Getting Philosophical: The paradox of the one-person business

[Dougster]

to tell you the truth, i don't know why anyone buys new things like trucks and equipment. As soon as you sign the paper it's worth much less then you paid for it. I'm all about buying used, then you get something that's broken in already and you don't have to bite the bullet on depreciation. My vote is for a skid steer. with the right attatchments you can do almost anything.

I hear you loud and clear on buying used... but that little qualifier about the "right attachments" gets me worried as heck when it comes to buying a skidsteer. Skidsteer attachments (i.e., those that essentially duplicate tractor functionality) do not come cheap. I could have a whole yard filled with them and be going broke before I get up to what my tractor can do by design for relatively short money.

Dougster

 

[capt_met]

doug,
i can't tell what will work in your area. one thing i have been told repeatedly is to never buy a piece of equipment before the work is there to pay for it. meaning if you need to buy a skid steer because you are renting enough to justify the cost of purchase or lease. it was said earlier to have the machine for 80% of your work. for what i am doing a compact ag tractor wouldn't cut it. i was able to buy a heavier compact tlb at a steal of a price and it has worked out well. is it perfect, absolutely not. the piece of equipment that by itself will make me rich hasn't been invented that i know of. i ended up also getting a dingo to supplement the backhoe. between the 2 i can do a lot of work. when i have to i can carry both on the trailer to the jobsite. make a mess and repairs with the tlb, then clean up and finish grade with the dingo. so far only about 35,000 invested in equipment and attachments. we are in similar situations in that you are trying to do the one man show and don't want to go the skid steer route. in this case you may want to demo some heavier compacts and see how they perform for you. my concern would be the amount of money needed to go the route of the bigger machine. may be tough to haul in a dump trailer and i know i wouldn't want to tow mine without at least a dually very much. but thats another thread. i still occasionally rent when needed, especially attachments.
good luck,

 

[Dougster]

doug, i can't tell what will work in your area. one thing i have been told repeatedly is to never buy a piece of equipment before the work is there to pay for it. meaning if you need to buy a skid steer because you are renting enough to justify the cost of purchase or lease. it was said earlier to have the machine for 80% of your work. for what i am doing a compact ag tractor wouldn't cut it. i was able to buy a heavier compact tlb at a steal of a price and it has worked out well. is it perfect, absolutely not. the piece of equipment that by itself will make me rich hasn't been invented that i know of. i ended up also getting a dingo to supplement the backhoe. between the 2 i can do a lot of work. when i have to i can carry both on the trailer to the jobsite. make a mess and repairs with the tlb, then clean up and finish grade with the dingo. so far only about 35,000 invested in equipment and attachments. we are in similar situations in that you are trying to do the one man show and don't want to go the skid steer route. in this case you may want to demo some heavier compacts and see how they perform for you. my concern would be the amount of money needed to go the route of the bigger machine. may be tough to haul in a dump trailer and i know i wouldn't want to tow mine without at least a dually very much. but thats another thread. i still occasionally rent when needed, especially attachments.
good luck,

I see you own the Bobcat B300... which makes a lot of sense. And the Dingo would be a nice addition to my equipment for patio work, over-septic work, barn cleanings and other places where the Mahindra simply cannot go. I have tried to buy used ones for short money, but no luck so far. No way I can invest that much money in a brand new one.

Contrary to what you and others might be thinking, I always rent before I buy. I cannot afford to make any more mistakes. It is worth it to me to pay a day or two's rental fee to avoid making a bad purchase. Whatever I buy... if I buy... you can be darn sure that I will have rented one first!

Dougster

 

[AlanB]

My question would be.

How many billable hours are you working now with what you have?

How many additional billable hours will that new piece of equipment give you?

Are you trying to make money, or are you trying to have equipment?

From the outside looking in, you need a worker or a partner to do the physical parts that you have often said you won't or can't do. That is the piece of your business that I see missing.

I see you buying more equipment, and dropping into a financial hole that will be tough to dig back out of.

I am able to pull it off because I supply the bread, peanut butter and milk, not to mention the insurance and the house with my 40 hour a week day job. while the Wifes business satisifies my equipment junkie needs and my business (I can't spell) desires.

As to renting before buying, that is a catch 22 for us.

We tend not to bid jobs as much when we have to factor in the rental price, and the additional time needed to get the rental equipment. I tend to figure an additional 3 to 4 hours time for rental equipment, and when you are talking about something like a tamper or concrete saw or sod cutter it just makes it less then practical. It sounds good when you say I will just pick it up on the way by and return it when done, our experience is that it is not that smooth.

That is the reason we have a concrete saw, a concrete mixer, a sod cutter, our own tamper etc.

When you have the equipment, it makes it easier to bid on a job that requires removing 100 sq ft of sod.

Wish we had the business forum for this type of post though.

 

[Pete Milley]

Dougster:
Just curious. You mention moving to NH in several threads. Could this be the answer? Move now and re-establish yourself there? Why develop a temporary base in the Commonwealth and then vacate? It is possible you have the right machine but the wrong location. Kind of like a football bat.

 

[Dougster]

My question would be.

How many billable hours are you working now with what you have?

How many additional billable hours will that new piece of equipment give you?

