What do you guys think of this setup for starting up. I would be putting atleast $60K down. Peterbilt 335 dump CAT 305 with cab, thumb, 3 buckets CAT 252B with cab, forks, bucket, auger. Eager Beaver 20XPT 19'x102" Total $260K with $10K added for insurance, ext. Or GMC 5500, 4x4, diesel, crew cab, dump Eager Beaver 10HDB-PT Total $225K with a extra $10K added for insurance, ext. This equipment would be used for landscape installs/removals, walls, pipes, driveways, pools, ext.
Hey Jaz, I don't know your trucks so I wont comment. However for landscape work I think you could get away with smaller machines and save a bit. I mean, bigger is usually better in earthmoving but we have the Kubota KX 161 which is just a bit bigger than a 305 and it can be a PITA on restricted access work. Can you look at a 304 and a 246 instead?? just a suggestion that may help.
Is this a new venture or changing direction for an existing business? Assuming new. From my personal standpoint, start as small as possible. You can always invest more later, but those huge payments will be hanging over your head if things are slow at the start. I can't tell if your looking at all new stuff, but new isn't always best. I'm also looking into moving into small excavating/landscaping in the future. The bigger stuff really has to keep moving to make money and it's really an all or nothing thing. For example, you need to have the vehicle to move your own stuff which is a huge expense, but need to have the jobs lined up to pay for the truck and trailer. I really like the idea of smaller machines and vechicles(better fuel mileage and payments). You also have to plan for an economic downturn. You want to set yourself up to be able to make money no matter what. If things tighten up, people may skip a vacation and fix up the driveway or do some little project around their house. Most importantly, keep yourself as free as possible with smaller payments. It won't matter if you can see an emerging trend if you are burdened by too many payments. Sorry if you've heard all this before, but I've seen lot's of people lose stuff because they stretched things too much. As tempting as that shiny iron is, it stings twice as bad losing it.
well starting out i don't think i would be running out to get all new stuff as the payments woud be high depending on what your primmary thing would be i would get new then get some stuff used. The pete 335 is and awsome dump but why would you need that when you can get a cheaper truck to do the same at half the cost of it. there is alot of good clean stuff out there and besides the trucking is really a small part of it, most guys have the stuff delivered and hauled out by subs.
My dad quit doing the tree & lawn business in 2000. I'm 16 and hope to restart new when I'm 18, I would like to add excavation to the business and my brother would be a business partner. I would NOT run out to get this right away. I would offer retaining walls, pavers, ext and just rent out the equipment for the first couple years (like atleast 7). Before I purchased this equipment I would make sure that I would have a good customer base of at least 200 mowing accounts + several jobs completed and my word out, I would also make sure that I'm getting atleast 15 $15K+ hardscaping jobs a year before I even considered purchasing. I am working on a business plan that will get reviewed and corrected as needed and wouldn't be purchasing this equipment until atleast 7 years after I have restarted the business. I would really like to know what equipment would be best and why. I could probobly go with a 304 but the skid neads to easily lift a pallet of pavers, wall block, and have good hydrolic flow, ext so I think a 252B would be just the right size. I greatly apprecaite any replies and am NOT thickheaded. If you have a reasonable reason for doing someting another way I WILL listen (which you probobly do). I know you guys have ALOT more knowledge concerning this you that is why I'm asking you. I would like to go new or just slightly used because of the warrenty and the better performance it would give plus less break downs, ext. I WILL be going to college to get a engineering degree so before anyone bashes my that I should go to college first I AM. (Got bashed on another site because people tend not to read the entire post) Also before a got the equipment I would have atleast 10 $15K+ jobs signed for so I am garuenteed some work for the first couple months. BTW this is my first post the rest where my dads. I'm on another forum and have shared it also with my dad and when they found out that I shared it with him they automaticly thought that it was me posting and that I just was just lying.
