Tractor business?? Advice/info

[SCOOBY14B]

I hope this is the right forum, if not...please advise.

I have been contemplating doing this for quite some time. First off, I have alot of time on heavy equipment (mainly CAT 963, D5-9, 621's, 325,330, etc). I have also operated numerous skid steers, but not many tractors...go figure.

I am thinking of purchasing a tractor to do as a side business. I am a fulltime firefighter/ Mr. Mom, but wanting something to do in offtime for money and myself. I was thinking of purchasing a tractor (most likely Kubota 4wd, most likely an L3400). I was thinking of getting a 5-6' rough cut mower for field bushhogging, a pulverizor or similar for landscape prep, box blade and a front end loader if I could swing it. I would prefer to buy a good used unit since I am starting off. I have no used for a tractor on my property (small subdivision lot) so it will all be for hire.

Questions:

1) First off, any advice or recommendations from the experts?

2) What kind of rates are being charged? I live in NE Georgia in a rural area 2 hours NE of Atlanta. I have asked around and looked in yellow pages and have only found ONE preson who does tractor work within a 30 miles radius. I know there are more, but they are not easy to find.

3) What sort/amount of insurance should I consider?

4) Since I have little to no experience in this, I have no idea on how to calculate time to bush-hog an area. I'm sure with experience it comes, but don't want to present myself as an idiot.

5) Any advice you guys can give me, I would greatly appreciate.

Thanks again.

 

[MessickFarmEqu]

While you can charge for bush hogging, you can charge much more for doing lawn preperation. Id' look at a box blade and preseeder. Rates are vary from place to place, I'd say 65-75/hr is a start. Sounds like your in a great area for it.

 

[SCOOBY14B]

Thanks for the reply. Yes, I think the busniess is out there in my area, just getting the word out. I have several friends that do lawn management in this area, so we could help each other out in our fields.

As for insurance, what kind of coverage should I look at and what kind of prices are people paying?

I am at a severe disadvantage in the fact that I don't have the first stinking thing I need. I will have to purchase an appropriate truck (I currently own/financed a Toyota Tacoma). This shouldn't cost a substantial amount as a longbed,2wd, single cab 3/4 ton should be able to be picked up for less than $5-6k. I will also have to buy a trailer as well.

Still looking/investigating...so who knows.

Again, I greatly appreciate ANY information you guys could provide.

 

[bdog]

I am doing exactly what you are talking about. I started about 3 months ago and have been doing well. I already had the truck and trailer though so I don't know how it would be if you were paying for those as well. Also I own my land and use my tractor on it alot so I figure if I just work enough to make my tractor payment, then basically I am getting my tractor for personal use for free.


1) Shredding. I have a 6' shredder on a 42pto HP tractor. I have never bogged it down. I could probably run a 7'. I average 1.5-2 acres a hour. I could probably go faster on wide open fields but that is never the case. I am always getting jobs where I am mowing around trees, fences, wells, junk, etc. I wish I could charge by the hour doing this but around here everyone wants to pay by the acre. I charge $25/acre with a $50 minimum. I have thought of going to a $75 minimum. On smaller jobs you spend more time loading/unloading etc than cutting. I guess it all depends on your area but I have done about 30 shredding jobs and they are all between 1-5 acres. I could make some decent $$ at the 5 acre jobs but little ones are not too profitable.

2) Tilling. I have a 6' rototiller. I charge $45/hr for this. I get alot of small jobs like gardens, lawns, etc. Most never take more than an hour. Again I usually end up charging my $50 minimum.

3) Dirt work. I have a fel and a box blade. Again $45/hr. This is my favorite and most profitable thing to do. I get a lot of work where they are building new homes. I level the yards and usually it takes 6-8 hrs. I also do driveways, gravel, and preperation for concrete work. To me this is where the $$ is at as I have never had a job less than 4 hrs. Only problem is I usually only get 3-4 of these jobs a month.

4) Post hole digging. I charge $4 hole / $50 minimum. I can dig about 15 holes an hour. Good money, but I don't get a lot of calls. I have only done two jobs so far.


I guess the bottom line is it is a decent way to supplement my income, but there is no way I could rely on it as my primary source. With your other job I would say go for it, but from my experience 90% of your calls will be for shredding. If you just want to do shredding you can get by with a heck of a lot cheaper tractor. A lot of my competition around here are using 60-70 model tractors that they probably have less than 5 grand in the tractor and shredder combined. Sure they have to work on them now and again but they will see a profit way before I do.

 

[ronbo3]

With a 5' shredder, you can expect to do about 1 acre an hour. A 6' shredder will do about 1 1/4 acres an hour--rough extimates, but pretty close if it's fairly flat land and clear of obstacles. Around my place, the going rate is $50/hr for tractor work. Seedbed prep for landscaping, and/or tilling for gardens sounds like a niche you might explore, in addition to general tractor work like mowing, moving dirt, and discing. Good luck! It's always nice to make $$ while using your tractor!

 

[2nstonge]

I have a JD 4110 that I use for customer backyard projects; tilling, gravel drive repairs, landscape raking, light BH work, etc. It's a great niche in my area as there are alot of TLB and heavy equipment guys but no one catering the homeowner who needs just 1-2 days work. But, I also use the tractor around my own home quite a bit so it was easier to justify the expense. Just think of the gear you'll need and see if the budget makes sense; tractor, implements, truck, trailer, maintenance...and then look at operating costs; fuel, routine maintenance, repairs, etc.

Insurance: inland marine policy for towing the tractor around town, liability and probably a contractor policy for doing the work...talk to your insurance agent, they can give you all the gory details.

