Tractor Work Business Advice

[sunstardude]

Thinking of starting a tractor service business in southern Oregon. ie. mowing, tilling, post holes, leveling, etc. Last spring I put out a craigslist ad to test the waters and I got at least 1 call/day until I deleted the ad 10 days later. Since I'm not setup yet I referred the business to another guy I know who has a tractor. So I'm wondering 1) is this really a viable, profitable business model, 2) would I be better off with a skid steer vs a tractor, and 3) do I really need a backhoe? I'm thinking of going with an LS XR4046HC at this point, with loader, brush hog, tiller, etc. but no backhoe. Appreciate any advice. Thank you.

 

[MtnViewRanch]

My first suggestion is if you are going to do this legit, check out the liability insurance for what you think that you want to do. You may change your mind or change what you think about everything that you are considering doing. As in exactly what you are going to hire yourself out to do.

You don't want to end up working just to pay the insurance.

Good luck

 

[roadhunter]

Most of the "tractor" work guys I have seen are retired people who work fairly cheap. Hard to make money competing with that IMO. For things like snow removal other equipment may be more marketable.

As Mtn View mentioned check the insurance for what you are thinking of. Once you start digging insurance changes.

Once that comes to mind is doing tree work. A grapple and chipper on the tractor would probably work pretty well. Drag it around with a dump trailer so you can haul the chips and larger pieces. Then if that works add a PTO stump grinder to expand your services.

 

[CurlyDave]

I have done small jobs for friends and neighbors, but one of my hard and fast rules is that no money ever changes hands. My insurance covers me in that instance, but commercial insurance is way too expensive for me to even consider.

An insurance company has a duty to its shareholders to minimize the claims it pays. Any excuse to deny a claim must be taken.

* * * * * * *

Think about the total time involved and what you will charge. Transportation to & from the job site take you time fuel and equipment, are you going to charge for these?

Most people would never mow a field until they had walked it. You never know what is lurking in the tall grass. Are your customers going to pay for your time doing this?

 

[spruce Deere]

Echoing what has already been said, Commercial insurance to cover you, your work and transportation of you and implements.... WAY different when things are 'for profit'.

Really Figger out How much YOU and ALL implement needs to work profitably, counting transport time, fuel, maintinace, minimum time or job size to be profitable and so on. You might be surprised what it REALLY cost.

This has been discussed many a time on tbn. There has been good advice a flat out members that are just cranky others even think of making some $ with there stuff....

Its fun and frustrating, good luck!!

 

[bdog]

In my area it sucks. There are a ton of guys with old worn out tractors that will undercut you for minimum wage if that. I have a full size backhoe, dump truck, and 100hp skid steer and go after the jobs the guys with the $2000 tractors and shredders can't do. If I can't get at least $75/hr I will sit my fat butt at home.

The problem you run in to is if you try to run a legit business with insurance and all you can't compete with all the weekend warriors who want to earn a buck.

I am not saying you can't make a good business out of tractor work but you need to find a way to offer things that every jackleg with a tractor can't do because lord knows there are plenty of them.

 

[oosik]

Around here it would be next to impossible. The only mowing would be hay and that takes BIG equipment to cut, cure & bale. Everybody puts in T-posts and barbed wire - very little "horse fencing" around here. Leveling & tilling - Man, in this area you would have to be getting into the BIGGEST equipment available. Nobody has fields less than 100 acres and they go way beyond 8000 acres.

That's why you see very little advertising for that type service in our area. My neighbor has commercial/business insurance because he cuts/cures/bales for others - what he pays simply scares the snot out of me. Also - during the "season" he goes thru more than 5000 gallons of diesel fuel each month.

There is a LOT of leg work involved in what he does. He has to determine what is firmly committed for the upcoming year so he know exactly what equipment he may need, the time tables involved, overall locations and movement of his equipment, location and placement of fuel & supplies and then try to determine the exact type and amount of insurance he will need.

Its like most adventures in farming - some years you profit - other years you reap the wind. I guess after years & years of doing this - he has learned how to sleep at night.

 

[PHPaul]

What everybody else said, plus:

Be very, VERY careful about getting into any kind of excavating, including post holes. All you have to do is hit one phone line, gas line, septic line...

 

[skipperbrown]

And don't forget licenses and taxes. You will need a business license and [possibly] owe tangible taxes and sales tax (if you throw fertilizer or sand or dirt). Plus, any income is subject to self employment tax (13.3%). So if you are in the 15% tax bracket and you net a $1000,you will owe Uncle Sam $283 plus any other taxes/licenses listed above or about 1/3. You will need to charge a high hourly fee to make any money. I can give you about 100 more reasons not to go into biz for yourself, but you only need one reason to work for yourself: Because you want to.

 

[TSO]

Also consider, you need to be handy enough to be able to quickly fix your machine and implements. You WILL break things, often during a job. Time is money, and you need to be able to fix your equip and finish the job. And, paying for repairs will quickly eat into potential profits.

Last year, I got hired after another contractor had a breakdown and left his skid sitting on the property... Apparently he couldn't afford to fix it. After the 4th week, the homeowner had the machine towed and called me. You'd be surprised, but that actually happens more than you'd expect.