Acreage Services bussiness idea

[204saskman]

So im thinking of starting to do some side work doing acreage services. Its just an idea that im tossing around as there is a bit of work around and im willing to drive a bit for work too. Now im just not sure if there would be money in it for a person. I maintain all of my own equipment and im pretty handy with pretty well anything around the farm. Just want some thoughts and opinions from others that might have tried or still are going at it. Also wondering what to charge? There is a guy doing the same thing about 2.5 hrs from me and he's charging 70/hr plus milage and fuel and damage(flat tires and equipment damage) and he seems to be busy. Like i said, any input would be good.

Thanks

 

[Iplayfarmer]

Charging for damage seems like overkill. If your tire has been wearing out for years I shouldn't have to pay for it just because it happens to finally blow when you are doing my job. I would think that should be built into the overall cost of the service.

I'm sure rates are variable depending on region. $70/hr seems a bit high compared to what I've seen, but lots of things are cheap here. It really comes down to some number that is more than what it's worth for you and less than what it's worth for the other guy.

 

[204saskman]

Charging for damage seems like overkill. If your tire has been wearing out for years I shouldn't have to pay for it just because it happens to finally blow when you are doing my job. I would think that should be built into the overall cost of the service.

I'm sure rates are variable depending on region. $70/hr seems a bit high compared to what I've seen, but lots of things are cheap here. It really comes down to some number that is more than what it's worth for you and less than what it's worth for the other guy.

Ya i know about the tire thing, but he cant help that hes working on ur property and wrecks a tire from a chunk of rebar or a old box of nails u left laying around. But you have to remember, prices for stuff here in canada are alot higher that in the US. You can buy tractors for thousands less than us. We kind of get screwed on stuff up here. I kinda thought 70 was a bit high, i figured 60ish as a good figure. A person has to remember too that implements and tractors are not cheap. Im pretty sure thats why he charges 70/hr. Like i said it was just a thought as i would like to put my implements and tractor to use if i can, i have a trailer and a 1 ton to pull it all.

 

[moored4]

Charging for damage seems like overkill. If your tire has been wearing out for years I shouldn't have to pay for it just because it happens to finally blow when you are doing my job. I would think that should be built into the overall cost of the service.

I'm sure rates are variable depending on region. $70/hr seems a bit high compared to what I've seen, but lots of things are cheap here. It really comes down to some number that is more than what it's worth for you and less than what it's worth for the other guy.

This is what I did when I figured my hourly rate for doing the same thing your planning.

Call several local tractor rental places and find out what their half and full day rate is for rental on a unit like the one you have plus attachments

Next figure what your time is worth per hour. Then added that to the rental
rate.
That is what I'd have to charge! :thumbsup:

Then You have to decide about - travel time, extra implements, damage, Insurance, If its hunting/ time away from family, cause most of these type of jobs fall on the weekend / fishing season, Do you want to be getting seat time or out doing something else.
---------------------------------------------
lets just say

ï½½ day rental(4 hours) 165.00
My time $20.00Hr.
Insurance for 6 months $227.00/divide by 6 = $37.50 divide by4 weekends a mounth = $9.37 maybe 2 jobs a weekend so thatç—´ $4.69 a job. Is the insurance, fuel, ect part of the rental rate or a surcharge.

$165+($20x4)=$240+$4.69 + $244.69 for a half day rate. Now sit down and figure if you would spend that if you didn稚 have a tractor!

Good luck! Oh by the way! I'm going fishing this weekend! I won't be your competition!

 

[smstonypoint]

I'm not sure what you mean by the term "acreage services." Are you talking about mowing? Tillage? Etc.?

The folks at Iowa State survey farmers to determine the rates they pay/receive for custom machine operations.

http://www.extension.iastate.edu/agdm/crops/pdf/a3-10.pdf

Note that there is considerable variation in rates for particular operations. For example, the rates for mowing CRP/pasture land ranged from $6 to $25/acre, and the rates for mowing fences rows and ditches ranged from $20 to $100/hour.

Much of that variation is likely explained by the competition and customers in a given area.

IMO, you should get a good idea of what your costs (variable and fixed) would be in providing "acreage services."

Steve

 

[204saskman]

I'm not sure what you mean by the term "acreage services." Are you talking about mowing? Tillage? Etc.?

The folks at Iowa State survey farmers to determine the rates they pay/receive for custom machine operations.

http://www.extension.iastate.edu/agdm/crops/pdf/a3-10.pdf

Note that there is considerable variation in rates for particular operations. For example, the rates for mowing CRP/pasture land ranged from $6 to $25/acre, and the rates for mowing fences rows and ditches ranged from $20 to $100/hour.