I would have been happy with just 10-15 tilling jobs this year (my first), I did 30. The tilling led to other small work and then I spent all last week on the tractor tearing out someones collapsed landscape timber walls and regrading their yard. The work is out there but the cost of entry is pretty steep.

Good luck, -Norm

 

[SCOOBY14B]

THANKS GUYS!!!!

Keep 'em coming, this is exactly what I am looking for!

GREATLY appreciated.

 

[bdog]

Forgot to add, a rule of thumb I heard for going rates on tractor work is $1/hr per horsepower. I have 47 hp and charge $45/hr. No one has balked. I know a guy with a 30 hp and he charges $35/hr. Just a guideline incase you are looking at smaller or larger tractors.

 

[JoeinTX]

Well, Scoob', I was in the same boat. I wanted a small tractor to do small paying jobs in my free time on my off-days from the "real" job and such. Two years ago I started looking for a tractor and equipment and I started looking at new tractors and financing. The low monthly payments are attractive and make owning a new one rather easy, but I got the jitters over having another bill and cooled on the idea.
Fast forward two years, and I bought an 8N Ford and new 5' shredder for about $2500 total out-of-pocket. I have less time to spend on a biz than I thougt I would two years ago. And, right now, even though I have the equipment, the experince, and the vehicle to move it....I find less time to apply to it than ever. I guess what I'm saying is that you can easily overestimate yourself and your equipment. What you are planning to accomplish now with this new tractor, you should probably plan on doing about half of it in reality. If you accrue a monthly payment, make sure it's something that you can handle without being forced to use the tractor just to make it or have it put a dent on your budget while it's not being used. I'm not trying to be down, no sir. But, reality will put a damper on een the most well intentioned plan. Now, I thank goodness that I didn't finance one as it would just be sitting there costing money as I try to find the time to use it. As it is, if it sits, I'm not put into a financial problem.

Insurance? I took out a $300k liability policy and it costs me about $52 a month after the $280 first installment. Some people take a full $1 million policy or more and some opt for the minimum $100,000 policy.

Charging rates is an inexact science and I've seen the same size equipment go for widely varying prices in different areas. The $1/hp rule is pretty good but you should probably check and see what the local rent-all place charges for a comparable tractor/shredder combo and add what you think your time is worth to that. The average 25-35hp tractor with a 5' mower will average about 1 acre per hour, give or take. I had settled on $30 and hour for my rig and if someone wants a per/acre quote it's easy.....$30/acre as well.

Seeing as how you are going to have to buy not only the tractor and implements but also the pickup (trailer?) as well, youa re talking about a good deal of money up front just to get started. Have you got work lined up or a pretty good idea on how to get this all back?

Not being negative, just thought I'd throw that in since I was in a very similar situation to you not long ago and learned a few lessons.....

 

[Jackrabbit_Slim]

I do this as a full time business and that includes post pounding and fencing. I started with a Kubota B2710 with a pretty full line of implements and I've just invested in a 7 foot landscape rake and a 4 foot tiller that I run offset. I don't know if the tiller is going to pay for itself or not. It's a pretty short season for garden tilling here, but I think I'll be able to use it for prep work on some of my landscape jobs that will come later in the season.

I went with this particular model of tractor because of it's size and weight. This is wet, wet country and I don't need to put a lot of traction on the ground on most of my jobs. What I do need is the agility of a small light machine.

Anyway, I had a pretty comprehensive business plan before I went into this. Some of it had to be projected, but I looked at: equipment repair and maintenance, fuel cost for the machine (who knew that was headed where it is?), accounting/book keeping costs, advertising costs, repair and maintenance of the truck along with fuel for that, banking fees, liability insurance at one million dollars for about $1,800 a year, vehicle and trailer insurance at about another $1,500 a year, telephone and a couple of other things.

The insurance was a big one. I don't know how it is in your area, but up here if you're working for money and have a wreck when you're not insured to work as a contractor they'll leave you hanging out to dry. I'm not keen on losing everything I have because I thought I could dodge a higher payment.

Taxes are another issue. Are you planning on paying them?

I came to the conclusion that I was going to have to get $48.00 an hour to make it pay and all my quotes are based around that number. I give a fair quote on every job and that's the final number. I live with it. No surprises for the client down the road and once in a while I've been known to charge less at the end of the job if it went particulary well. I prefer to quote a flat rate so that I don't have people worrying about "what's taking so long" when they're paying by the hour.

Some people are OK with that. Some aren't. I don't work for the ones that aren't. They're going to be unhappy with me from the get-go and I'm too old to put up with niggly fault finding and someone else's issues. If they can do it better or cheaper, they're welcome to invest in a tractor, machines and implements and have at 'er.

I'm constantly fighting weather here. We've had a particularly wet spring and it's hurt me financially. The rain stopped yesterday; it'll take the ground here a week to dry down enough to work and the forecast is calling for more rain at just about that time. Fortunately, I've got some fencing work that I can do in the interim. Some days go better than others, but all in all it's not a bad way to make a living.

The idea of making the cost of a tractor payment so you can use your machine "for free" is attractive, but I would stress sitting down with a calculator and doing some hard, detailed math. Look at every possible cost you can imagine. Grade 70 chain for holding that machine down on that trailer can cost a couple of bucks - so can hooks - so can load binders and a dozen other things that add up pretty quick. And be realistic with your projections both in terms of expected income and the energy you can devote to doing business to make sure you can make it pay before you dive in.

Hope it goes well for you.

Slim