Getting Philosophical: The paradox of the one-person business

[Farmwithjunk]

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

Long term needs and rental aren't a good mix. I'm not suggesting rentals to fill that need. Specifically, I'm talking about "one and done" needs where buying a piece of equipment for one immediate need, then hoping to continue finding FUTURE uses to make purchasing practical.

I don't do much advertising. (So far, knock on wood, I haven't needed to do so) I have left a few business cards laying around, and I have a sign we post at job sites while we're there. That generates a few calls. My signs and cards are VERY specific. My bailywick is MOWING LARGE ACREAGE. Yet, I get 4 or 5 calls a week, like, "Do you have a back hoe"? "How much to finish grade my yard"? "Can you till my 5' X 8' garden"? ...ect....They see "TRACTOR" and then fill in the blanks to suit their needs. You just can't address EVERY call unless you have lots of expendable cash to buy equipment that'll sit the majority of the time. I'd suspect that's even more true with a single "owner/operator" as opposed to a business with several employees.

And just to throw one more thing into the fray. I've been getting dozens of calls asking about power seeding. Most cases, they're jobs suited to a tractor the size of yours and a suitably matched seeder. Any thoughts of venturing into that area? (No... I DON'T do that either)

 

[LarryRB]

in this thread, the one thing most of you are missing, and maybe not because it may not have been mentioned, is, competition.. Where I live, the last 3 years see lot's of city folk moving here. Most all are buying some sort of sub or compact tractor, Now they are all experts and willing to rent them and machine out for 30-40 dollars a day. One can't compete with this.. THe other thing, mentioning power seeding,, that is a no go also,, Too many have land pride or harley's rusting away in the back yard with no work,., when they get a caill for a harley,, the people are well aware that many have them sitting, so they call around until someone is willing to run theirs for peanuts.. This is why the landscapers are having a real rough time in his district ..Where Doug lives, houses are on top of each other, no one can park machinery in their yard to include large camping trailers or busses,, it's just a plain lose, lose situation.. Doug and I have had many a discussion over this at my home when he stops by to visit,, (I'm about 60 miles west of him).. I personally would have a different type machine but this really isn't in his cards either... A very tough postion to be in,.. For me, I quite looking for jobs and won't take on any that the new experts have completed and needs re-doing. I find most of these city slickers are more interested in who they can sue for bad work, to pay for their homes.,.. I just lost interest and don't want to know anymore,., I have enough to do on my own property that my L 48 is still very much needed and warranted.

 

[Dougster]

Long term needs and rental aren't a good mix. I'm not suggesting rentals to fill that need. Specifically, I'm talking about "one and done" needs where buying a piece of equipment for one immediate need, then hoping to continue finding FUTURE uses to make purchasing practical.

I don't do much advertising. (So far, knock on wood, I haven't needed to do so) I have left a few business cards laying around, and I have a sign we post at job sites while we're there. That generates a few calls. My signs and cards are VERY specific. My bailywick is MOWING LARGE ACREAGE. Yet, I get 4 or 5 calls a week, like, "Do you have a back hoe"? "How much to finish grade my yard"? "Can you till my 5' X 8' garden"? ...ect....They see "TRACTOR" and then fill in the blanks to suit their needs. You just can't address EVERY call unless you have lots of expendable cash to buy equipment that'll sit the majority of the time. I'd suspect that's even more true with a single "owner/operator" as opposed to a business with several employees.

And just to throw one more thing into the fray. I've been getting dozens of calls asking about power seeding. Most cases, they're jobs suited to a tractor the size of yours and a suitably matched seeder. Any thoughts of venturing into that area? (No... I DON'T do that either)

"One and done" is pretty much the most any piece of equipment under consideration could ever be rented. I had a lot more flexibility in my first 12 months... in fact, I had supplemental money in my start-up budget specifically for the rental of equipment I had not run before. And just to be clear, we are not talking 40,000 lb track excavators here. Something like that would have to be rented for a job with very stong assurances that it would pay for itself and/or agreement that the rental fee would be a full pass-thru.

I wish my "compact tractor and backhoe" service were as specific (and as in demand) as your "MOWING LARGE ACREAGE" signs say about your business. But as I've said before, I am the guy that folks call when they don't know who to call. I am everything below a yellow machine and everything above a lawn care service... at least to my "do-it-yourself" homeowner clients. You cannot imagine the frustration of losing an otherwise local and very doable job simply because your machine cannot fit into the available space or the slope is too great for your tractor to traverse. On the other end of the spectrum, the 4110+509 is sometimes just too weak or too short for certain large stumps, large rocks or deep excavations in an otherwise potentially sweet project. I don't mind losing jobs by a country mile. I hate losing jobs that I really should be able to do.

Power seeding is not something I've had any calls for. My guess is that is a specialty area that the landscapers and lawn care folks get the calls for first. First and foremost, I consider myself a ditch digger... although, admittedly, the FEL and 3-point work is what's keeping the peanut butter and stale bread on the table!

Dougster

 

[Dougster]

Doug and I have had many a discussion over this at my home when he stops by to visit,, (I'm about 60 miles west of him).. I personally would have a different type machine but this really isn't in his cards either... A very tough postion to be in.

I think if I could turn back the clock, that slightly used JD110 that I originally tried to buy (and should have tried harder) would have been a machine more compatible with a greater percentage of the jobs I am getting calls for right now... but to add such a similar machine on top of the Mahindra (keeping the Mahindra, as I must, for 3-point and FEL work plus BH back-up) still ignores all of the lucrative, tight-quarters homeowner work I'm passing up and the issue of my most cut-throat price competition: the skidsteer operators.