That does help clear some stuff up. I really couldn't tell from the first post. Your list read like my wish list so having a plan to get there is good. It becomes pretty obvious what can be rented and what needs to be bought. It's tough though to decide to go new or used and then how used. If you start looking for machines with 500 hours and see a nice one with 700, before you know it the 1,000 hour stuff starts looking decent. If the machines must run all the time, then new or pretty close is almost needed. If there will be some downtime every so often, you can save some money on the initial purchase by buying used and save a little to budget for repairs along the way and probably come out better in the end. I'm only 22, so I'm not that knowledgeable, but I graduated May 06 with a degree in Business, so you better ask your questions while it's still fresh in my mind. Excavating is just a side line for my family and as I tell my dad, it makes a terrible hobby, because you can't make any money that way. Some day I hope to grow the business. It will probably be similar to what you plan on doing with the smaller equipment.
Thanks for the info CAT420. Anyone else care to add?
You are choosing the most expensive brand truck for a dump truck. If you found a decent used T-800 Kenworth tandem which is just as cheap to operate as a single axle you can find a good enough dump for 30,000. Get a trailer that can pack both machines and what ever tools you will need or if in the future you start getting into 16 ton excavator you can move it or carry a rubber tired backhoe. Find a deal on a low hours excavator don't restrict yourself to Cat there are other brands out there for a better price and last the same amount of hours.
I don't think he needs a tandem for lawn and landscape, and I have to disagree that they are just as cheap to operate as a single. Tags taxes fuel and maintenance all go up when you put more rubber on the road. Younger jazak - If you're comparing the 335 to the 5500, you might look at the new 330. Pete split the line into 3 models now 330 335 340. It would be more apples to apples...
All I gotta say is don't buy brand new equipment starting out. Trust me dude, you'll have some sleepless nights. Not worth it.
My take on buying a dump truck is to buy a tandem at least. If you have to get a cdl A and need a dump anyways, bigger is better. I had a single that could move about 5yrds. I tried to use the single axle truck for trucking for hire and no one would use me because they could get a tri axle to move more for about the same money per yard. A tandem can move about 15 yrds so the cost to run the tandem is not 3 times more than a single axle. Last week I was in between jobs so all I could do is run my dump truck. I got hooked up with a local gravel pit and can haul material for them any days I am not doing excavating. They pay about $3.50 per yard or around $65 to $70 per hour. When I had a single axle they would not talk to me at all to do any trucking for them. One long 11 hour day I moved 240 yrds of gravel. Used $175 for fuel and gross pay for the day $840. Not getting rich but made $665 that day that I would not of made with a single axle truck. As a matter of fact my truck would of been sitting along with the rest of my machines. If my equipment gets bigger I can still move it myself with the bigger truck. When I do my own excavating jobs it pays for me to do my own trucking now when in the past I would have to hire out my trucking and wait for them to show up with my material. If I need 20 trucks or so I still hire the trucking out just to get the material to the job faster. What do other states pay per yard for trucking is it around $3.50 or is it more? All the trucks coming in and out of the pit doing the same thing that I was are newer and around $50k to $100k trucks getting the same pay but hauling 16yrds so the gross pay would of been $896 for them that day and still making money. I just could not do trucking every day very boring and excavating is more per day but it ia great fill in and a great way to get the most out of your investment.
I also agree with Cascade don't by new, your overhead can kill you before you start, shop,shop,shop and you will find good used machines and fixing them up will still cost alot less than new.
If you are after a dump just to move a small excavator around and you don't want to haul large amounts of material then look at a F-450 F-550 Ford or a 4500 or 5500 Chev with a dump box. Otherwise if you want to get into excavating then I would go directly to a tandem a single axle is rarely used or it is here its not worth it they don't haul enough nobody hires them. Our single axle rate is 60 dollars per hour a tandem is 80 a tandem can haul 15 ton legally a single axle with a 35,000lb gvw is only good for 7 ton at most If you are only going with a 6000-8000lb machine and all you need to move it around a 1.5 or 2 ton truck.
