How Much Should I Charge?

[snymat68]

Why pay a dealer to do something you can do? That's taking money out of your own pocket.

You mean I have to get liability insurance to charge someone to do work with my tractor?

No. It's only illegal if you get caught.

 

[crashz]

I can't recall where I read it (maybe here on TBN), that if you dig, like with your backhoe, and go down more than something like 3' (can't be sure on the depth), that insurance goes way up. Something to do with hitting utilities and people dying in holes, cave-ins, etc...

That's true. I believe its a 4ft limit, but yes it goes from a landscaper policy to and excavator policy and that is much more expensive. I have a landscaper policy, but only do minor grading. Last year I started my tractor business as a side business and have had great success and some failure too:

The Good -
- Its nice to put your machine to work and get paid.
- I tallied my costs and gave myself a minimum hourly rate and came up with $60/hr to charge. It seemed reasonable for my costs, though I did not consult an accountant or a business coach. It's also higher by a few bucks than all of my competitors on CList.
- I put a pretty dull little add on Craigslist last year, and the phone has been ringing off the hook. I was so busy last year that I was taking only one in three jobs and could pick the ones I wanted and I felt comfortable with.
- There are some tax benfits, but you need to be better prepared than I was.

The Bad-
- Since I tallied my costs and after doing my taxes this year, I realized that I missed a ton of actual expenses. Office supplies, marketing costs, and the big one: My truck.
- People will want you to do just about anything. Got my first X rated request a few days ago. It was vile and disgusting and then asked for some mowing work too. But mostly I get requests to do things that a tractor is not cut out to do. People want to get heavy earthwork done without calling an excavating contractor.
- Even jobs that you vet over the phone, you need to look at.
- Its so easy to blow the whole job on one minor repair. I had a PTO shaft coupler break on the bush hog and no time to repair. So I bought a new PTO shaft at Tractor Supply. It cost the entire gross income from that job. So I was actually losing money by doing the work.
- There is wear and tear from every job.
- You don't get paid for maintaining and washing the your machines after a dirty job.
- I didn't figure enough money in my hourly rate to compensate for the HOURS of time it takes to prep for each job.
- the big one: You really don't make very much money. My entire summer of weekends (except for one) was consumed by the work. I lket a lot of projects go at home. And I made less than $4K in income. I bought a lot more in equipment, including a new trailer, than that.

Just some of my experiences...

 

[crashz]

No. It's only illegal if you get caught.

Its not illegal. But if you have no insurance, you are personally held liable for damages that you cause. The whole "bus full of nuns" thing comes to mind.

 

[Industrial Toys]

Here, just having to put a trailer on the road and having the right license and safety, to haul your equipment can make the whole idea, financially unviable for those ODD jobs. The Government is making it impossible for the little guy to do anything. Legally, anyways.

I would almost say, that if you are willing to do physical work, push a lawnmower and weed a garden, you would have all the work you could ask for, and you would make more money than with equipment. Just show up on your Bike, E-Scooter or Ford Focus! lol At the end of the day, you may have more money in your pocket, AND be more physically fit as well.

 

[zmountaineer]

I do neighborly work for free and don’t expect a dime. My one neighbor that I finish mow 4 acres for insists on paying me. I told her I would not accept anything but I would never turn down money toward my kids 529 education plan. She has deposit slips that she sends in monthly, lol.

 

[MossRoad]

Its not illegal. But if you have no insurance, you are personally held liable for damages that you cause. The whole "bus full of nuns" thing comes to mind.

That was the name of my third album....

 

[CADplans]

Go look at the new "MINI-SPLIT INSTALL" thread,, two guys want $2300 for less than a days work,,
If you run your tractor for less,, you are loosing money,,
If something happens, the people you are working for will sue you whether you work for free,, $1 a day,, or $2300 a day,,

Do not short yourself,, if you do, you are just doing someone a favor,,,

 

[4570Man]

That’s 299,000 a year each never working a weekend. I think your standard for your labor is pretty high. If you’re making that much or even half that much you should stick to that and forget about the tractor work idea.

 

[Avenger]

Very interesting responses. Thank you.

I am not looking to start a business doing this. All of it will be under-the-table.
Why I do see the value in obtaining liability insurance, I am not starting a business and the places I am working are in open fields. The risk of damaging their property is minimal. It would be too expensive for these 'helping the neighbors' type of jobs.
I have no issue helping friends for free (who maybe also be neighbors), but I also dont want them to take advantage of me. Besides, they are the ones who offer to pay regardless of me resisting. I had one friend/neighbor put $200 in my tractor cab overnight for work I did for him that day.
However, many of these people I am speaking to about helping them, I have never met before. They just happen to live near me, within 3 or 4 miles of me. They called me, they know that this is not my job or business. They just see someone as convenient who has a reputation of doing good work.
The compensation side of the conversations, for everyone, has come from them. I have yet to talk about price (this year).
So far, when they bring up the concept of compensation, I simply say something like: "we will discuss that before I start." or "We'll cover that later."

I cannot trailer my tractor. I have no truck or trailer to haul it anywhere. Otherwise, I might consider making this more of a side hustle business thing.

I do like the concept of HP rating +$20/hr = Cost per hour. That would put me at (45+20) $65/hour with hour minimum.

Never considered how much time it takes me to get ready for the job, and clean up the equipment after the job. Maybe $75/hr.
(for example, to brush hog my neighbors field this weekend, I need to take the backhoe off and hook up to the mower. Since I havent ran it yet this year, need to check the gear box and lube the pto shaft. Check the slip clutch. Thats time for something I wouldnt be doing if he didnt call me.)

Getting paid in pizza or beer is kind and all, but as a home brewer... I make better beer than they would give me. :drink:
But to each is their own. I would do that for friends... I DO that for friends, well, maybe not the beer thing, but exchange favors for favors. But if I am out on my tractor all day working on their projects, and they never come over because they are always "too busy," then....

I think I will start by telling the land owner, I charge $65/hr, 1hr minimum and see what he says. If he scoofs at that, I will simply leave. I dont really need the money and my time is better served working my own property or going fishing.

What are your thoughts? Would you hire the dude down the road to mow your 10 acre lot of weeds for $65/hr if you didnt have a tractor?

 

[Industrial Toys]

Everyone is different. Some people would pay you twice that and be happy. Some would not pay you half that!

I never worked having any insurance. Not a big fan of working to pay someone else. But nowadays you don't even need to do something, someone just has to say you did.

Another strategy is to ask for a higher amount. See if people value you at that amount. Then round down invoices to give them a break. They like that. i have done that often. I had a guy that sandblasted regularly for me for years. Nice guy but he never cut me a break. I stopped using him.

I think you need to let people know, you need to make money at what your doing, or, what's the point? But also be sympathetic to their financial needs. A good valued customer, I might also only bill for half an hour, if it was a quick and easy thing.