to see this thread pop back up, I remember reading it when it first came out before I was even a member and just stalking these pages religiously. I think alot of the hourly rates that people have been using as a rule of thumb are just too outdated to apply today with the unprecedented inflation and rise of used/new iron and parts prices. For example in ny area (upstate NY) 120/hr is about going rate for a tri axle dump truck, and that was fine and dandy about 4 years ago when parts, maintenance and basic operating costs were anywhere from 10-40% lower, today not so much. 3-4 years ago guys were getting about $1000/day for CTL or small dozer work as well, today that's not really a sustainable rate. I think the best way to combat this stuff is to know what YOU need to get hourly out of all your equipment and to hide that into a flat rate bid for the job. For some reason it's always more palatable to have a set price even if you have that truck getting 150/hr in the flat bid, then to tell the customer it's gonna be 130/hr and it MAY take this long. For example I just did a quick job locally, It involved moving my 450 sized deere dozer to the job, pushing up an area of stone that had filled in a hole and using the stone to make more parking area, then dumping a load of my screened dirt and grading it out over the area and making sure the area was cut to drain towards the ditch by the road and keep the area from getting wet again. Job was 20 min away. I price equipment moving at 150/hr, 2 hour minimum so there's 300 on the bid. I get 25/yd screened dirt, 15 yards in the tri axle, there's 375. 150/hr for trucking, 1 hr assumed to move/load dirt, theres 150 on top, we're at $825. Dozer work I priced at 150/hr because even a small 450 has an expensive undercarrige, 1.5 hrs assumed, 225 on top, we're at $1050. I bid it at $1100 and assumed it would take 4.5 hours just to provide margin of error. Did the job, it took 3.75 hours all in from loading the dozer to back home and completed, I made my $1100 and the customer was ecstatic because I stuck to the price, got it done and we didn't have to get more dirt and go over budget. Had I bid each part hourly I guarantee you they would not have taken it even though it would have actually cost them LESS if we stuck to the clock, it just sounds scarier.
This. Exactly the reason we do little to no hourly work. We have unit prices in our contracts that kick in for extras outside of contracted work. Unit prices include things like rock excavation and spoils haul off, both priced by the CY.
I did a bunch of commercial work for a really good contractor. I charged by the hour and was always paid promptly and never any issues. Even when a 2nd crane had to come the next day, because I got delayed when a crane was already on site setting roof top air conditioners, to lower my machine in a church basement. Best customer I ever had. A farmer friend worked for him and told him I did skid steer work. It was more like doing a project with good friends than an actual job. Unfortunately there's very few customers like that.
Small (3-4m) dirt work contractor. Rates as follows by the hour or when figureing bids. Our work is about 50-50. D4K2 $200.00 hr D6R $350.00 hr 304C CR / 305.5E2 CR $125.00 hr 308E2 CR $200.00 hr 313 $275.00 hr TL1055 $200.00 hr 289D3 $125.00 hr 299D3 XHP $150.00 hr CTL 1000 lb hammer $250.00 a day or $100.00 an hr CTL & FAE mulcher or Shulte landscale rake $300.00 hr ASV PT30 or RT40 $100.00 hr Hydrema 912HM artic truck $200.00 hr Tandem axle 60 foot boom truck $350.00 hr with operator and ground man Vermeer chipper with 2 ground men $150.00 per hr Single axle dump truck $110.00 hr Triaxle dump $150.00 hr ground work $50.00 per hour/ $65.00 per hour 0n bid jobs All equipment has 650.00 mob each way trucks are portal; to portal
About 3/4 of our work is hard bid we seem to get a lot of extras on ticket work mainly cause we are willing to do bs work But at any rate I have some service work customers that really fill the gaps of our big work and if it's a backhoe or smaller it's 145 an hr I don't really have different rates for different machines and the big iron I really work hard to not do anything hourly Dealership service is well above 200 an hr shop or field and the good independent guys are so busy they take 2 weeks to get here so we do a lot ourselves In today's market I don't see a buissness being profitable at less than 125 an hour mainly because overhead of new iron or even 5 year old iron is to expensive insurance is a real pain to it eats the bottom line pretty fast in my line of cost I pay myself and the profit margin comes after wage it was that way as an owner op and it has to be that way with employees
No insurance I just tell them the deductible is $5k what's the point if I am not going to hit anything worth that much. I just raised my hourly rate on the bobcat to $125. I keep getting people who like the old rate ($100) but then want to nickel even that down, which tells me it was so low people are getting greedy. One joker had me working all day for $300. I told him have a nice day its $800 and that was before price rise. People are Cheeeep
Small kubota rtv engine diagnosis for a buddy. He took it to a small shop and they said needs a new engine, not worth fixing. Buddy couldnt explain any details of work done, not sure what was paid. He took it to them running rough and got it back not running. hauled it to me for a second opinion. I've put about 6-8 hours tinkering with it and about that much time researching the service manual and HEF etc. Compression test finds a weak cylinder. Same cylinder has no fuel at fuel injector. Remove and take injection pump apart to find a broken spring. Put it back together with a random spring from parts bin to see if the engine will run again. It does so I think fixing the pump will fix the billowing smoke problem the engine had. Remove cylinder head to investigate the low compression and chronic overheating issue. Cracked head. I think new head will fix overheating problem. Check piston deck height. Bad piston is about 1.5mm lower than the other two. How long would this take a trained mechanic to accomplish and what would a typical shop bill be?