Exactly Ford, But why bother with smaller truck that could cost as much as a older tandem? I did this mistake many times, purchase to small in the first place and then have to sell the small machine for the bigger machine. Go with an older bigger truck,dozer, excavator etc from the start. I have had to upgrade size wise on every thing I bought, had to buy older to stay with in budget but always seem to need bigger. Moving material around is what it is all about and the more you can move with what you have the faster you can do the work. The only peice of equipment that I purchased small and glad I did was the Bobcat 331 for small residential stuff but still had to buy a bigger excavator and keep the small one also. Truck,dozer,trailer, etc all had to be larger than the first one I purchased and wish I did it in the first place.
Get the GMC 5500, CAT 305, CAT 252B. Then several years later get like a Pete 357, CAT 315, & CAT D4. The smaller equipment is better for ME because I can bang out more jobs then if I had the big stuff, most the work here is now residentail and if I needed the big stuff I could just rent it out. The smaller jobs here pay better and take less time so a faster revanue of money flow. The truck will NOT be used for hauling large quanitees of stuff. I would get everything trucked in. As most of you know its a must to have a dump for those last minute needs, ext. Around here a GMC 5500 4x4 is much more versatile then a big tandem or tri-axle dump. For me I think the smaller stuff would work better because I like doing smaller hardscaping jobs which pay better and require less time to finish. I could build up the business as needed but right now most of the jobs here yopu need small equipment to complete that can get into tight places. Tell me what you think.:thumbsup Agian thanks for all the replies.
If he is just going to do light excavating and landscaping a 2 ton is probably good enough. If he has to move material around a site there is no way a 6000lb mini is going to reach the top of a tandem axles dump box.
All I can say is TEST the market out for a year or two so dont go out and buy the nice shiney toys because u want them.. go and settle for less till things get going better, then think about newer toys, and going bigger. My bro-inlaw is going through this right now, he just started a fire wood business and is selling a cord for 200 dollars. hes been really busy and he ended up buying a splitter for about 5500 dollars. He needed the splitter because doing it by hand was just not going to work over the long run. How ever he has found this new fire processor thats worth about 75K. Its very fast, and does everything, cuts and splits the wood. but I keep telling him he does not have the demand to pay for the machine monthly. I told him to stay small and keep it as a small business. but he is determined to tell me he can keep it busy and that it will be fine. but he hasnt considered alot of things. right now the plup price is down to 7 dollars a metre right now so there is alot of excess wood laying around from the logging. but as soon as the price jumps to 25 or 35 a metre which will be in the next year or two, the campanies wont haul to private guys like my bro in law. so this will now mean he has no wood, and wont be able to keep the money coming in. He pick a business that has huge ups and downs and wants to go big right away. which I fear will be his down fall. So my only advice is make due with the bare minimum for awhile.. test everything out and make sure its fool proof.
Like I said I wouldn't BUY the equipment for 7 years after the business is "restarted" but I would be offering light excavation until then and rent. That way I can get my name out, a good customer base and see what its like without putting big $$$$$ down.
just a thought but i find i don't run dozers much anymore,whatever you can do with a dozer you can do in an excavator.
I agree that an excavator is used more than a dozer but any grading you have to do or just move alot of material around the dozer is the best. The combination of the two is best IMO. Some excavators have a blade but only the newer more exspensive have a six way which is a must for any grading work. I tried this when I started out, good for two jobs a month on a part time basis but any more and the rental will kill you, it rains a couple of days, or you have to wait for some reason, paying rental company to move equipmnet gets exspensive also, profit is lost. You will find that somebody that owns his equipment can beat your price everytime. Every buisness has start up costs no matter what it is. Excavating just happens to be one of the most exspensive to start, thats why you have to charge $70 to $150 per hour for varius machines. The cost of doing the work is so high. A highly educated pharmacist gets $75 an hour with 6 years of education. I am not worth more than a pharmacist but have a higher cost of doing what I do. Overhead. Very hard to do anything part time, either 100% or nothing. Your compition is in 100%. If it was as easly as qouting some jobs geting them, renting a machine to do them, and getting paid every guy with a pickup would be doing excavating work. My advise is hit head on from the start. The market is already proven for sure is NJ many guys making a nice living already you just have to be competive with them in every way to get the work. Know what it takes to beat the guys that have the work already and that is what you have to do. How many of these guys that have the work you want rent the machines to do it. You have to make the investment it is that simple IMO. This is true for cutting grass to doing large commercial projects. How to do it so not to overextend yourself out of is answer.