Much of that variation is likely explained by the competition and customers in a given area.

IMO, you should get a good idea of what your costs (variable and fixed) would be in providing "acreage services."

Steve

Ya i was thinking of doing mowing, tilling, fencing, etc. I have a fair bit of experience building barb and temp and permanant fence for guys. Im just looking at something as i would like to get doing something for my self. Im just sick of working for the "man" and making him money. I used to be a contract operator and there was way more money in that then being a company man. Its just an idea im thinking about. As for price, i have looked at what others charge around here and it all depends, small comapnys charge by the job and others charge by the hour. i would personally charge by the hour as you can estimate roughly but u never know for sure. Thanks for some ideas and keep them coming.

 

[Iplayfarmer]

I'm glad other posters brought up insurance. I looked into it a while back... doing the occasional odd tractor job to get some spending cash, etc. It didn't pencil out when I included insurance, and I don't dare charge without it. I was only looking to do a few jobs on the occasional weekend. I'd have to do more than I wanted to just to break even.

 

[204saskman]

I'm glad other posters brought up insurance. I looked into it a while back... doing the occasional odd tractor job to get some spending cash, etc. It didn't pencil out when I included insurance, and I don't dare charge without it. I was only looking to do a few jobs on the occasional weekend. I'd have to do more than I wanted to just to break even.

Well i already have some coverage on my tractor(liability,damage, replacement cost) if anything was to happen. I have had this since the tractor was new. It was only 15 bucks a month. Now i will say that if i did end up doing this, I would probly consider uping my coverage to a higher amount but for what i do now i didnt need more. Like i was saying, im just tossing the idea around. Im sick of working for someone else making them money and new getting furthur ahead. As stated, im just looking at options, as i would like to be my own boss again. I have worked away from home for the last 8 years and its not worth being 14 hours from home for. Not when im sure i could make money closer to home.

 

[moored4]

Well i already have some coverage on my tractor(liability,damage, replacement cost) if anything was to happen. I have had this since the tractor was new. It was only 15 bucks a month. Now i will say that if i did end up doing this, I would probly consider uping my coverage to a higher amount but for what i do now i didnt need more. Like i was saying, im just tossing the idea around. Im sick of working for someone else making them money and new getting furthur ahead. As stated, im just looking at options, as i would like to be my own boss again. I have worked away from home for the last 8 years and its not worth being 14 hours from home for. Not when im sure i could make money closer to home.

I have all the normal coverage like you but when it becomes a commercial thing the normal coverage WON'T cover it and probable has stated exclusion. Just saying to check it out! Hope it works for you cause I know what you mean about working for the man!:thumbsup:

 

[smstonypoint]

Well i already have some coverage on my tractor(liability,damage, replacement cost) if anything was to happen.

Just a thought. My tractor is insured, but only when on my property. It would be a good idea to check with your insurance agent on your coverage if you decide to go into the "acreage services" business.

Good luck.

Steve

 

[dmccarty]

You need to figure out your expenses first. Cost of the tractor, implements, taxes, trailer, truck, FUEL, license, insurance, oh, yeah what YOU want to earn.

The cost of all of the above is a lot of money or little money depending on how you look at it. If you divide out the expenses on an hourly basis it is likely to be a small amount of money. On the other hand, you have to guess how many billable hours a week you be able to work. If you can only work a few hours a week either because of your own time limitations or lack of work then the small amount of money in expenses might be a bit larger looking.

You also have to factor in replacement costs of the tractor, implements, truck, tractor, etc as well as maintenance charges. Keeping the equipment working is not a billable directly but your time working on the equipment has to be included in your hourly rate.

The two policies I have had for my tractor only covered the equipment when I was NOT doing work for hire. If i was billing I needed a new policy. This is also true for the truck insurance.

Later,
Dan

 

[Iplayfarmer]

There are many aspects to tossing this idea around. I don't mean to get totally off on insurance, but keep in mind insuring your tractor is not really the concern. It's insurance against what your tractor will do to someone else's stuff. When that guy conveniently forgets to tell you about the shallow buried phone line going through the garden spot he's asked you to plow it won't matter whose fault it is. It was your machine that did it. You have to fix it. Same thing goes if you spray weeds on a calm day and the wind suddenly comes up and blows your 2-4-D onto the other neighboor's strawberry field.

 

[smstonypoint]

Another thought.

I don't know anything about the federal/provincial income tax system in Canada. But if comes anywhere near matching the complexity of the US system, it would be worthwhile to find a competent tax accountant.

Steve

 

[204saskman]

Just a thought. My tractor is insured, but only when on my property. It would be a good idea to check with your insurance agent on your coverage if you decide to go into the "acreage services" business.

