Hiring out equipment questions

[Jeff244]

You probably know this already, but you may want to put a clause in your contracts that the homeowner is responsible for locating all utilities that Dig Safe doesn't, like electric run to the garage or outside lights etc.


Jeff

 

[LBrown59]

You probably know this already, but you may want to put a clause in your contracts that the homeowner is responsible for locating all utilities that Dig Safe doesn't, like electric run to the garage or outside lights etc.


Jeff

I was just thinking about this a while ago.
The dig safe calls won't cover private lines.

 

[MikeB64]

Now that's a great tip! That's why I asked the way I did, one person can very easily overlook something, this is a prime example. Thanks for the information!

 

[Jeff244]

A couple more things,

When you are working for a homeowner, you should get paid as soon as you finish the job. If they aren't home, arrange to pick up the check that evening.

It can get tricky working for builders and developers. They usually will not pay you as soon as you complete the job. Some of them tend to use subcontractors as their banks and don't pay them until the entire job is completed or building is sold. That is fine as long as you understand that ahead of time, and charge accordingly. I don't know what the laws are where you are, but in Illinois you have 90 days to file a lien. There are ways to extend it, but try not to let yourself get into that position. I'm not trying to scare you away from builders and developers, I'm just saying that a little extra caution may be needed. Most of them are good honest people, but I have been taken advantage of a lot more by them than by homeowners.

Jeff

 

[spruce Deere]

Is true. I started dabling in the "tractor on the side work". If you really start adding up ALL and EVERYTHING you need too, yes the list is long, you start to wonder how some guys even make it charging $30-$50/ hour. With a TLB like yours, Guaranteed thats not enough. Check out lonecowboy and farmwithjunk on different brush hogging and tilling threads... People in the know.

 

[2manyrocks]

Do you have to collect any sales or other tax from your customers where you will be working? If you are using the same equipment personally, then this affects or could limit your ability to deduct or depreciate your equipment. Have you talked with an accountant or tax advisor....

I wouldn't pretend to know whether you would be getting into work for which you'd have to pull a permit in your local area.

Do you have a list of contacts to go through to try to get work? If not, do you have some ideas where to start?

 

[LoneCowboy]

Liability insurance (not cheap for excavating), any real contractor is going to require $1million certification to even bid it.

workman's comp

your truck (and trailer) need to be registered as commercial and more importantly insured as such (more more expensive than a car)

your tractor (& inplements) get taxed now because you are using them in a business. It's sometimes called personal property tax, some states you get a plate, but every state taxes them somehow.

You may or may not need a USDOT number (check fmcsa website, they have a webpage where you plug in your info and it tells you if you do or not)
Some states (michigan I know) require anything over 10k to have a special license (not necessarily a CDL), some don't, check your state's DMV.
You are a commercial vehicle (whether you have a USDOT or not) and you'll need to meet those criteria regarding fire extinguishers, triangles, chaining it down, etc, (no paperwork but you do have to do it right). Most states require name of business and phone number on truck (many people use a vinyl sign)

advertising (adds up like you wouldn't believe)

bank account I see you have, registered as a company I see you have.

Can you store your equipment at your house? In some cities this is a big deal, in some they don't care. (zoning laws, etc)

fuel
transport time to get there and back.

replacement and repairs (teeth wear out, etc)

depreciation. Figure the cost of your machine over how many hours you expect it to last (3-4000 hours is probably a reasonable number for a compact) and divide by the replacement cost. Every hour on the machine adds that cost, otherwise you are using your machine up for free. Now you get to deduct this off your income as a non-cash expense, but you still need to be charging for it, otherwise you can't replace the machine)

Maintenance: trucks, tires (oh man will you go thru tires), the tractor (compacts are maintenance intensive, low hour intervals), trailer.

I doubt you've thought of all this, because the price point you've indicated won't even cover this.

I don't think you'll be able to compete. You need to charge close to the same as they get for a real backhoe (approx $100-120/hour) but you can't do the same work. Their only difference is higher depreciation costs, but probably lower maintenance (longer intervals).

You're working for free and putting your tractor to work for free for $50/hour.

Oh yeah, some states tax service work (NY I know for one), check into that too.

