Farmwithjunk said:
I don't agree with the principal of "buy equipment then pursue work to keep it busy". My thing is pursue work, rent equipment to do the job UNTIL such a time as you have enough of a specific type of work to warrant buying equipment to do the job(s). {snip} Bottom line, I try to buy out of necessity and NOT "in hopes of".
I think in most cases, that sort of cautious approach would make sense... particularly for a larger, established or growing business wherein you would be adding similar equipment on the margin. Renting initially might make sense if the new work was perceived as a mere blip on the screen and/or if you had a spare operator who found himself with work but machineless.
But in my one-person, one machine situation it would be very hard to compare that growth/expansion scenario to mine. The main point here is that I'm trying to address a
very specific issue: The fact that folks are calling me constantly with potential work that is marginally (physically and/or and competitively) outside of the capabilities of my current equipment. This is occurring on the both ends of the equipment range spectrum. To throw some numbers on this, I would say that roughly 1/3 of my calls are comfortably within my equipment's capabilities, 1/3 of my calls would require larger, faster or more powerful equipment, and 1/3 of my calls would require equipment somewhat smaller and lighter to accomplish the task safely and without undue risk or property damage.
Now several folks here feel that the better answer is to continue losing 2/3 of this potential work... and to expand my service area so that the workable 1/3 is still enough to keep me busy. On the other hand, my inclination is to enable my business to capture more of the 2/3rds within my current service area that is now getting away.
Re renting: I am small time... and we are not talking an infinite pool of work or billable time. At some point each month, I need to have enough money in hand to pay my bills. If I bid a job
competitively and use rental equipment to do the job, I end up at best with some experience but no real bankable profit to speak of. If things do not go well, I end up with even more experience and a modest loss. If things really go sour on a rental equipment job, I end up with tons of experience... but I go bankrupt. In short, to control risk, renting can never be more than a small part of any one job. For the kinds of jobs and equipment we are talking about possibly buying here, renting would have to be a very short-term option or I am just throwing money away.
Junk - I liked your first recommendation better: Buy nothing, hunker down and simply stay the course for now (if I recall correctly). Renting chews up too much money too fast for me to rely on it for very long.
Dougster
The single biggest logistical problem I've got is movement of equipment. It is the number one thorn in my side whether we are talking a job one town away, seven towns away... or seventeen towns away.
