In need of some advice on land clearing bussiness

[Indydirtfarmer]

I have a business simular to what you are talking about. I keep 2 tractors running full-time during the summer months. It has taken about 20 years to develope it into the buisiness that it is today. The first few years will see you hustling for work. Anything to stay busy and get your name out....After a few years, you can get a little more particular abourt what kind of jobs you take. Bush hogging for hire will draw a good many jobs you'd just rather pass on. Equipment cost's are decieving. You need to allow for the fact that full-time bush hogging is rough on equipment. You will be replacing mowers every few seasons, at best, even with the best of equipment.

The profit margin isn't what it should be. (Too many "part-timers" out working for the fun of it) Fuel, insurance, and labor cost's will eat you up. If you have a truck and trailer, just about figure on double the purchase price of them to pay taxes, insurance and up-keep yearly.

I'm not trying to talk you out of it, but merely preparing you for the reality of what you're doing.

I've been doing this kind of work since 1974. This isn't just a "guess" on my part. BTDT....John

 

[DKinWA]

Lots of good advice to work with. One thing I'd suggest is to stay small and take on the little jobs the big guys don't want. I've been doing this for two years part time and there's some goooood money in it. You also need to charge whatever it takes to stay in business and make money. In this area, I won't go less than $50/hour (for easy work) and a $100+/hour isn't unusual if you bid your jobs right. You also need to charge a minimum if the job won't take all day. On the real short jobs, I'll charge a $100 to show up plus the hourly charge once I'm there. Any less than this and I find I'm chasing my tail and not making money. The other key thing I've learned is customer service.

I'd say over half my jobs were given to me because I took the time to return their call promptly. I can't tell you how many times I've been told "you're the only contractor that would return our call". My experience has been if you hear that phrase, the project is as good as yours. The other part of customer service is to communicate with your customers.

Customers want to know what's going on and this is especially important if they live on site. If I have to leave for tools or parts I'll usually make a point to let them know so they aren't left wondering when I'll be back. Most folks seem to appreciate this. One last thing. Make sure to clean up all of your messes. If you're tires are leaving mud on paved roads or driveways, shovel and sweep things off. Little things like this go a long way with folks and they really appreciate it.

 

[KirkMcD]

</font><font color="blue" class="small">(
I'd say over half my jobs were given to me because I took the time to return their call promptly. I can't tell you how many times I've been told "you're the only contractor that would return our call". My experience has been if you hear that phrase, the project is as good as yours. )</font>

He's right. I was lucky if someone would actually come to my house just to give me an estimate to do any thing.
I could call ten places, two would call me back and one would actually show up for the estimate. At that point, I didn't care what it cost, he got the job.

 

[riptides]

Good point.

</font><font color="blue" class="small">( I'd say over half my jobs were given to me because I took the time to return their call promptly. I can't tell you how many times I've been told "you're the only contractor that would return our call". My experience has been if you hear that phrase, the project is as good as yours. The other part of customer service is to communicate with your customers. )</font>

And the flip side of this is when times are bad, your customers will remember the person that did the work. That gives you an edge.

-Mike Z. /forums/images/graemlins/grin.gif

 

[Indydirtfarmer]

Some further thoughts.....

I started out with "borrowed" equipment belonging to my father. After a couple summers, I bought the equipment from him. My original investment was less than $7500. That was in 1974. It's hard to compare that to 2005 prices. I took off with an old pick-up, a home made trailer, a well worn old tractor, and a handfull of used impliments.

In todays world, you need safe, modern equipment to go out on the road, or work on someone elses property. One of my "mowing rigs" would set you back around $85000 in todays world. ($40,000 truck, $4500 trailer, $35,000 tractor, then you have license, insurance on the truck, chains, fuel tank, and some misc. small "stuff". That puts me on the job, with a 60 HP tractor and an 8' cutter.

