Getting Philosophical: The paradox of the one-person business
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John White
Gold Member
AS you and others do, I also have a one man band. Just me. What works for me probalby wont work for others, but I can still give you my thoughts and experience and I have pretty well run the equipement circle in trying to find the perfect machine and set up. Many like you and me are trying to stay away from a CDL and the big eqipment because of cost of inurance and other expense. I got started when I was bulding my own house about 12 years ago and had other property that needed developing, and was on a tight, tight, tight budget and any wrong purchase would be devestating. I needed some or should say alot of small dozer work done. I had a couple of contractors out they did some dozer work but I wasnt satisfied. One had my water running up hill. I run across a very small dozer (I am aware of the money pits.) It needed some neglected repairs and maintaince. (I paid 7K for it) I started using it and doing my own work. It wasnt long before people were asking me if I could come over (after my full time job) after 5. or on a Sat. and do a small job for them. (I already had a little 350 Ford dump and a trailer to haul my tractor) Sure why not, make $75 or $100. for a hour of work. Thats all they needed and to call a contractor with a JD or Case 450 was at least $200. I begin to find a nitch that I thought I could help pay for my dozer) I was approcahing the retirement age any my present job was getting harder to do. (I was already self employed. But this dozer work and excavation was all new to me. We all have to start some where and most want to start at the top. It wasnt too long and a private contractor who was in business for years installing septic systems, and pumping. He was having labor problems (hard to get reliable help, and taxes and ins. killing him) and he sew me using my dozer one day and stopped by and asked it I would be intersted in doing some work for him. All he had was a back hoe. He said after he got done installing a system, could I meet the inspector the next day, then close the system (doze it). That way he could move his crew on to another job and not tie up his hoe. I said yes, and this really worked out good for me and him too. A couple of jobs a week and I was paying for my dozer. This went on for about a year. I bought a skid steer to develop my own property and finish my house. I was approchaing the age to get my Socalist Security and was thinking did I want to get a job and be a "greeter with a smile" (I dont smile much) at Wal-mart or prusue the excv. work. After seeing I had a skeed steer and I had worked with him for a year, I was dependable and he didnt have to pay all the taxes and ins on me. He said asked if I would be intersted in using my skid steer also and he was thiking about just letting a couple of his men go and do what he and I could do. This sounded pretty good to me but I knew that I was at a age that the shove and ditch work would be hard on me. I took him on and he made more money than he ever made. (no taxes, no complaing from employees, no ins) He bought a new back hoe (I bought his old one because the dealer wouldnt give him much on it, it just have all the bells and whistles the new one had, but bassically in good shape, I paid 4K for it.) Things worked good for a couple of years. I picked up other jobs from him that he didnt want to fool with. ( and I had a N.H 1720 with a box blade and rake) So I usually picked up the job from the home owner of comming back after a month or so after ground settled and did the finish work. Things went pretty good until his books were showing a pretty good profit and a larger contractor offered his a price he couldnt refuse (he said). The new buyer was already involved and had a full crew that he could move around and extnsive equipment. So that left me with my dozer, as big back hoe, and my skid steer. First I learned that the back hoe was not practical for what I was doing. I did'nt have a big enough truck or trailer to move it and I wasnt going larger. Eevry time I needed it some where I had to drive it, then I couldnt get home or any tools or eqpt if I needed it. I thought a small track hoe would be more useful. I bought a 10k lb. Its hard to beat a track hoe when it comes to digging and a skid steer when it comes to moving dirt. Things went pretty well for awhile, but I still felt I was not productive enough. Some one would call me to dig a ditch, I would haul the track hoe out and no time at all be done then they would want extra dirt or other spoils put on the back 40. So that ment loading up, back to the shop, load up the skid, and drive back to the job. (I sold the large back hoe to buy the track hoe. I got 8 K out of it, so I made a profit and I sold my dozer and made a good profit on it and bought another one) With the cost of fuel every penny counts and I was wasting too much time transporting equipement. I thought maybre a back hoe for my skid steer would be the soulition, since most of my digging is less that 6ft. I bought one, what a joke, all I did was get in and out all day long and move up a couple of feet and dig, (at my age it was killing me) Then if I had the hoe on and needed the