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  1. #21
    Platinum Member
    Join Date
    Apr 2006
    Posts
    823
    Location
    western NC
    Tractor
    Ventrac, Steiner

    Default Re: I want to start a small excavation business...need advice!!

    I will echo some of the other comments about contracts and insurance. First have a contact that says what you will be doing and how much it pays, whether by the hour or set price. It doesnt matter who hires you, it seems they think that since you are on the site anyways, it wont hurt to get you to dig one more hole to plant one more tree, but they dont expect to pay you extra for the extra work. A rock Clause is your friend. It could mean the difference in you starting a hole and not being able to complete so you dont get paid, or you start a hole you cant complete because of rock, but you still get paid.

    Having insurance, including workerscomp is always a plus when dealing with other contractors. It means they dont have to furnish it for you and reduces their liability, as well as their cost of doing business. It also lowers a homeowners liability if you or one of you workers get hurt on their property. As a homeowner, it is their responsibility to make sure you are insured and they are liable for you if you get hurt, your having workers comp lowers their liability. Most homeowners dont realize that if they hire you and you get hurt, they are responsible for you. They think if they are paying you to do a job, they are not responsible, not true.

    One of the best and fastest ways I found to advertise and build a buisness requires little money. Go to your local builders inspector office and ask for a list of all their licensed contractors. Get a list of all the area realitors. Make a brochure of some of your work and mail it to everybody on those list. Include a buisness card with the Brochure. People tend to forget about and throw away brochures as soon as they look at them, but business'es will keep the business card as a possible future contact. Next time they need a contractor, they will search those business cards and you name will be there. Best thing about Realitors and other contractors, those are the folks that tend to have repeat business. Homeowner advertisement and advertiseing to the masses is expensive, tends to be a one time jobs, and those are the people hardest to please. Target advertiseing took us from $40,000 a year to $250,000 in one season. That will pay for a lot of stamps.

    One other thing to consider, Get a Dunns number. this will put on a nationwide list available to other contractors. That way if some out of state company gets a contract on a big project, they can look at the Dunns list of contractors in that area and see your name. Large companies like to hire as much local as they can, it cuts down on the expenses of having to move in their own people and equipment. I have had all kinds of calls from companies from all over the US asking me to bid as a sub on everything from Walmart Stores, to power substations, some local and some not so close. You do have to be a legitimat business to get on the Dunns list, but if you want to grow your business, you need to be there.

  2. #22
    New Member
    Join Date
    Nov 2012
    Posts
    16
    Location
    Buffalo, NY
    Tractor
    Massey Ferguson

    Default Re: I want to start a small excavation business...need advice!!

    Hey guys, im still curious as to what hourly rates i could charge for these particular jobs

  3. #23
    Platinum Member JD 4520's Avatar
    Join Date
    Apr 2011
    Posts
    833
    Location
    Brinnon, WA
    Tractor
    John Deere 4520

    Default

    Market dependent, amount of business and competition, size of equipment, experience and other factors affect pricing.
    Last edited by JD 4520; 12-03-2012 at 03:47 PM.
    Gary

    JD 4520, 400X FEL, Frontier Front Blade, Box Blade, Rotary Cutter, Landscape Rake, 48" Wildkat Grapple and PHD

  4. #24
    Platinum Member
    Join Date
    Jul 2007
    Posts
    871
    Location
    WV
    Tractor
    John Deere 1026R

    Default

    The minimum price should be your costs + 10% profit imo. Remember taxes and overhead in this calculation. I don't work for less than $50 per hr for 3 hrs unless I'm bored, which I've only been once.

  5. #25
    Super Member
    Join Date
    Apr 2000
    Posts
    5,662
    Location
    Cedartown, Ga and N. Ga mountains
    Tractor
    1998 Kubota B21, 2005 Kubota L39

    Default Re: I want to start a small excavation business...need advice!!

    Don't forget insurance when you figure your hourly rate. When you start doing a digging business the insurance rates get pretty high. You will most likely need commercial insurance on your truck also.

