Starting A Tractor Work Side Business with Ford 8N or 9N

[LD1]

Part of the problem with America today is that you are discouraged to try to take on something ambitious unless you have lots of shiny new equipment, a big insurance policy, registered company, and charge big rates.

I've found being motivated and hard working to be much better traits for getting things done. If you have older equipment, you become resourceful in learning to fix it. I've done plenty of "side" jobs with undersized and old equipment - took a lot longer to get done than if I had something better, but I put the time in and got the job done, and got satisfaction from it. And after years of doing this, I've finally made enough money to have new and nice equipment. I still don't charge what others do, and I do just as well of a job, or better, than the other guy.

When you start hearing the "professionals" talking about the cost of transporting their equipment, and all the insurance costs, and cost of the equipment...you can plan on them probably overcharging their customers. Yes, these costs exist. But nowhere near the extent they'll tell you. I mean really, how much does it cost to chain a tractor down to a trailer...drive it across town...and unload it to do a job? Maybe $10 in fuel? A $1,000,000 general liability policy is $1500 a year. Workers comp insurance only exists if you have others working for you.

I like to see initiative...I know you decided not to spend on the tractor now, but I think you could have made a go at it. The tractor still has value when you are done.

I dont think anyone is trying to be discouraging. Rather just stating that there is more to it than some "joe-blow" loading a tractor on a trailer and working for profit.

There are alot of fixed costs like insurance. Sure, it isnt super expensive. But its a MUST if you do work for hire.

Too many people forgo insurance because they want to save a buck, or think that nothing will happen to them. Skipping these important things, then going out there and undercutting the guys that are trying to make a living is a great big PITA for anyone that does this for a living. It drives costs down. The whole point of doing this is to make a reasonable profit....and when guys with cheap tractors, no insurance, and no clue what the cost of doing business is ruin the market for everyone.

It cost me about $20 for every hour my tractor is running.

My truck cost me about $20 for every hour my tractor runs as well. (this is based on how many hours I work my tractor per year, and how much I use my truck for business but over the last 3 years average it is $20/hr)

That makes my cost of doing business $40/hr.

So I charge $75/hr and honestly dont think that is enough.

So when i see someone with an old N-series working for $30/hr it is annoying. They think they are making out great. But they honestly have no clue their cost of doing business. I guess they like working their equipment, bushhogging in miserable conditions, for minimum wage or less. But all they see is $30/hr and think they are doing great because its more than their day job....if they have one.

 

[LD1]

Yup. He’s smooth. I didn’t watch the whole thing as I wasn’t interested but I’d give him a job on my sales team. LOL

I tried. The editing every 15 seconds was annoying. I quit watching after 2 min. He is certainly wrong about the "easy money" part though

 

[Big Barn]

I tried. The editing every 15 seconds was annoying. I quit watching after 2 min. He is certainly wrong about the "easy money" part though

His commentary was of no interest to me.

It was just my opinion that he was a good salesman. (Voice wise not content )

And I agree on your previous post. There’s a professional business approach and then there’s the ones undercutting reasonable prices , and think they’re doing well until the first “issue” they encounter. Then it’s time to change the phone number in their Craigslist ad and hope the last customer didn’t note their license plate number.

 

[Jstpssng]

I worked as a forest consultant for 10 years. My biggest expenses were transportation and motels, as I was out of town more and more as I got into it. Despite the fact that I was mostly selling a service, I estimated that about 1/3 of the money I took in was mine, compared to working for somebody else. Besides the insurances, you also are paying twice as much for Social Security taxes; your share and that of the employer. I guess that you could get out of that by working under the table but I always felt that taxes were part of the price of doing business, and if I couldn't afford to pay them then I wasn't making enough money.

 

[LD1]

I worked as a forest consultant for 10 years. My biggest expenses were transportation and motels, as I was out of town more and more as I got into it. Despite the fact that I was mostly selling a service, I estimated that about 1/3 of the money I took in was mine, compared to working for somebody else. Besides the insurances, you also are paying twice as much for Social Security taxes; your share and that of the employer. I guess that you could get out of that by working under the table but I always felt that taxes were part of the price of doing business, and if I couldn't afford to pay them then I wasn't making enough money.