bucket, I had to change. Then put the hoe back on to load it on my trailer.. Something had to be done. I was a one man band trying to play too many insturaments at one tilme. I did some thinking, sold the track hoe ( made a little on it) sold the skid steer with the back hoe) and bought a Earthforce EF4 (Bob cat B300) This is not the perfict set up but it is working pretty good and alot more productive. Sometimes I wish I had the track hoe and sometimes the skid steer..but 90% of the time I am happy with the EF4. I sold #2 dozer after painting it and fixing it up and made about2k profit, I bough #3 and had it for about 5 years , sold it the other day and bought a Mitsbushi BD2J 1998. The other dozers were 30 to 40 years old as Case, JD, Mf and AC have not made dozer for years (350) About a year ago EPA passed a law that regular leach fields are not legal in our county (big govt) making all new instillations go to a mound system (costing around 20K) and all installers must be bonded, licensed (state exam). (This law has put the new home bulding in a real slump along with other excv. jobs.) This along with the other regulations made me and most other contractors stop instaling septic systems. The libiality is just too great, they have alrady had problums with the mound system and law suits. And they are normally more than one person can do. So I had to inivoate and rethink about some of the work I would loose. I seen a old honey wagon in a farmers field. I bought it, took it off the running gears, bought a cab and chassis, painted it up real nice, got my septic pumpers license (oh yes you need a license to crap). And started picking up a few jobs. Any thing to keep peanut butter and bread on the table. So I hope this helps you sort out some of the decisions you have to make because being (green as Kremit the frog says) small, making the wrong move can be devasting. (So can old age as it creeps up on me, as I have to turn away jobs that require much shovel work and climbing out of ditches. )
Excellent, highly relevant story John. Right on target!John White said:
Thank you so much for taking the time to tell it. There are so many specific relavent points here that it would be difficult to comment on them all... at least all at once! You probably just saved me from making a half dozen (or so) serious mistakes... and also gave me at least a half dozen new ideas to follow up on.I find it interesting that you made money on virtually everything you bought and sold. I also find it interesting that you owned up to three major items of equipment at a time... but ended up somewhat dissatisfied with at least some of your purchases... and, at least occasionally, regretful about something you sold. I had to chuckle at the skidsteer backhoe attachment... mainly because it hit awfully close to home. I recently bid rather aggressively and high on a John Deere skidsteer/backhoe combo... which seemed very attractive since the skidsteer was near new and one of my favorite models... and the JD backhoe spec'd out even larger and stronger than my Bradco 509. Seemed like a perfect back-up or even to use as a primary machine in some cases. I lost the auction to a rather strange fellow with very deep pockets and seriously regretted the loss... up until your story appeared a few minutes ago!!!
Too many other good points to address right now... but I'll try to hit on them all as this thread moves on.
Dougster
Pete Milley
Bronze Member
Well Doug:
I also vote no on buying another machine this year. If you buy another now and it starts snowing, you will have 2 idle machines while you beat the @#$% out of your truck plowing. Snow doesn't usually disappear in a day or two so after plowing, everything sits idle while you repair your plow. If it doesn't snow, you may still be able to work the TLB you have, and not worry about an idle machine. Of course you already know all this. As a chess master once told me, "sit on your hands", you will avoid impulse (wrong) moves. See what the market will bear in the spring. I'll shut up now. Good luck.
Peanut butter anyone?
I also vote no on buying another machine this year. If you buy another now and it starts snowing, you will have 2 idle machines while you beat the @#$% out of your truck plowing. Snow doesn't usually disappear in a day or two so after plowing, everything sits idle while you repair your plow. If it doesn't snow, you may still be able to work the TLB you have, and not worry about an idle machine. Of course you already know all this. As a chess master once told me, "sit on your hands", you will avoid impulse (wrong) moves. See what the market will bear in the spring. I'll shut up now. Good luck.
Peanut butter anyone?
I've notice that even the most serious posts lately seem to always include some sort of reference to my struggling businessman's "poverty" diet.Pete Milley said:
Oh well... I suppose I deserve it! Your vote is hereby recorded Pete... but please don't get too hung up on the seasonal timing aspect of my question. If any purchase is to be made at all, it could easily take 3-5 months to occur and may have to occur in 2008 anyway purely for the tax benefits. On the other hand, if the ultimate giveaway deal of a lifetime suddenly appeared tomorrow, I would obviously be foolish not to take it.