yeah, I have people stop and ask if I'll use my mini to put in their culverts or dig a ditch for... this or that. No interest. I bought this gear for my wife and I. that's it. I'm cheap too.. so dang cheap I'll own my own equipment before hiring it out unless that job is ... too big. happens! But the typical operator inclusive equipment around here is breaking $200+/hr, so, it doesn't take long to pay of having your own gear.
$200 an hour for what?
well there's two different guys I'm thinking of. One owns a D6 sized dozer, a 20klb bobcat mini, one of the big bobcat skidsteers, a truck/trailer, dump, perhaps something else like a grader or similar. The other guy just rents his gear. The first guy charges $200/hr for the skidsteer and moves up from there for any of the other gear. The second guy charges $75/hr for his operating skills over the cost of the rental. On some of those rigs, that gets right up in the $200's pretty easily. First guy has tried to hire me to operate his gear as an employee twice. I'm already gainfully employed and don't need it. We are in a boom here just like a lot of the places around the country, so I guess when it falls... boy will it. As they say, make hay while the sun shines, and these guys are doing just that. keep in mind, this is in Glacier Country - everything has a scenery tax, and it's a big one! Nothing is cheap here anymore. as to BIG gear, I have no idea the going rates...
Like along the lake golf course, Big Fork.
$200/hr is a regular rate for HE work around here. Most Repair garages are charging $150-220/hour these days.
$200 an hour for a Bobcat 753 or $200 for a Cat D6? Lot's of variables.
Anything sized to move real dirt. 953, 955, 755, median Sized Excavators in the 20-26t classes, bigger is more money, bobcat is considered special purpose, sets in similar expense range.
Sounds right for that iron here as well. Not a 955 but a 953/963 and 20-25 ton hoe.
Here even a derelict 955 K/L or 755 Deere demand such prices. Mainly for operator experience and time on machines. Landscapers are primary for skid steer and mini ex work, excavation contractors have them for special needs and purpose but same operators as 25t or 953/963 run them. Higher maintenance, shorter lives, still expensive machines.
No way I'd pay $200 an hour for a 955 with operator, no matter how good the operator.
Never thought would see garage labor rate at $240/hour here either cm
Got into skid steer-type forestry mulching here in north Georgia last year, bought a high flow skid steer, mulcher head, flatbed hauler and a heavy trailer. I surfed around mainly on facebook marketplace to see what local mulcher guys are asking and the average I got was $175 an hour. I hung out a shingle at that price and also stated a per acre rate of $1750 on my web page in case anyone ever wanted a by the acre option. There was some demand at $175/hr and I got quite a few homeowner jobs last fall. Then in December the phone went dead. Winter doldrums had arrived. Desperate, I cut my hourly rate to just $100 an hour. Immediately got a few jobs at an operating loss. If winters are this slow its going to mean higher summer rates to compensate. Its very hard to motivate yourself to work knowing you are losing money, but such is desperate times. I scheduled several homeowners at this rate. I saw a statistic that 65% or two thirds of all Americans live paycheck to paycheck. None of those could possibly be your customers if they are that broke. That leaves a third who maybe have some money to spend, but it appears even they will quit on you come winter. Homeowners is where I have found the most interest over the years in north GA. If anyone wants to share experiences or hardships in the skid steer mulching segment feel free.
