Need to Make some money with my Tractor.

[patrick_g]

An unfortunate situation that is often encountered:

People trying to get started frequently discount their prices in order to capture some business. If they do this too long by too much they go out of business. There is an endless supply of "NEWBIES" in some areas that are using this discount method to capture market. This has the effect of "spoiling" the territory for more established businesses with a realistic pricing scheme based on experience.

I know this is NOT what folks trying to get started want to hear but in some areas it is just the way it is. There are customers savvy to this phenomenon that prey on these startups and get as much out of them at BELOW REASONABLE PRICES as they can before the startup, stops.

In that sort of climate is is difficult to get started and achieve a positive cash flow because there are always multiple competitors out there willing to work cheaper, maybe at a loss to "get their foot in the door." I have talked about this with established contractors and they tell me that it hurts their business when there are too many wanna be contractors who are so eager to get some busines that they hardly cover fuel costs on jobs much less put anything aside for repairs and get zero bucks salary all because they think once they have had a few jobs their "REP" will suddenly flood them with lucrative jobs.

Gee, if you only loose a little $ on each hour you work, how many hours do you have to work to make it up in volume???

Pat

 

[Dougster]

Gee, if you only loose a little $ on each hour you work, how many hours do you have to work to make it up in volume??? Pat

Accepting the fact that you are right about this... what do you feel is my best strategy for survival? We all know that the competition out there is tough... especially from illegals... but what can I do (other than quit and return to my office and wait to die there)?

Dougster

 

[riptides]

An unfortunate situation that is often encountered:

People trying to get started frequently discount their prices in order to capture some business. If they do this too long by too much they go out of business. There is an endless supply of "NEWBIES" in some areas that are using this discount method to capture market. This has the effect of "spoiling" the territory for more established businesses with a realistic pricing scheme based on experience.

I know this is NOT what folks trying to get started want to hear but in some areas it is just the way it is. There are customers savvy to this phenomenon that prey on these startups and get as much out of them at BELOW REASONABLE PRICES as they can before the startup, stops.

In that sort of climate is is difficult to get started and achieve a positive cash flow because there are always multiple competitors out there willing to work cheaper, maybe at a loss to "get their foot in the door." I have talked about this with established contractors and they tell me that it hurts their business when there are too many wanna be contractors who are so eager to get some busines that they hardly cover fuel costs on jobs much less put anything aside for repairs and get zero bucks salary all because they think once they have had a few jobs their "REP" will suddenly flood them with lucrative jobs.

Gee, if you only loose a little $ on each hour you work, how many hours do you have to work to make it up in volume???

Pat

Tough note. One has to start somewhere. Money talks these days. You have to be real saavy about the customer that is only interested in price. To me, this is a customer to avoid. There is quality of service, years in business, attitude, customer references and a whole lot of factors being played.

Gosh, IMHO if it is down to only price, factoring in all the rest of the stuff, then go for it. But price alone? I don't think I'd do business with them. Too risky.

-Mike Z.

 

[Dougster]

Tough note. One has to start somewhere. Money talks these days. You have to be real saavy about the customer that is only interested in price. To me, this is a customer to avoid. There is quality of service, years in business, attitude, customer references and a whole lot of factors being played. Gosh, IMHO if it is down to only price, factoring in all the rest of the stuff, then go for it. But price alone? I don't think I'd do business with them. Too risky.
-Mike Z.

Guess I'm finding that moving snow... or dirt... or debris is a commodity business. Price talks, quality walks. I have had some limited success pushing the safety, licensing and insurance angles. Some folks seem to appreciate my engineering & regulatory background... and some folks are turned off by it since what they want to do is either physically dangerous or marginally illegal or both!

Funny how some folks here tell you you're losing business to your competition because you're obviously charging too much... and then other folks tell you that you're hurting yourself and your competition by charging too little. I can't seem to win.

Dougster

 

[workinallthetime]

duno how i missed this thread, doug and I have been talking about this for months. I am insured, i do have my llc, i have a transport, i have t-shirts, i have business cards, ect......
I started out charging 45 an hour and by word of mouth and a few corigated plastic signs that now they are passing laws aginst around here. I cant think of 1 job that produced multiple customers, but most of my jobs turned into long time time customers. I belive in diversification so i not only do tractor work i also do lawns and landscape. I dont design anything, that is up to the customer, i dont supply anything but me and my equipment, that is also up to the customer. there are so many fine lines you have to walk or you open a entire new can of worms every time you turn around.
Signs started out giving me the most work, now craigs list gives me the most tractor work and im full on my lawn schedule for the year. I have just a hand full of people, friends and family, who are in the right place to plug my business every chance they get and i do get alot of work that way. I am not the big planner some of you guys are, all i know is i have x amount of debt and need x amount to eat so i get to work. Now i am heading back to the working world due to an offer to make lots of money, but i will continue to do the business and grow the business as much as i can and one day return to this wonderful life.

you wanna know how much to charge? call a couple other guys and see what they charge per hour for the same type of work, my discount is 5 bucks an hour, if i dont like you i charge 15 more an hour. i dont discuss the price till the end of the first meeting, this gives me the chance to adjust for location and pinta factor. Above all else be frindly, be firm, and have some clue what your talking about. some jobs are not worth 300 an hour and some are joke at 50

 