I assume the ones i refer to undercutting everyone, no insurance, etc are also not paying taxes. Or that they somehow feel good about justifying enough write-offs and depreciation for their 90% personal and 10% business tractor that they end up paying no taxes at all.

Even using my formula for my MX.....if I had an 8n instead....

you are still looking at ~$10/hr if you actually service it. ($5/hr of that is fuel)

And then the wear/tear services, tires, etc on a truck and trailer. Sure you can get by will something less than my 1-ton and GN combo. But still....$10/hr is reasonable

So $20/hr or so. But the problem is many do NOT account for the "unrealized" costs. They dont factor in the cost of tires, or doing oil changes etc because it also doubles as a personal use piece of equipment.

So when they are out their feeling good about charging $35/hr.....they dont seem to realize they are making $15/hr at most.

I just dont understand logic. I am all for someone having their own business and making money at it. But you HAVE to be above board and realistic. Its not just having a tractor and making some quick beer money. You have to account for all aspects and expenses. Those that dont....screw the guys trying to make a living at it. BUT, fortunatally, they arent around long. In the 8 years that I have had my mowing business, I have seen many come and go. I have lost a few customers for a year at a time due to the "beer money" mowers that think there is a huge market and they can do it soooo much cheaper with their junk equipment and run everyone else out of business. They are foolish and soon realize it. Cant tell you how many customers I get that initially hired someone else (cheaper) but they never show because of equipment issues, or break on the job and never come back to finish and the customer cannot get ahold of them.

Or the calls I get wanting a quote, and I quote something like $200 for a 4 acre job 30 minutes away and they gasp because "we had a guy do it last year for $75". Yea....well then call him not me. Oh thats right, he aint doing it no more because he either realized he was loosing money, or his junk broke.

I guess what I am saying is if you are gonna do it.....do it right. Dont half @$$ into it and screw everyone else.

 

[Fallon]

I dont think anyone is trying to be discouraging. Rather just stating that there is more to it than some "joe-blow" loading a tractor on a trailer and working for profit.

There are alot of fixed costs like insurance. Sure, it isnt super expensive. But its a MUST if you do work for hire.

Too many people forgo insurance because they want to save a buck, or think that nothing will happen to them. Skipping these important things, then going out there and undercutting the guys that are trying to make a living is a great big PITA for anyone that does this for a living. It drives costs down. The whole point of doing this is to make a reasonable profit....and when guys with cheap tractors, no insurance, and no clue what the cost of doing business is ruin the market for everyone.

It cost me about $20 for every hour my tractor is running.

My truck cost me about $20 for every hour my tractor runs as well. (this is based on how many hours I work my tractor per year, and how much I use my truck for business but over the last 3 years average it is $20/hr)

That makes my cost of doing business $40/hr.

So I charge $75/hr and honestly dont think that is enough.

So when i see someone with an old N-series working for $30/hr it is annoying. They think they are making out great. But they honestly have no clue their cost of doing business. I guess they like working their equipment, bushhogging in miserable conditions, for minimum wage or less. But all they see is $30/hr and think they are doing great because its more than their day job....if they have one.

That's what I was hoping to convey previously. There is a lot more to it than just getting a cheap old machine & making/charging $40/he. I put in at least a third more time, probably way more doing quotes, maintnance, accounting, etc. Compared to the hours I'm operating or hauling.

A good chunk of that overhead is fixed, so working more hours makes it less of a factor, but maintnance is not. Personally I'm working the very low end of hours to be financially viable. If I needed the money for more than nice toys (a nice tractor), I'd be working a lot more. A couple hundred hours a year after overhead pays the bills for what was a new $45k tractor, a truck, trailer & impliments. I have maintnance costs, but not really repair costs as it's still under warranty for now. But that will change in a few years (coincidentally at the same time the tractor payment goes away).