So what you're saying is wait maybe a year max and then go get the 5500, CAT 305 & 252B? Then 2 years later get Pete 357, CAT 315 & CAT D4?
it all depends on the housing market honestly. its slowing down in many parts and the low interest rates can't last forever i feel that the big boom is going to die off fairly soon.you'll have many established large and mid size contractors out there fighting over any work they can get and cutting each others throat,i'd stay away from the bigger stuff for now and go for the smaller stuff if you can. i'd go with the smaller dump say a 2 ton,the mini excavator and the skid steer and find a niche that others in your area are not servicing. a friend started out with a 331 bobcat mini,a kubota tractor with various attachments and a one ton dump,he added a 5 ton mini recently and sold the one ton and bought a single axle since he outgrew the size he started out with,i think this could be the idea here,start small and let your market set the size you go then you won't buy any equipment you don't need.
What I am saying is wait long enough to save enough money so as not start out half a**ed. The size you want start out is up to you but what ever size it is make sure you have enough money and equipment to be competitive with the guys doing what ever that is. I read in a publication one time that 2/3 rds of all upstart companies fail because of not enough start up capital. It's a gamble no mater what, but don't cut yourself short from the start. Find out what it is that you want to do and do it 100%, this is true for cutting grass, to large excavating company. You need to own the basic mix of equipment what ever that is to be compitive along with insurance, advertising, and all the other exspenses to keep it going long enough to start making a profit.
I would say that niche is being filled in his state, NJ by hunderds of guys if not more. You have to be able to beat the going price and do it correct the first time faster. In my area we have hundreds of guys with single axle, small ex, and skid steer. Advertise more, quote more jobs, and just plain outwork the others is the only way. This all cost money. It not easy, if it was everybody would do it.
I AGREE 100%... Around here we have quite a few new contractors that are VERY big. 30 plus excavators 200's and ups, plus other equipment and over 25 dump trucks.. how ever they just started up a few years ago and were not known intill now. so when the building craze drops out.. they wont have any long term customer base to keep working. atleast not the entire collection of trucks and equipment, maybe a few here and there. The smaller outfits in this case will do better if they have been around for a long time and have a huge clientel built up. the outfit im working for is very secure. we have 2 excavators, and 6 dump trucks. they have also been around for over 30 years and have gotten a well known name for them selves. so the customers that have will still use them when the craze drops out. but its only a matter of time before the boom stops or atleasts levels outs.
if the smaller jobs are spoken for the mid size and bigger jobs can be even worse. the bigger equipment comes with added pressure,you have to keep the 315 moving everyday for it to pay for itself,dozers are even worse.you won't see dozers unless your building roads or moving large amounts of earth from point A to point B. give me a 12 ton excavator and i'll clear,excavate the foundation and grade a residential lot no problem.
Dads thinking of moving to NC. If that happens the big stuff is coming right away since the house boom is just starting there. Plus down there the business wil boom and there will be lots of work, here its pretty much already established & slowing down.
That is why I would rather work for someone then be the owner of the company. for the little bit extra money your making, your taking on 5 times as much work. My boss also runs the equipment so not only is he busy on the machine for 10 hours a day, hes got to do the billing and pay roll, setting up jobs, advertising, job hunting... etc... for me I show up at the job at 7am, warm up the machine, grease etc.. 7:30 I start working, work till 5pm and IO shut the machine down and go home.. the occasional times I will order trucks, maybe go have a look at a job for him just to help him out. and other wise I think for what im making its not worth the hassle to take on for a few more dollars.. How ever I hope to own my own equipment oneday.. maybe when im ready to take on the extra responibilities.