Dougster

 

[jmfox]

I'm wondering what kind of reputation or exposure you can have that people are calling you for bids on jobs that you have no machine or track record. Is it possible that your advertising is not focused or confusing? Maybe 1/3 of your inquiries are curious shoppers looking for a grabbag bargain. This is not money in the bank. Don't attempt to spend it.

jmf

 

[Dougster]

I'm wondering what kind of reputation or exposure you can have that people are calling you for bids on jobs that you have no machine or track record. Is it possible that your advertising is not focused or confusing? Maybe 1/3 of your inquiries are curious shoppers looking for a grabbag bargain. This is not money in the bank. Don't attempt to spend it.
jmf

I certainly believed that my advertising was focused enough before I started getting calls for jobs that were obviously somewhat outside my owned equipment range... but yes, I am attempting to improve in that area. My biggest mistake in terms of advertising was going with Yellowbook instead of Verizon. I ended up in phone books in areas were I want no business... and not in phone books right next door where I want business. This will be corrected before next season.

There is no question that a lot of my callers are looking for a relative bargain by calling downscale instead of calling the boys with the big yellow machines. Don't wish to get into all the details, but my advertising is very counterpoint to the big name (and big machine) excavators in my area.

I can absolutely say with confidence that no one has called me yet looking to pay more than they absolutely need to. If that ever happens, I'll let you know!

Dougster

 

[Farmwithjunk]

I certainly believed that my advertising was focused enough before I started getting calls for jobs that were obviously somewhat outside my owned equipment range... but yes, I am attempting to improve in that area. My biggest mistake in terms of advertising was going with Yellowbook instead of Verizon. I ended up in phone books in areas were I want no business... and not in phone books right next door where I want business. This will be corrected before next season.

There is no question that a lot of my callers are looking for a relative bargain by calling downscale instead of calling the boys with the big yellow machines. Don't wish to get into all the details, but my advertising is very counterpoint to the big name (and big machine) excavators in my area.

I can absolutely say with confidence that no one has called me yet looking to pay more than they absolutely need to. If that ever happens, I'll let you know!

Dougster

I might be taking this conversation in a totally different direction, hi-jacking the thread if you will, but this thread seems to be a broad look at the issues.

Consider many (if not MOST) of the folks you're targeting with advertisement know little, if anything at all, about how you do what you do. They see and hear TRACTOR. To many, that means anything from plowing their tiny garden to digging the Panama Canal and all points in between. Someone knowledgable in your chosen field may understand your adds perfectly, a total stranger to the concept might not see the difference between your TLB and a 200 ton crane.

My limited advertising is VERY specific, yet I constantly get inquiries regarding everything BUT what services I do offer. When pressed, the callers seem mystified by my description of what I DO and what I DON'T do.

That takes me back to a statement I made earlier. No matter what specialized equipment you do have, you'll continuously get requests for services you aren't equipped for.

Finally, an employee of mine TRIED to start up a service with a small Kubota equipped with a loader. He found what you might be finding out. The guys with the skid steers could do what he was offering, but he COULDN'T do what they could offer. He gave up on that effort and went to work for me this summer. In the end, it may be more about VERSITILITY than size and capability.

 

[Dougster]

My limited advertising is VERY specific, yet I constantly get inquiries regarding everything BUT what services I do offer. When pressed, the callers seem mystified by my description of what I DO and what I DON'T do. That takes me back to a statement I made earlier. No matter what specialized equipment you do have, you'll continuously get requests for services you aren't equipped for.

I cannot disagree with your statement. It's probably always going to happen. The frustration for me is solely limited to my present inability to capture, let's say, 50% of all seemingly serious local inquiries compared to the current 33%. That difference would take me from cruise control in some months to cruise control in every warm weather month.

Finally, an employee of mine TRIED to start up a service with a small Kubota equipped with a loader. He found what you might be finding out. The guys with the skid steers could do what he was offering, but he COULDN'T do what they could offer. He gave up on that effort and went to work for me this summer. In the end, it may be more about VERSITILITY than size and capability.

Perhaps I convinced myself that the market for a "compact tractor and backhoe" service in my area would be larger than it really is... but the folks who find me sure end up awfully darn happy about it.

Right now, I present myself as the anti-skidsteer guy... the "aggie" approach vs. the construction approach to any materials removal, placement or grading issue... the skidsteer haters solution. Sad thing is... here I am drooling over the ASV machines on every other day off just so I can start to compete speed-wise.

We touched on it earlier, but maybe I should just ask: Are skidsteer backhoe attachments really effective & worthwhile tools? I'm still trying to figure out how they can work at all with no anchor (e.g., like a tractor's FEL) off the back side of the skidsteer to allow for adequate stability.

Dougster

 

[MrJimi]

Dougster, go to
Skid Steer Attachments - Bobcat Skidsteer Loader Equipment & Accessories - John Deere Case Mustang Gehl
and click on a few videos showing you what they can do, I love my skidsteer and tractors and SS both have two dif purposes
Jim

 

[john_bud]

Dougster,

Ok, you don't like the "gopher exploder", how about getting a 60" 3pt rock picker and de-rocking yards?

Or you could get a pesticide applicators license and re-grade and ditch areas to eliminate standing water and apply bug dope. Something most bug dopers can't do.



jb