If I can not loose money only working a side hustle, somebody motivated should be able to do way better as their main job. A bit of an outlay up front, but you can finance stuff. Financing isnt always the smartest decision, but is often very valid & necessary.

Another thing to remember is this type of work is usually seasonal. Nobody needs me mowing in the middle of winter. Way fewer driveway jobs too, which is good as working in the mud works poorly for me & the results. Plowing snow is way less consistent or income. I could market more to offset that seasonal downturn, but quite frankly I don't need to or care to.

By all means show initiative & start your own business & be productive. But there are often aspects you don't expect or budget for. I had a large learning curve starting my side gig. But i could afford the tuition in the school of hard knocks as i learned. Putting your life savings in, making a mistake & especially not having insurance could bankrupt somebody.

I hit a phone junction box buried in the grass. I think insurance ended up paying out $7k to the phone company. That would have put me in the red for the year. And honestly that bill could have been a lot worse. When you are talking about putting everything you have into an old 8n, that would probably have bankrupt some people. Makes the $850 a year insurance payment really easy to stomach these days.

 

[lennyzx11]

I worked as a forest consultant for 10 years. My biggest expenses were transportation and motels, as I was out of town more and more as I got into it. Despite the fact that I was mostly selling a service, I estimated that about 1/3 of the money I took in was mine, compared to working for somebody else. Besides the insurances, you also are paying twice as much for Social Security taxes; your share and that of the employer. I guess that you could get out of that by working under the table but I always felt that taxes were part of the price of doing business, and if I couldn't afford to pay them then I wasn't making enough money.

That is similar to the plan I used for years. Had two successful businesses with it also.

Every estimate/bill was figured this way.
1/3 rd went to the business.
This paid overhead.
1/3rd went to the equipment. Fuel, maint, upgrades, etc.
1/3rd went to me. Wages.

Watched for any write off as that was always the best recoup on profit as keeping money is easier than making it!

Be honest and upfront with each and every customer.

That is something I’ve noticed slipping these years. Maybe I’m starting to get old....
“GET OFF MY YARD!”

 

[GeneV]

...BUT, fortunatally, they arent around long. In the 8 years that I have had my mowing business, I have seen many come and go. I have lost a few customers for a year at a time due to the "beer money" mowers that think there is a huge market and they can do it soooo much cheaper with their junk equipment and run everyone else out of business. They are foolish and soon realize it. Cant tell you how many customers I get that initially hired someone else (cheaper) but they never show because of equipment issues, or break on the job and never come back to finish and the customer cannot get ahold of them...

You could just lead with this. One of two scenarios play out. The likely, somebody undercutting established businesses (with their overhead) soon realizes why the going rate for work is what it is, and his rate goes up because he accumulates same overhead. Or, less likely, he figures out a way to keep overhead low while maintaining business.

 

[Jchonline]

Quite simply dont do it. It is not worth the hassle. Get the tractor if you want but I would not do any commercial work with it. Grade a drive for a friend and barter for something sure. Commercial these days is a bad idea.

 

[LD48750]

I would not consider commercial work with a tractor lacking a ROPS. People call contractors when they want a tough job done.

My 2N is 70+ years old & it hasn't rolled over & killed anyone yet.
I have been working it on hilly ground for the last 20+ years and I never felt the need for a ROPS.
I wouldn't even guess at the number of tractors working every day without a ROPS .
If you use just the minimum of common sense operating a N tractor, it will serve you well safely.


I just love all these "cost of doing business" posts.
My 2N cost me about $1200 20+ years ago.
Thats around $.16/day or less then $.0075/Hr.
I haven't put $1k in repairs in it in all those years.
2 finish mowers, bush hog, & york rake = about $1k
Yes I have used some gas & oil over the years but we are still under $2/day cost of ownership for ALL OF IT.

Question to all these people with insurance that are NOT using their equipment to make a living, how many times have you used that insurance?

For what the OP wants to do, I see no problem.
*IF* he expands to a real business..... that is a whole different program.