Good luck.

Steve

Yep i did check with them thats why i stated what i wrote earlier. Im covered as i was renting my tractor to my neighbour for clearing out his barn and stalls so i put the extra coverage on it. If i did end up doing this, i would probly switch it to more of a commerical policy in which my insurance broker told me to do when im on multiple properties. He told me that it would probly go up a bit but not that much, it would only really go up if i insured my impements for theft and such. But like i said not sure if there is going to be enouh demand but its just something im looking at.

 

[204saskman]

You need to figure out your expenses first. Cost of the tractor, implements, taxes, trailer, truck, FUEL, license, insurance, oh, yeah what YOU want to earn.

The cost of all of the above is a lot of money or little money depending on how you look at it. If you divide out the expenses on an hourly basis it is likely to be a small amount of money. On the other hand, you have to guess how many billable hours a week you be able to work. If you can only work a few hours a week either because of your own time limitations or lack of work then the small amount of money in expenses might be a bit larger looking.

You also have to factor in replacement costs of the tractor, implements, truck, tractor, etc as well as maintenance charges. Keeping the equipment working is not a billable directly but your time working on the equipment has to be included in your hourly rate.

The two policies I have had for my tractor only covered the equipment when I was NOT doing work for hire. If i was billing I needed a new policy. This is also true for the truck insurance.

Later,
Dan

Well like i was saying before, im fairly mechanically inclined, i maintain all of my vehicles and my neighbours equipment too(mainly diesel). As for expenses, here is kind of a break down.

Tractor payment = 300/month( i pay this regarless)
Truck payment = 0.00(paid it off long ago)
Trailer payment = 0.00(paid off)
Truck insurance commercial policy = 130 month
Tractor Insurance comercail policy = 80 month with 2 million liabily/damage/disability/replacment
Trailer insurance = 10/month
Fuel(aprox) = 1500/ month(tractor will be burning purple,truck clear)
Maintenance truck and trailer and tractor = 600/month
misc = 750/month

I dont know, maybe im a bit off. so say 2500-3000 month to run everything. But there is also consideration that there is a decent market for bussiness if a guy wants to make the effort. Like i said its kinda a thought at the moment, its either that or just keep working for the man. Thanks for the advice so far guys and keep it coming

 

[dmccarty]

Using the $3,000 a month in expenses and you have 160 billable hours a month, four weeks with 40 hours a week, then you have to charge $18.75 per hour to recoup you expenses.

On the other hand if you only had 16 billable hours a month, you have to charge $187.50 per hour make your expenses.

You also have to charge money to replace the truck and tractor at some point. That needs to be included in your expenses.

And how much are YOU going to earn?

Also do not forget health insurance, TAXES, any permit/license fees, retirement, hiring an accountant, advertising, vacation and sick days.

I think the hard part in running a small business is getting it off the ground to the point that you can get close to 160 billable hours a month, at a price per hour to make a living.

Later,
Dan

 

[Iplayfarmer]

You could try to start out small time first. Keep working for the man, but do your own thing evenings and weekends until you just don't have time to keep your day job. I agree with dmccarty, the tough part is building the business so you have the money coming in.

 

[grsthegreat]

I do work with my tractor around my area and for my homeowners association. I have commercial policy cause of my main line of business. It doesn't add to much to the price over what it cost to cover the tractor anyways. Most homeowner policies don't cover replacement value of tractors....something i found out. but for additional $150/yr, i get full replacement coverage. pretty cheep.

as far as what to charge, thats easy. call around to others doing the work, and charge THE SAME. don't do what some people do and charge less. this starts a bidding war and everyone looses out in the end.

Do it for a year, keep track of all expenses and do the numbers. I did the same thing years ago when i started my electrical contracting business. I keep track of every penny i spend to manage the profit line. This is the only way to find out.

In those cost you posted..i didn't see maintenance costs. there going to add up as you add hours to the tractor and truck. I don't haul my tractor on a trailer to work, just around my area. Once you start hauling, then the hauling vehicle needs commercial coverage also (your charging for your service). ADDS ALOT TO YOUR PREMIUMS. thats something i found out the hard way.

My problem here, is there alot of nuts running their tractors for 25-35/hr to do the work. They are LOOSING money in the long run. The professional equip operators generally run at 75-100/hr. They know how to figure in overhead, repairs,ins,fuel Plus labor. $25 an hour might seem nice if a person is making 10/hr now, but figure in all the costs, you might be in for a shock.

