Starting Excavating Company, Insurance/Bank Recommendations

[dusty3030]

Might want to research the licensing more, you probably do need to get a contractors license. Especially if you want to take any jobs relating to anything to do with a septic tank / field.

On business insurance I've found it more advantageous to find a good local agent than whatever particular company that underwrites the policy. A local agent would be more privy to anything particular to your local area / government requirements you might run into.

Banking. Find one local that caters to small business. Don't bank a small business at one of the mega banks (Wells Fargo, Chase, Bank of America etc.) There will be smaller business focussed banks in your area if you just ask around and seek one out. For instance, the the PPP loans last year from the SBA. If you banked with a mega bank, you most likely didn't get to take advantage of that program. If you were with smaller business focussed bank you did.

 

[marhar]

For any of you who have started small excavation companies, any recommendations for insurance (prefer a company that at least knows what a tractor looks like, not a company that insures hot dog stands and anything else they can make a buck on, even better if you've had a claim and had a positive experience) and or bank (business checking etc, not for equip loans) to cover your business? I don't need workers comp so general liability, risk of pulling up a fiber or gas line etc... I'm in the process of getting my LLC filed so this is the next step.

Thoughts? Thanks in advance...

Jen

For the banking: Bank OZK has a small business checking account that has no extra fees; also get a business credit card. One needs to keep personal finances the business accounting separate. When you want to take money out of the business account take a distribution and deposit it in your personal account.

Failure to delineate between business and personal finances can negate the LLC. It is a common error to intertwine finances and then the LLC does not offer the individual liability protection. Google 'piecing the corporate veil'.

 

[Stan B]

... recommendations for insurance ...

One thing that might help you build a list for your area/industry would be to speak to local municipalities. They're going to contract out at least some work and will have insurance certificates on file for those jobs. A friendly phone call to the county/township/city clerk's office may get you some local references. I'm not sure that it would be productive to do a formal FOIA request for such info, but that is an option too.

 

[skipperbrown]

If you haven't already done so, spend an hour with your CPA about what you want to do and he will tell you what you need to do. It will cost about $150 to $300 and be worth every penny. There are so many regulators out there that are just hoping you screw up so they can screw you up.

At some point you are going to need help putting in a pipe, shoveling gravel, spotting, etc. It is very likely this will be an employee (if you tell them when to show up, how to do the job, and give them a shovel) and not an independent contractor so you will need to ready to handle employees unless this help is a very close family member.

Any business insurance broker should be able to steer you in the right direction for insurance and many credit unions offer nice small business packages. Your biggest concerns are going to be digging stuff up that someone told you wasn't there or your truck hitting someone and you being held responsible. Just make sure you are covered for all events and $3-5 million coverage is not excessive with todays judgements.

Excavating companies are in huge demand here and are weeks out in their commitments. If you do a good job, you should be very successful. Good luck.

 

[Stan B]

... spend an hour with your CPA ...

The best money I've ever spent in my own business is on a good CPA and attorney. A CPA is pretty generalized, but finding an attorney that knows my industry was priceless.

 

[Fallon]

I prefer Credit Unions to banks. Customers are members rather than just customers. Excess profit goes back to members rather than shareholders.

I have my business accounts in the came credit union I do personal banking at. More convenient, although the increased risk of errors or confusion as others noted.

I'd recommend hitting up an insurance broker. They will be able to check out many different companies for the best deal. If you find one that has construction clientele, that would be a decent start. Some stuff like snow plowing isn't covered by default. So competent agents or brokers are a start, but experienced in your line of work are better.

My landscaping policy went from $850 a year to $1,600 a year in my renewal notice this month. Held steady for 5 odd years, so could be worse I guess. Doing any digging, grading would have bumped things to over $8k per year. I'm a sole owner operator with a low income side gig that will never employ anybody else, so my rates are relatively low.

Also, find a good accountant. You can save a lot of money with good financial or tax advice. Knowing when to buy stuff (or leas or whatever) and what you can write off is important.

 

[Zmann.]

AZ General Contractor here
I will be following this , We have Farm Bureau and dislike them
I also agree and have seen first hand bank caused account errors with Business and personal checks when accounts are at the same bank
( Chase)

 

[MoMower]

I’m in PA,

State contractor number is $50 every other year.

$300k in general liability is $37.50 a month through Next Insurance. (Coverage to a maximum depth, I think it’s 8’)

811 account is $125 a year.

Small local bank for
Free business and checking accounts.

Commercial auto is $1200 year (progressive) 1 truck and 2 trailers.

I stay under 17001# so no DOT numbers (but would be $350 yr) in state only.

I’m a little guy, only machine is a SCUT.

$20-$25k a year gross.

 

[JenniferKubotaM62]

Thanks Mower...... great info....