The market here is already slowed down the prices of building lots range from 200,000 to 2 million but they are not really selling. The people that have money have bought what they want. The people that think 1 million dollars as pocket change have run out. I can't afford to buy anything on the wages I make I can afford the 2500 dollar a month mortgage payment. There are developers that have spent allot of money and they may end up getting burned or sitting on property that isn't going to sell. Start small and becarefull don't sink yourself into debt.
Market took a huge downturn here this year. Started off well as far as real estate goes, then about mid summer when realtors normally don't have enough property to sell to meet market demands (this happened last year), properties weren't moving out the door. Now, I think work will continue, last year was so huge for our area that all the building sites that were sold I'd say only 10% of them actually have had any work done to them thus far. Usually, folks that drop $150,000-$400,000 for a lot don't build on it right away, they're still trying to swallow the initial land acquisition costs. But, with rising interest rates, we'll see where things end up. Landscaping for us is getting to be a risky deal anymore. Ford LT, I know you can hear what I'm saying on this. Folks spend $250,000 on average for a building site with a great view and all utilties, then spend $600,000 on a huge @$$ house. Then, when it comes time to do the landscaping, they've run out of money and want to penny pinch the landscaping, so they'll hire the ponchos down the street for $10 an hour with no insurance or credibility whatsoever. Landscaping is getting to be a difficult market for us, everyone wants something for nothing. Builders are the absolute worst, they always run over budget and under estimate the landscaping costs and turn the customer on us at the end saying it was our fault that the landscaping was costing so much. It just gets to be a headache after a while, dealing with builders is no fun at all. All that ends up happening is everyone getting hosed off just because the builder wanted to save maybe $5,000-$10,000 on a $700,000 house, go figure. For excavation we made exactly what we were worth, never hassled about our rates and our customers were happy. It's too bad we had to bail out, but I'm hoping my old man can keep steam going with the landscaping. Our gross landscaping revenues were down 25% this year, really bummed about that. Our first 3 years were gaining speed in good leaps and bounds, figured we had a good foothold on the market. At this point, I think my old man is going to give it a run next season and if the landscaping goes as badly as it did this year I think he's going to get out or try something a little different, maybe pool installs. Not worth having sleepless nights when he also owns a motel that brings in gross revenues of $400K+ a year. My advice Jazak, take things easy, don't get yourself buried. We bought that new 312 and 277, could have made it work out but it would have been more than I could have done by myself. Buy used equipment, test the market, then upgrade from there. We were lucky and were able to pull the plug before we got in too deep and still ended up with some coin in our pocket despite the depreciation on the equipment. We were terribly lucky on that deal, I'm still really bummed out I had to let it go, but when something just doesn't make sense logistically you have to realize what your sanity is worth. I had a friend I went to high school with pass on in the last couple days, made me realize that I could be here one day and gone the next. Doesn't want to make me quit working at all, I'm never going to quit doing what I love to do, but if it's getting to be stressful on a daily basis just trying to keep your head above the water maybe it's time to take a second look at the operations, tally the score, and plan for a different approach. Right now that's where we're at anyway, already figured the excavation division just wouldn't work at this point, now we're figuring the landscaping side of things.
I just registered so i could post in this thread. I am 20 years old and have been in business for almost 2 years now. Sitting at your computer thinking about what equipment you should buy in 7 years is the biggest waste of time. If you are doing a decent amount of work, there is no way you could wait 7 years to by machines!!!! 2nd off, as soon as you start working, things will happen differently than you planned. I thought i was just going to focus on grass for a couple years with a couple wall and paver jobs here and there. That plan lasted for like 3 months. Next thing i knew i was doing big retaining walls. FAST FOWARD 8 more months, i am at my Cat dealer buying a 246B. 4 months later i'm doing real big jobs (over 50k), looking at buying a mini x and either a single axle or a tandem dump truck. The point i am trying to make is that no matter how much planning you do, or how much you work on your business plan, you will have no idea what direction your company will go in, untill you get out there and start working. You will have no idea what equipment you will need until you acctually start doing jobs!!! Matt