Can you make money at $175 per hour running a mulching head? We don't do much hourly work but if we are doing T&M I charge out a 279D with tooth bucket at $135 per hour and it's not a money maker. Figured the North GA market would be hustling.
No, unless equipment, mechanics and fuel is really cheap in Georgia. I don't know anything about Georgia, but I would think it's going to take longer than half a year to get a skid steer mulching setup fully self sufficient, unless there is a really aggressive advertising program going on. I can't imagine doing anything on an hourly rate for homeowners is ever going to even break even.
(CM1195) no matter what you charge its obviously your operating costs that determine whether you make money or not. I live rent free and do not even have a repair shop just a box truck with tools in it. no employees, I own older machinery (3-15 years) do my own wrenching and operating. the local market will pay $170 an hour for mulching in summer for sure but definitely will not pay it all winter. (Acoals) "No, unless equipment, mechanics and fuel is really cheap in Georgia." Fuel is pretty cheap off road diesel 2.60/gallon, but the other stuff is about the same and I spin my own wrenches so not much cost there just tools. $170 an hour is what you will arrive at if you ask a lot of guys on facebook what they charge and average it. I also got that much last summer. I am unsure how much more if any I could ask but at least that much is viable here. "I don't know anything about Georgia, but I would think it's going to take longer than half a year to get a skid steer mulching setup fully self sufficient, unless there is a really aggressive advertising program going on." agree. I do not have a big advertising budget it's a lot of free facebook ads, local bandit signs, cards and a website. I am pretty sure I am reaching some of the market bust definitely not all of it. for example I am not reaching any commercial accounts just local homeowners. "I can't imagine doing anything on an hourly rate for homeowners is ever going to even break even" you may be right as this is an experiment. I am really just trying to stay in the black so I can stay close to family I am not looking to get rich running a mulching head in somebody's back yard lol
I would never start up a machine to lose money. If people are seeing you do jobs at 100 an hour, they won’t be good word of mouth referrals at 175 later. As much as i might need to keep working, it’s the wear and tear that makes me keep a machine parked. You can expect a 3 to 5 year investment, to get most type of start ups going. Thats with the full monty, web page, FB Tick Tok, even CL, some advertising. Get out the business cards, drive to sites and give them to contractors, even operators. I have seen people make the mistake of working too cheap, when times are slow, it doesn’t work out well.
(HarleyHappy) good advice for sure. I see a temporary rate cut as short term action to acheive monthly bank notes on the equipment, a sale sort of thing. I will make it abundantly clear to customers that I am operating at a loss as a winter quick sale & regular rate is $175.
I would highly suggest not mentioning anything to the effect that you're operating at a loss currently. You can definitely say you are offering this rate over the winter because of lower demand, but you need to stop right there. Anything more is going to send the wrong message, you don't want to allow any impression that you are struggling to your customers. Period. They will start looking somewhere else, assuming that you will be gone in a year.
I agree you could have a winter rate but base it at a minimum of at least 3 hours to get a 40+% discount. Otherwise it's not worth loading the machine on the trailer. If you're losing money there's no way it can help pay the bills. It will make your finances worse, especially if you need to do any repairs or maintenance on your equipment. If customers realize you gave other customers a $75/hr. discount there's no way they will be willing to pay your standard rate. They will haggle you down and you won't get work unless you lower your rate. I think a winter rate like 20% off ($140/hr.) would be more reasonable. I'd advertise a 20% or whatever % discount and not mention an hourly rate. Once a potential customer calls then you can get into details and say what your winter rate is based on how much work they need done. You might want to charge by the job instead and maybe make a little more. Back when I did skid steer work in the 90's I was worried I might charge too much and not get work. My dad told me if people don't want to pay $40/hr. they won't want to pay $35/hr. either. You might as well charge the going rate. He also said not to worry about the jobs you don't get. Worry about the jobs you do get. You also don't want to get a bad reputation for undercutting your competition by a large amount. Your name will get smeared in a hurry. Good customers realize it costs money to get what they need done. If the customer owns or runs a business they will realize you need to make a profit too. I got a bunch of work clearing snow by dropping notices in businesses mailboxes or going in and introducing myself. The worst they can do is say no. You could also go to the post office and do a community mailer to rural area's advertising your services. It's not too expensive and gets your name out there. I would think mulching would mostly be on acreages and farms. Much easier to target potential customers in rural area's. Putting flyers up in farm stores, gas stations and hardware stores would also help get your name out there. It generally takes at least 3 years for a business to make a profit so keep that in mind.