Then you get into liability insurance, advertising, (You won't get enough work by word of mouth to keep that kind of equipment busy) cell phone, fuel, parts, Labor (if you employ help, but you have to pay yourself too...so there's labor cost, no matter what)

And the idea is not to pay for your equipment just as it completely wears out. You need to be salting some away for replacement cost of truck/tractor/trailer/mower/ect.

I charge $60 an hour for a 60 HP tractor with an 8' nmower. there's a 2 hour mininmum. I also charge $1 a mile for any travel beyond 10 miles from the shop. I also have a 130 HP tractor with a 15' bat-wing mower. It gets $185 an hour with 4 hour minimum, and the same milage charge. With a "filled schedule" I can plan my jobs where I go from one to the next closest one, without a lot of travel time. In a typical 50 hour work week, I average 42 hours of "billable time".

I have a long client list that includes a few very large commercial real estate brokers. I have to take whatever they give me. Some are jobs that I'd just as soon pass on. Gotta take the bad with the good......

With all of that, I keep both tractors, and one employee running almost continuously throughout the summer months. 5 to 6 months out of the year, the equipment sets....except for the 3 or 4 days of snow removal work.... You have to make enough to carry the down time. I keep my employee on all winter. We overhaul equipment, paint everything that needs paint, and do shop work. I have to make enough to cover that "lost labor".

With fuel prices climbing steadily, I'm about to raise my rates. If my competition DOES'T, I loose work. (And there is all sorts of competition out there)

Bottom line....Lace 'em up tight! It's a rough fight.

Good luck! John

 

[EastTexFrank]

I hate to say this but with some of the prices quoted in this thread, you'd starve to death in Texas. There's just too much competition from part timers trying to offset their own equipment costs to charge those kind of rates.

 

[Indydirtfarmer]

Good thing I don't live in Texas, HUH!?!?!?! That is the going rate around here. I get all the business I need or want presently at those prices. With the size of equipment, it breaks down to around $16 per acre for what I do. That is pretty much "standard pricing" amongst my competitors and myself. I don't see how anyone can run much cheaper than that.....With equipment cost, fuel, and insurance being about the same nationwide, the mowing contractors in Texas must be hurting.....

If I can't make decent money doing what I do, you'll find me at home.....I don't work for free. John

 

[rdln]

It all depends on where you are and who needs stuff done. Near me you can pocket $1000 a day with a 5 footer. These subdivisions with empty lots next to 3500 Sq ft houses and sod lawns have local government that will fine per diem for having noxious weeds growing over 8in tall. This is not personal experience, the best I have done is $500 for brushog, minus the new trans cover and 5 gal of hyd. oil, that #$%$#%% rock.

 

[Phils]

It's already been said, but I want to repeat it as it is important. When I first started in my own business (8 yrs ago) I was given a rule for success, and it has proven 100% correct.

RETURN ALL PHONE CALLS

Just as the previous poster said, I've gotten business where I've had higher prices but returned phone calls in a timely manner. These days the same goes for emails (at least in my business, maybe not so much in yours).

I even return calls to people I don't want to talk to, nor want their business. I might politely steer them to my competition, but I for sure call back.

The other excellent contributor to success is getting your name in front of people needing your service. Advertising can be expensive, but NOT advertising can be more expensive. You gotta get them to call you, and I know of at least one person in a similar business that won't accept a call ("he's on another line") just so that he'll be able to make that return call and hear "I'M SO GLAD YOU CALLED ME BACK".

Phil

 

[NathanielJeep1]

Thanks for the help yall. Sorry it took so long to replay, my semester just started and I had an interview for a part time job where I set my own schdule, so that will help me save up some money. I still haven't had time to talk to a cpa so I haven't learned much more about taxes. I am trying to also get a job with a current company but the only places that are hiring want 2+ years experience running heavy equipment (not just a regular tractor). So pretty much what I am saying is I am gonna put this off till I have more money saved up(so I don't have to take any loans) and am out of college so I have the time. I do however still plan to buy the truck now. Again, thanks yall for the help, I am going to print this thread out and keep it for future reference.
Ohh and John, some help over the summer? /forums/images/graemlins/wink.gif