Please wash seasonal timing out of your formula and, if necessary, vote again!
Dougster
LoneCowboy
Veteran Member
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Dougster said:But until my move to New Hampshire and subsequent purchase of a dump truck able to move a small dozer or mega-skidsteer... whatever I would add at this time would have to be in the roughly 7,000 to 7,500 lb class... or perhaps slightly larger if I traded up my equipment trailer to a 12K. The smallest dozers and mega-skidsteers of which I am aware would require at least a 14K trailer and... according to one honest dealer... would likely be legally overweight even with a 14K trailer.
Dougster
While realizing that Mass is different from Colo.
I have a 3/4 ton Chevy 2500HD. I tow a 14k gooseneck trailer with a 9k lb tractor on it about every day.
perfectly legally and safe.
LoneCowboy
Veteran Member
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Ok
I think you should go bigger.
Sure, there are some smaller jobs, but it takes a LOT of smaller jobs to equal one bigger job.
I can mow a bunch of little 1 acre lots, and make good "profit", but unless I can book 4 or 5 a day, I'm not making any revenue.
Or, I can get a 10 to 20 acre lot and do just one in a day and make the same "money" and show a lot more revenue. one customer, one billing, one trip out and back.
Plus bigger machinery (except Dozers) is cheaper to run maintenance wise (longer intervals, etc) (although when it breaks, it's ugly, I feely admit)
I see lots of guys with backhoe services. Almost all of them have real backhoes (occasionally a small tracked excavator). You might have a good niche here, but if you want to stay busy (and above water) bigger jobs is how to do it.
Boy, i wish we had a business forum (HINT)
I think you should go bigger.
Sure, there are some smaller jobs, but it takes a LOT of smaller jobs to equal one bigger job.
I can mow a bunch of little 1 acre lots, and make good "profit", but unless I can book 4 or 5 a day, I'm not making any revenue.
Or, I can get a 10 to 20 acre lot and do just one in a day and make the same "money" and show a lot more revenue. one customer, one billing, one trip out and back.
Plus bigger machinery (except Dozers) is cheaper to run maintenance wise (longer intervals, etc) (although when it breaks, it's ugly, I feely admit)
I see lots of guys with backhoe services. Almost all of them have real backhoes (occasionally a small tracked excavator). You might have a good niche here, but if you want to stay busy (and above water) bigger jobs is how to do it.
Boy, i wish we had a business forum (HINT)
The bigger the state, the bigger the backhoes!!!LoneCowboy said:
Once I move out of Taxachusetts, I absolutely WILL own a full-size commercial backhoe. But for the next two years, whatever I own needs to fit on a 10K or maybe 12K trailer. The comparison of (primarily) residential ditch digging jobs to various sized pasture maintenance jobs is not necessarily a good comparison. For example, a small machine patio job vs. a medium-size machine patio job are still going to take almost exactly the same time to complete. They also command exactly the same fee. The difference is that right now I cannot perform the small machine patio job unless I rent an ASV RC-30 or Toro Dingo. And if I do rent, there goes almost all of my profit.
On the other hand, big machine jobs are not necessary longer duration or more profitable jobs. It is all about capturing (rather than losing) those jobs at the two extremes of the job spectrum. Similar jobs all make the same money... provided, of course, I have the right equipment to do them.
Dougster
Rara Avis
Veteran Member
Doug...
Before you buy another machine....
make a list the jobs that are in your area...
then identify what equipment is needed to do each of the jobs...
then figure what said equipment will run each month
then calculate what said tasks will pay
any task that will not pay your equipment and salary eliminate from the list...
whatever's left will give you an idea of what to purchase...
One advantage of having a CDL is it is a quick way to supplement your income as a fill-in driver for those rainy days, when you can't work outside...
Before you buy another machine....
make a list the jobs that are in your area...
then identify what equipment is needed to do each of the jobs...
then figure what said equipment will run each month
then calculate what said tasks will pay
any task that will not pay your equipment and salary eliminate from the list...
whatever's left will give you an idea of what to purchase...
One advantage of having a CDL is it is a quick way to supplement your income as a fill-in driver for those rainy days, when you can't work outside...