I would have thought winter would be your busy season when everything is frozen. That's when most bush clearing is done here. It doesn't get in the way of farming. If you were close to me, I'd hire you for a couple days at $100/hr. That's really cheap!
Dave it's not frozen down here in the winter. Highs in the 70's today in Central AL and I assume similar in Woodstock GA. Yep that was the point of my question. You are right on the operating cost determining profit part however your business model is not sustainable. There is no such thing as "rent free" even if you own your home outright unless you live in gov't housing. Even if you had a paid for home you still have insurance (at least you should), property taxes, utilities and maintenance. If you are now living in your parents, family member or friends that roof still has a cost being paid by someone. That being said this is not meant as discouragement rather a teaching moment that just because it's not costing you at this moment doesn't mean those costs should not be factored in to a business model.
Reminds me of an article that I read in a contractor's magazine about 30 years ago. "Successful contractors don't win every bid but they DO make money on every bid they win." I never forgot that good advice. I've watched a lot of people chase money by dropping prices to be the cheapest and busiest and make just enough to cover payments. They never last in the market long. They hurt themselves and other contractors by dragging the market down. I have always been on the other end of the spectrum - I would rather be demanding the highest rate but I work faster, more efficiently and I am honest with my customers. I am out there to help them spend their money wisely and efficiently, not waste it. Even if that honesty means I recommends something other that what I specialize in. I would rather give good advice than "Get The Money" just to pad my bottom line. After 28 years, I'm still mulching and I get a lot of work via referrals. Work shut off locally around November last year. Winter is always slow even though it is the best time to clear. I always keep enough banked up to coast through the lean months because I know it is coming. The phone is finally starting to ring a bit. Work is on its way.
That's my philosophy as well. My father told me years ago - "Son you can be tired or you can be hungry. Never be both."
This thread reminds me why I don't charge by the hour for anything. damnescavator, $100 an hour is paupers wages for a CTL and mulcher, $175 is still way too cheap if you want to actually make any money. That type of work is very hard on equipment, especially small equipment that isn't really designed for it. The guys around here doing the CTL/mini ex mulching are all just in a race to the bottom. I've been in business for over 20yrs and IMHO the only way to make a 'Good' living in construction, excavating, machine work, etc is by the bid. Customers don't care what your "hourly" rate is if they don't know it. What they do care about is getting a good job done, when you say you'll do it, and for a price they know upfront. Learn to estimate properly, know your true expenses, excel at what you do, strive to be in the top 75% of pricing not the bottom and the money will come.
I guess I'm on the other side of that coin. I'm about 90%+ hourly. It's part of the honesty approach. I layout costs and rates up front for the customer. Yes, I could make more bidding jobs if I wanted to. I make enough to be sufficiently comfortable. I have a day-rate minimum and the customer can add more work to the budget at any time. It is a pretty simple system that works well for me and gets customers a good deal. There is always more work around the corner.
Here, here.
There is one more factor that hasn't been mentioned. I have worked tirelessly for the last 20 years building a reputation that is founded on getting a job done better than your competition is capable of, and in the timeframe you promised your customer when you committed to the job. I have customers that will wait over a year for me to show up and do their work, because my word that I will get there when I say I will get there is what they are concerned about, not waiting for Joe Blow, who says he will, but doesn't show up until next year, or never. That kind of credibility can ONLY be earned by delivering what is promised, and doing it year after year for enough years that there is no doubt that you will do what you say. In today's market in my area, schedules are everything, and when there are very few builders, when you line them up, the site prep has to be done.
That's why you really need to keep up on maintenance and repairs. It can be hard for an owner/operator. An unexpected bigger breakdown or even the weather can really throw your schedule for a loop.