    MarkV

  6. #26
    Platinum Member
    Join Date
    Apr 2006
    Posts
    823
    Location
    western NC
    Tractor
    Ventrac, Steiner

    Default Re: I want to start a small excavation business...need advice!!

    First you have to figure your true cost of doing business. Simply chargeing enought to make equipment payments and fuel wont put much money in your pocket. Things to consider, are replacment of the trackhoe once its worn out, or money for parts and repairs. You already own a truck, well charge somethin for that to. otherwide, when you have to replace it, you wont have the money to do so. Same for the trailer. Add something to cover your phone service, you will be using it for the business and it is a expense. Hw about accounting services, even if you do it yourself, your time is valuable and must be paid for. Got a storage shed to keep the trackho under, or an office. Right there is another expense. Insurance isnt cheap and how do you get paid if you are broke down waiting on parts. Got to add a little something for just those situations. Figureing out the actual cost of doing business isnt easy to do the first year you are in business. At the startup, you dont have any previous cash flows to make a accurate decision. Sometimes it takes 2 or 3 years to figure out what your actual cost really are. What ever you do, dont start out cheap just to get business. If you do you will find it awful hard to raise prices if you find you need to. And always charge something for equipment amorization. I can give you a brand new piece of equipment and if you dont charge enought to replace it when its worn out, you will be out of business in a very short time.

  7. #27

    Default Re: I want to start a small excavation business...need advice!!

    Hi,
    Two pieces of advice come to mind that I totally ignored and learned they were true the hard way. These are : "Do not invest in Yellow Iron!" "I would have made some good money on that dirt job, if I did not have to move the dirt!"

    Joe

  8. #28
    Gold Member wcampbell47's Avatar
    Join Date
    Jul 2009
    Posts
    486
    Location
    Texas Coast
    Tractor
    Kubota 7510 and B3200

    Default Re: I want to start a small excavation business...need advice!!

    Quote Originally Posted by BeezFun View Post
    One niche might be using small machines that don't tear up people's property and can fit through reasonable sized gates without taking down fences or damaging trees. People have concerns that contractors either don't want a small job or will make a mess of their yard and damage their trees. If you promoted a willingness to do small jobs in a yard friendly, driveway friendly way, there might be something there. That would also leverage the fact that you have a truck and can haul away dirt/debris, something the homeowner typically can't get rid of.
    I specifically bought a light weight tractor because I'm on a lot of nice yards in the area. I don't leave ruts and tear up the grass like a skid steer or other tracked machine. If you go with the excavator how do you get debris from the back side of the property out to the street/drive where the dump trailer is? Another machine?
    Caution: Some of my posts may be politically incorrect.
    Kubota B7510 & B3200

  9. #29
    Platinum Member
    Join Date
    Oct 2000
    Posts
    588
    Location
    Tully, NY (Syracuse)
    Tractor
    Kubota L3010HST

    Default

    Quote Originally Posted by handymansvs View Post
    Hi,
    Two pieces of advice come to mind that I totally ignored and learned they were true the hard way. These are : "Do not invest in Yellow Iron!" "I would have made some good money on that dirt job, if I did not have to move the dirt!"

    Joe
    What do you mean by "yellow iron"?

  10. #30
    Bronze Member amazincaucasian's Avatar
    Join Date
    May 2010
    Posts
    94
    Location
    mo
    Tractor
    2013 Kubota kx-121, 1988 Kubota L2202DT 1998, Bobcat 331 bobcat, F800 dump truck

    Default Re: I want to start a small excavation business...need advice!!

    Quote Originally Posted by RPPaving View Post
    Hey guys, im still curious as to what hourly rates i could charge for these particular jobs
    Lots of variables there. Around here...60 an hour for 7000 pound mini ex. Same a mid-size skid steer. I charge more for clearing and stump removal. To be honest, I usually price it way high so I don't get it. Just personal preference, but I stay away from it because I usually break something. Get hooked up with a public utilities company if you can. Water service repair, electric company, communications, after a while you'll probly get tired of dealing with the public and the pay is good with utilities. Also you'll learn what they need and become real good at doing it. Working with the same guys all the time is a good deal, you learn what they want and they learn what you want.

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