 

[LarryRB]

Lonecowbow has given you 90% plus of the needs, Here are some others,,, You need inland marine insurance to go on someone else' property with that compact trator.. If you have a freak fuel spill, broke a hydraulic line and didn't catch it until it pumped 10 gallons on the ground,,, Inland Marine will cover this... I did what you are going into for years.. The liability here in New England is probably the highest in the nation. To get a million minimum plus umbrella, being new if you can't prove operation hours on a given machine such as a 8 ft or shorter backhoe, that liability starting off can easily be $5500.00 and then some, Also, you have to have some kind of provision for blasting or removing large parcels of stone,.., NH is the granite state, is it not? What didn't stay there, moved right on down the valleys and covered all of Mass and 80% of CT-RI with your granite, stone, rock outcroppings and the like,, More times than not, you will not get far digging with a small machine before you run into a Titanic size boulder... Have provisions to cover this./I have a Kubota L48, commercial machine albeit a small one., I struggled constantly with hidden rocks, old pine tree root balls and the likes,,.. Good luck to you,, I haven't done a thing in two years, mostly economics and therefore the cost of insurance and I no longer have any interest in going off the property, When times get a little better I will sell- trade off this 48 for a 5740 cab with loader and this is all I will need,,.,, Take your time, do your homework and rehash that homework several times over,

 

[spruce Deere]

Well done lonecowboy. Our little scool district here requires a million buck certification just to plow parkinglot snow, With school NOt insession. A smaller excavator, cat 315 around here is $125 an hour, last checked. The local rental place here you are out $280.00 or around $70/hr, four hour minimum, just for a 28hp tractor with tiller. Food for thought.

 

[MikeB64]

Liability insurance (not cheap for excavating), any real contractor is going to require $1million certification to even bid it. Covered....insurance to cover my truck, trailer, all equipment and 1 million liability = $1500.00 per YEAR

workman's comp not neceaasry unless I hire somebody

your truck (and trailer) need to be registered as commercial and more importantly insured as such (more more expensive than a car)

Not necessary to register as a business as I am a D/B/A (doing business as) as far as insurance, see above.

your tractor (& inplements) get taxed now because you are using them in a business. It's sometimes called personal property tax, some states you get a plate, but every state taxes them somehow.

Have a CPA....ALL business expenses covered by 1040 long form....everything from lunch to tires, parts, fuel, etc. All mileage needs to be documented with destinations, purpose, etc.
All covered by doing the 1040 long form, all expenses are properly documented. This is straigt from a CPA that will be doing my books.


You may or may not need a USDOT number (check fmcsa website, they have a webpage where you plug in your info and it tells you if you do or not)

Not necessary, way under the 10,001 GVWR as per ICC + DOT regulations

Some states (michigan I know) require anything over 10k to have a special license (not necessarily a CDL), some don't, check your state's DMV.

I hold a CDL-A (tractor trailer) with a current medical card

You are a commercial vehicle (whether you have a USDOT or not) and you'll need to meet those criteria regarding fire extinguishers, triangles, chaining it down, etc, (no paperwork but you do have to do it right). Most states require name of business and phone number on truck (many people use a vinyl sign)

under 10,001 GVWR, those are ICC/DOT requirements, not necessary, although not a bad idea to have.

advertising (adds up like you wouldn't believe)
Depends on what you do, flyers, cards and word of mouth. Web address on vehicles as well as a nice clean lettering job works wonders. Keep truck, trailer and equipment clean...speaks volumes

bank account I see you have, registered as a company I see you have.

Can you store your equipment at your house? In some cities this is a big deal, in some they don't care. (zoning laws, etc)
Can keep it right here whereas I use all this stuff at home. If that becomes a problem, which I don't envision, have plan B,C & D as far as storage of equipment. Truck & Trailer used just for this, have seperate vehicle for personal use.

fuel
Calculated in hourly rate...both for truck & trailer

transport time to get there and back.
Mobilization fees....been calculated, even covering tolls

replacement and repairs (teeth wear out, etc)
Called consumables....calculated, check

depreciation. Figure the cost of your machine over how many hours you expect it to last (3-4000 hours is probably a reasonable number for a compact) and divide by the replacement cost. Every hour on the machine adds that cost, otherwise you are using your machine up for free. Now you get to deduct this off your income as a non-cash expense, but you still need to be charging for it, otherwise you can't replace the machine)

Part of the stuff that the CPA & I have come up with

Maintenance: trucks, tires (oh man will you go thru tires), the tractor (compacts are maintenance intensive, low hour intervals), trailer.

All part of the mobilization and operating expenses

I doubt you've thought of all this, because the price point you've indicated won't even cover this.

Impossible for you to accuratle state whereas you have absolutely no idea whatsoever what my overhead is!

I don't think you'll be able to compete. You need to charge close to the same as they get for a real backhoe (approx $100-120/hour) but you can't do the same work. Their only difference is higher depreciation costs, but probably lower maintenance (longer intervals).

Again, difficult for you to say, every geographic region has different economical challenges. How do you know what NH operators charge for a backhoe? Whereas you don't mention where you're located.

You're working for free and putting your tractor to work for free for $50/hour.

I don't beleive so


Oh yeah, some states tax service work (NY I know for one), check into that too.

You're based on income.