When you have experience and your name is known I think customers appreciate that they pay for the actual work that is done. It can be hard to estimate some jobs. I always thought if an operator is competent by the hour is the most honest way to charge. Some customers aren't worth the trouble though. They have no idea how much the equipment costs and would complain no matter what the cost. Commercial work is much better than homeowner work in my experience.
great discussion. I am not getting many requests for job quotes but I do get them and last summer I arrived at $1750 an acre as my per acre rate using local mulcher surveys, plus I came up with a way to walk off parcels using a portable gps. so far have had few takers on this approach. I know for sure people set aside limited funds for mulching, its almost always $1000 or $2000, and all have a clear idea how much of area they want to cover. I have not tried pushing the quotes method but treemuncher and MG84 and CM and welderdave and shimmy I sure appreciate your experience and opinions. So far most of my customers have requested the "stop when you hit x amount" method because for most, when you get to x amount their budget is exhausted despite to a one they have a clear idea what physical area they want mulched. It's budget over area, and probably none trusts me personally so they prefer a method that lets them shut things down early if it looks like I am not cranking along. I've not had a single customer shut me down and all have been happy with my progress. I did get one guy order a small job then stiff me on my payment, always amazes me when that hapoens. he started some line of bull about "my office will cut you a check" and months later they had not. So I call him and I get this "oh sorry" but still nothing comes. He's a crook and there are some. I am influenced by you guys saying that no matter what I do, if I run a deep sale its a great way to go under. I did schedule a couple people at $100, but as you say even at $175 I'm just about going broke in skid steer mulching. Good customers will want me to stay in business. As you know mulching is very hard on these machines. You can't repair all the damage and offer low prices. I've been in mulching about 200 hours now, and despite trying my best I've bent hydraulic pipes, threw a track once, backed into trees (do have the heavy bumper), ripped off a mirror, plastered the machine down to the belly pans, cracked the laminate door plus all those hours running at max power/heat are severe. Someone has to fund it or you will go out of business.
From another perspective. The client most definitely, doesn’t care what your operating costs are, they don’t really care if you are making money. All they want is a good job done at a reasonable cost. Some will have some idea, of the scope of work and what it takes but for the most part, they just want the job done well at the price that they can justify. The old scam of, I’m barely making any money and I’m doing this just to pay the bills, aggravates the crap out of me. What, so maybe I should just give you some more money, to feed the kids. Every time I hear this line from a contractor, my respect for him just crapped the bed. No offense but as a customer, I don’t care if you took a job and aren’t making enough money, thats on you.
This is a great reason to quote by the job. You and the customer have a clear understanding of what their budget is and what the area to be covered is. Then it's up to you to make it happen in the time you figured, to make however much per hour you desire. Also I would go look at every job and decide how long it will take you, what obstacles there will be, terrain, etc. A per acre price doesn't take that into consideration, you need to bid it per job. As you well know, an acre of small saplings and light brush on flat ground is completely different than taking out 6-8" trees on steep rugged ground mixed with mature trees. To a lot of people that aren't in the industry or self employed, even $100-175/hr sounds like a lot when they might be making $25-30/hr at their job. The difference between a W2 hourly wage and a cost to run a business hourly rate just doesn't compute to a lot of folks. This is another good reason to not give an hourly rate and instead a by the job quote. You can figure 'your' hourly rate that you want to make, as a basis for making quotes, but the customers don't need to know it. (FYI, I'd be in the $250-300/hr range if I were figuring a rate for mulching, just based on the huge overhead and repair costs). Lastly, if you do try a by the job quote method, be sure to factor in a good buffer on each job. If things go bad at least you'll still make some money, or lose less, if things go good you can do extra area free of charge. I price my work high but try to under-promise and over-deliver, people seem to like that.
Honestly, all those "customers" with a $1,000-$2,000 budget aren't worth the time it takes to bid the job. I have plenty of those up north as well. I am not going to load my mulcher onto the trailer for $1750. $100,000-$175,000 worth of machine, $15,000 a year in insurance, $100,000 and up for a truck and trailer . . . that machine can sit in the barn, at least it isn't burning fuel and breaking things. Homeowners with a $1500 budget need to spend that money on a chainsaw and pizza for their brother in law.
Sometimes you can get a good idea the customer is a shyster just by talking to them. Be wary of customers wanting a lot of work done. I did a couple bad ones and on one the guy was really happy as I was doing the work but at the end complaining about everything. I cut my price and got the hell out of there. It was a good lesson though. Some customers figure they can haggle with you over the cost. It's good to have them sign a contract before you start that they agree to the scope of work and the cost. Also include a clause for unforeseen obstacles that will be extra. What happens if you go in to clear an acre or two and run into some big hidden boulders? If you get bonded you can ask for a deposit up front.