Now, if others are getting $50-75/hr......go for it. Heck, ill bring my tractor up and join you :laughing:

 

[204saskman]

I do work with my tractor around my area and for my homeowners association. I have commercial policy cause of my main line of business. It doesn't add to much to the price over what it cost to cover the tractor anyways. Most homeowner policies don't cover replacement value of tractors....something i found out. but for additional $150/yr, i get full replacement coverage. pretty cheep.

as far as what to charge, thats easy. call around to others doing the work, and charge THE SAME. don't do what some people do and charge less. this starts a bidding war and everyone looses out in the end.

Do it for a year, keep track of all expenses and do the numbers. I did the same thing years ago when i started my electrical contracting business. I keep track of every penny i spend to manage the profit line. This is the only way to find out.

In those cost you posted..i didn't see maintenance costs. there going to add up as you add hours to the tractor and truck. I don't haul my tractor on a trailer to work, just around my area. Once you start hauling, then the hauling vehicle needs commercial coverage also (your charging for your service). ADDS ALOT TO YOUR PREMIUMS. thats something i found out the hard way.

My problem here, is there alot of nuts running their tractors for 25-35/hr to do the work. They are LOOSING money in the long run. The professional equip operators generally run at 75-100/hr. They know how to figure in overhead, repairs,ins,fuel Plus labor. $25 an hour might seem nice if a person is making 10/hr now, but figure in all the costs, you might be in for a shock.

Now, if others are getting $50-75/hr......go for it. Heck, ill bring my tractor up and join you :laughing:

Ya i put in 600 for maintainace. I can do pretty much all repairs myself as i have done repairs for years on my truck since new and on my previous tractors and others i know. When i was younger i worked for a Service shop and got 2.5 years of mechanics and 2.5 years of welding aprenticship. I was going to end up switching to heavy duty but the shop i was suppose to go work for was friends with my old boss and he was mad that i didnt want to work for him so i kinda went a different direction. I did some calling around to some smaller landscaping companies and a few of the other "acreage service" companies. Landscapers charge by the job for residential and hourly comercial with a minimun charge. But the other serivce companies charge anywere from 55-80 hr(some had bigger equipment and inlcuded fuel and others didnt include fuel). When i talked to my broker(insurance) my comercial policy for my truck added 400 year to my 1000 year insurance. The tractor package was around 80 month on its own with 17g replacement(i didnt ask for inurance on my implements as it was expensive). I realize the costs involved and the overhead, I used to be a contract field operator for 6 years in oil and gas. I paid for fuel and repairs and my truck stuff all the time. 2 years ago i spent 44g on my truck between fuel and payments and everything else. I have a good accountant and they are very reasonable for corperate taxes. Coperate taxs in canada are fair compaired to the US(like 16% and then gst 5% and pst 5%). But when i contracted before i always got a return from the goverment each tax year.

 

[grsthegreat]

Ya i put in 600 for maintainace. I can do pretty much all repairs myself as i have done repairs for years on my truck since new and on my previous tractors and others i know. When i was younger i worked for a Service shop and got 2.5 years of mechanics and 2.5 years of welding aprenticship. I was going to end up switching to heavy duty but the shop i was suppose to go work for was friends with my old boss and he was mad that i didnt want to work for him so i kinda went a different direction. I did some calling around to some smaller landscaping companies and a few of the other "acreage service" companies. Landscapers charge by the job for residential and hourly comercial with a minimun charge. But the other serivce companies charge anywere from 55-80 hr(some had bigger equipment and inlcuded fuel and others didnt include fuel). When i talked to my broker(insurance) my comercial policy for my truck added 400 year to my 1000 year insurance. The tractor package was around 80 month on its own with 17g replacement(i didnt ask for inurance on my implements as it was expensive). I realize the costs involved and the overhead, I used to be a contract field operator for 6 years in oil and gas. I paid for fuel and repairs and my truck stuff all the time. 2 years ago i spent 44g on my truck between fuel and payments and everything else. I have a good accountant and they are very reasonable for corperate taxes. Coperate taxs in canada are fair compaired to the US(like 16% and then gst 5% and pst 5%). But when i contracted before i always got a return from the goverment each tax year.

our taxes for self employed SUCK rocks.

sorry, didn't see the maintenance costs...now i do. if others get by charging $50+..so should you. Alot of small guys here are only charging 25-35 per hour (equip,fuel and manpower) and THINK there doing OK. If you can get that much better rates up there, id say GO FOR IT...but like others say. don't quit your day job. Work into it.

my commercial policy cost me 4X the cost of my residential insurance policy....then again it includes a $600,000 liability and a $2,000,000 gross causality rider. But this gives me commercial coverage on all my stuff, and the tractor is listed under my company umbrella.