Pricing bush hog and driveway/road work?

ben2go · Jan 8, 2010

I am trying to work a deal for a Ford 4000 tractor.I should have it by the end of Febuary.If it falls through I will take the next deal.Either way,I will be running a tractor around 50HP.

Now my issue.
In a couple months, a few companies will start taking bids for bush hog work and a local HOA is taking offers on cutting roads, driveways, and maintaining a few.I was wondering how to price these type jobs.I've done this work before, but I was either a salary or hourly employee.The HOA drives and roads will be a year contract and the bush hog work usually runs three years.How would I price these jobs?By the numbers of acres hogged and by the road footage?I really need some guidance.

CurlyDave · Jan 8, 2010

I would talk to them before they send out a request for bids and ask to see some examples of previous winning bids. Since you are only looking for format, they could leave off company names and pricing information.

JoeinTX · Jan 9, 2010

Ah, once again, the old "how do I make bids" question. Serving number 100,000.........and 1.

Curly Dave has good input assuming the HOA/sub-division will provide it to you. Unless they're absolute jerks, sore-heads, and head-up-their-arse types........can't imagine a HOA being that way, but.

In the end, unless you are into charity work, work your tractor on your own property. Divide ALL expenses by hours used. Determine at least what it costs you to run your tractor on your own property. Then, get some liabilty insurance and a tax I.D. in order to make a legit bid. Figure over and above operating expenses for things like your own pay, a tire here, a hose there, a gasket, and a possibly shredded gearbox. Never know when a truck battery will find itself under your shredder along a seemingly leisurely HOA lane.

I know, it's seems like a cheap money-maker from one stand-point. Figure all costs of a legit contracting biz and all risks...........things look different then.

Pops15 · Jan 9, 2010

JoeinTX said:
Ah, once again, the old "how do I make bids" question. Serving number 100,000.........and 1.

Curly Dave has good input assuming the HOA/sub-division will provide it to you. Unless they're absolute jerks, sore-heads, and head-up-their-arse types........can't imagine a HOA being that way, but.

In the end, unless you are into charity work, work your tractor on your own property. Divide ALL expenses by hours used. Determine at least what it costs you to run your tractor on your own property. Then, get some liabilty insurance and a tax I.D. in order to make a legit bid. Figure over and above operating expenses for things like your own pay, a tire here, a hose there, a gasket, and a possibly shredded gearbox. Never know when a truck battery will find itself under your shredder along a seemingly leisurely HOA lane.

I know, it's seems like a cheap money-maker from one stand-point. Figure all costs of a legit contracting biz and all risks...........things look different then.

Good info. OP should talk to his insurance agent about a business policy that will cover his truck, trailer, tractor, and liability. A personal auto policy isn't likely to cover the tow rig in commercial applications. The HOA will probably require a performance bond and liability coverage too.
OP should talk to a lawyer too. It might be a good idea to consider incorporating to add a layer of liability protection. Incorporating will require a FEIN. If he operates as a sole prop he might get by just using his SSN.
Other costs to consider....office/clerical expenses, maintenance/repairs (tractor, cutter, trailer, truck), fuel, license for the truck and trailer, city, county or state business license (if required).

ben2go · Jan 9, 2010

Thanks guys.I have looked into insurance and my CPA can file for my LLC and tax ID.I will ask for previous contract info.I only use a tractor at home to maintain a 1/8 mile dirt road,ditches,a couple driveways, and grass.I also use it for clearing snow/ice when we get those freak storms.I'm looking to make it worth my money to own a larger tractor.My little LT isn't cutting it, and work takes forever.The road was charity work being done by a construction co that had left over gravel to get rid of.Construction died here a few years back so the co. has stop maintaining the road.Our road has gotten so rough with pot holes that some cars get stuck,so I've decide to take it on.Our elderly residents aren't capable.

CurlyDave · Jan 9, 2010

...so the co. has stop maintaining the road.Our road has gotten so rough with pot holes that some cars get stuck,so I've decide to take it on.Our elderly residents aren't capable.

I wouldn't do this without insurance and maybe even some kind of contract with the entity that owns the road. It can be a contract for $1, but:

Ask yourself the question "what happens if someone damages their car on the road?" If you have worked on the road and someone manages to break a spring, or whatever, you may be sued. Does your insurance protect you?