[Dougster]

duno how i missed this thread, doug and I have been talking about this for months. I am insured, i do have my llc, i have a transport, i have t-shirts, i have business cards, ect......
I started out charging 45 an hour and by word of mouth and a few corigated plastic signs that now they are passing laws aginst around here. I cant think of 1 job that produced multiple customers, but most of my jobs turned into long time time customers. I belive in diversification so i not only do tractor work i also do lawns and landscape. I dont design anything, that is up to the customer, i dont supply anything but me and my equipment, that is also up to the customer. there are so many fine lines you have to walk or you open a entire new can of worms every time you turn around.
Signs started out giving me the most work, now craigs list gives me the most tractor work and im full on my lawn schedule for the year. I have just a hand full of people, friends and family, who are in the right place to plug my business every chance they get and i do get alot of work that way. I am not the big planner some of you guys are, all i know is i have x amount of debt and need x amount to eat so i get to work. Now i am heading back to the working world due to an offer to make lots of money, but i will continue to do the business and grow the business as much as i can and one day return to this wonderful life.
you wanna know how much to charge? call a couple other guys and see what they charge per hour for the same type of work, my discount is 5 bucks an hour, if i dont like you i charge 15 more an hour. i dont discuss the price till the end of the first meeting, this gives me the chance to adjust for location and pinta factor. Above all else be frindly, be firm, and have some clue what your talking about. some jobs are not worth 300 an hour and some are joke at 50

How come one of the genuine success stories in the compact utility tractor "work for yourself" business world is going back to work for the man??? This just ain't right!!! But good luck to you Dan! As long as you're happy about this, I can't be too sad.

My "inspiration" is going back to a desk job... can my own departure be all that far behind?

Dougster

 

[LoneCowboy]

Tough note. One has to start somewhere. Money talks these days. You have to be real saavy about the customer that is only interested in price. To me, this is a customer to avoid. There is quality of service, years in business, attitude, customer references and a whole lot of factors being played.

Gosh, IMHO if it is down to only price, factoring in all the rest of the stuff, then go for it. But price alone? I don't think I'd do business with them. Too risky.

-Mike Z.

Yep, agree
I charge them more. (the people who want only price).
I don't seem to get a lot of them.

 

[LoneCowboy]

Signs started out giving me the most work, now craigs list gives me the most tractor work and im full on my lawn schedule for the year. I have just a hand full of people, friends and family, who are in the right place to plug my business every chance they get and i do get alot of work that way. I am not the big planner some of you guys are, all i know is i have x amount of debt and need x amount to eat so i get to work.

Gosh, sure wish we had a business forum (HINT)
Gott have a spiff program to build on this.
Send them a thank you note and if someone recommends us, we send them a gift certificate for some amount of money towards their next service. Our way of rewarding them for recommending us. (we call it cowboy cash)
You'd be amazed how much people want those gift certificates.
and a nice letter, who else does that? nobody.

 

[LarryRB]

selling tractor services around here is like a wild mood swing. I can be busy for three months, then nothing for well over a year. I charge a minimum of 68 per hour. Mostly stump removal, and ditching for underground electric service. Last year did earth removal for a stone wall.. Presently did some earth removal, stumping and dug out for a cellar and house expansion. The problem where I am, is, most are born and raised here,, still classified as farm country but very few farming... People don't sell property off to builders and the like, as the builders wish they did,. We also have a 5 acre minimum and this I fully agree with.,. What has happened in the last 4 years was people from the city that bought existing farm homes, and also buy their first tractor.. They'll work all day, most not having a clue what they're doing, and charge 30 or 40 dollars for the whole day. So. my machine sits and I won't get involved with this.. Once in a while, someone will call and I have to "un-do" a recent job site... Some offer to cut my own fields (hog mow) for cheaper than my own costs of fuel... I should let them cut and save my own equipment, then again, how will their job look when done and what kind of damage can be done. I've had a MAss unrrestricted hydraulic license for 20 plus years,.. Use to run a town highway dept the last 4 working years before semi retirement. I have inland marine presently on the equipment.. Liabilty is beyond reasonable. I'd have to work machine at least 30 weeks per year to cover liabilty with a backhoe... One can't work a machine that long because of referenced above.,. The enw yuppies will work for 40 a day.. That stops any possiblity of liability insurance... Darned of you do and darned if you don't situation.

 

[workinallthetime]

Doug i am not happy in the least bit, imagine getting home from a perfect week long vaction in cozumel mexico and coming home to 5 missed calls from an old dealership i worked at years ago, telling my wife how funny it is and then her saying "when do you go talk to them". I moped arounf the house for a week when i found out what they were going to pay, Yes its twice what i made turning wrenches but its not even a 1/128th the fun and enjoyment i am having now. I was the kid with all the tonka trucks and tractors, i was the kid who won career day in 5th grade for my poster of me driving bull dozers. UGGGGG im not happy im kicking and screaming !!!! I have a plan and a couple years of this will have me sitting real pretty when i dive back in full time. Just think of the deal i will get on a 1 ton with a dump bed woohoo.

Lone i am with you but i call it a "bird dog" give the customer 1 free hour.

larry i feel your pain but in the lawn way, i was cutting a yard, 1.5 acres, for 65 bucks which is dirt cheep and got beet out by a kid and his dads equipment. He charged 35, then the kid was going to be gone for 2 weeks and they called to see if i would mow while he was gone. I told them sure 130.00 and i would fit you in on sunday, needless to say the kid never came back and now they have a big company doing it and i know they are paying over 130 to get it done. Fortunatly for me there are not many people around her doing tractor work and the ones who do dont have a BH.
I just found out this weekend i can get my waste water license through a frind of the family that works for the state, talk about opening up new doors.
Oh and i have a million in insurence witih a 500 agrigate.
good luck all especially you doug, if you were closer id hand you my accounts