Are you trying to make money, or are you trying to have equipment?

From the outside looking in, you need a worker or a partner to do the physical parts that you have often said you won't or can't do. That is the piece of your business that I see missing.

I see you buying more equipment, and dropping into a financial hole that will be tough to dig back out of.

I am able to pull it off because I supply the bread, peanut butter and milk, not to mention the insurance and the house with my 40 hour a week day job. while the Wifes business satisifies my equipment junkie needs and my business (I can't spell) desires.

As to renting before buying, that is a catch 22 for us.

We tend not to bid jobs as much when we have to factor in the rental price, and the additional time needed to get the rental equipment. I tend to figure an additional 3 to 4 hours time for rental equipment, and when you are talking about something like a tamper or concrete saw or sod cutter it just makes it less then practical. It sounds good when you say I will just pick it up on the way by and return it when done, our experience is that it is not that smooth.

That is the reason we have a concrete saw, a concrete mixer, a sod cutter, our own tamper etc.

When you have the equipment, it makes it easier to bid on a job that requires removing 100 sq ft of sod.

Wish we had the business forum for this type of post though.

Well, I put this thread under "Construction Equipment" because I talked about skidsteers and track excavators and TLBs... and I know of other complaints when such equipment is mentioned in tractor threads.

That being said, you make some very good points and ask some very tough questions... most of which I can't accurately answer or won't answer here in a public forum. But you make your points quite well... and no, I assure you that I am trying my best to make money and am not merely trying to have equipment. If you knew how hard a decision and risky move this would be for me, you'd know I wasn't kidding. The fun part of buying stuff and setting up this business is over. Everything from here on out is financially dangerous and deadly serious. There is no more margin for error.

I wish I had a working wife, but I don't. I wish I had a lucrative day job, but I don't. I wish I had family that could help me out... but I don't have that either. I am on my own... just me and my jar of generic peanut butter... and nothing is going to change those facts anytime soon. Consider yourself very lucky in all of those regards.

Renting is expensive and it sucks. We all know that. But it is necessary. I now know about lots of equipment that I will never, ever want to buy. There was no other way, but to rent first. It's also helped me identify equipment that I do need to buy... as soon as the budget will allow it.

Dougster

 

[Dougster]

Dougster: Just curious. You mention moving to NH in several threads. Could this be the answer? Move now and re-establish yourself there? Why develop a temporary base in the Commonwealth and then vacate? It is possible you have the right machine but the wrong location. Kind of like a football bat.

I have bored enough people to death enough times already with my plan to escape this awful, socialist state and move to the land of "Live Free or Die." Suffice to say that family and other personal/financial issues are going to keep me here for at least another year or two. I'd move today if I could... but I can't.

Dougster

 

[AlanB]

I guess I would say, you don't need to answer them here, but you need to answer them to yourself.

But, if you cannot answer how many billable hours you keep your machines running now here, I doubt anyone can answer accurately what other machines to buy, or which direction of the three you presented would be best.

For us, in our situation, our town etc. we are looking at a dingo or similar machine. They are building several developments that I think they are calling "planned communities" which translates to houses 10' apart (yes, I mean that literally)

We are considering chasing that market some more, but honestly we need more help then we are able to come up with. We are busy about 60 hours a week producing about 40 work hours, and really we want some family life and some down time as well, so how much more work can we really do with that machine?

We may however drop some of the less profitable work, and do some more of the more profitable work if we could.

good luck, I would not spend anything at all, I would spend my idle time looking to utilize what I have while keeping my cash flow on the positive side if I were in your position.

Which is why I went back and got a job after my first business adventure was failing.

 

[SnowRidge]

I don't know how many of your customers are like me, but when a contractor shows up with rental equipment, I don't like it. It tells me that he is not properly equipped to do the job, and I probably have made a mistake in hiring him.

I would make allowances for oddball equipment and special situations, but I expect the guy to have the basic equipment.

 

[Dougster]

But, if you cannot answer how many billable hours you keep your machines running now here, I doubt anyone can answer accurately what other machines to buy, or which direction of the three you presented would be best.

Well, again, I've only got one dirt moving machine right now (the Mahindra) and everything (not counting occasional rentals and subcontracts) is done with that machine and all its attachments. Sometimes I am working flat out at capacity 10 hours a day and sometimes I have no backlog at all. The focus here is on capturing more of the jobs that are getting away due to ill suited equipment... typically jobs requiring heavier, more powerful equipment... or much lighter, smaller equipment. The mid-range is fairly well covered. The jobs that are getting away are at the high and low ends of the spectrum. I'm just looking for thoughts, ideas and experience of others here. I know there are no clear black & white answers. If it was an easy formula, I'd have made a decision by now.

I would not spend anything at all, I would spend my idle time looking to utilize what I have while keeping my cash flow on the positive side if I were in your position. Which is why I went back and got a job after my first business adventure was failing.

Buying absolutely nothing more and simply continuing to do my best with what I've got is clearly an option... perhaps the best option of all. I will continue to lose jobs based on limited equipment range, but that's always going to be a fact of life to some degree unless I suddenly win the lottery and buy everything in the CAT & JD showrooms.

I'm not exactly holding my breathe for that day.

Dougster