Advice on starting into skidsteer work??

[windowbarn]

We are looking into doing skidsteer work. We currently have 2006 Cat 287b and know how too run if fairly well. We are looking at getting the cat 287c. Just trying to crunch numbers and see if it would be a profitable business. We are close too Iowa City, Cedar Rapids, IA and wondering what the going hourly rate is for doing skidsteer work with a operator?? The cat service rep was saying in cedar rapids guys are charging (i think he said $150, seems kinda steep) with a operator. We already have a truck and trailer so that wouldn't be problem. The reason for going new would be because of the warranty etc. Also it looks like cat has 0 percent interest for 48 months. Any input into this would be much appreciated, also how you would go about advertising and what types of skidsteer work, considering there is so many things you could do with one.

 

[joispoi]

If you're starting a business, I wouldn't take on any debt if I didn't have to. It seems everywhere the economy is tight. People aren't spending more than they have to.

If things are different in your area, your pipeline is full and you've got work lined up as far as you can see into the future, then it's time to start talking to the dealer.

It's not possible to tell you what you need to charge without knowing what your expenses are. Charge enough to cover your expenses and to make a little profit.

As far as what type of work, a skid steer is a tool that can be used for many different things.

Think about what kind of jobs you want to do and try to market yourself. Most customers will hire you to complete a task, not operate a machine. Think about that when assigning a value to a machine (both for billing and buying purposes). You will not be in competition with other contractors offering "skid steer services". You will be in competition with anyone and everyone who can complete the job per the customers' demands whether they own a machine or have a different way to get the job done. Keep your overhead lower then the competition's and you might succeed.

Personally, if it were me, I'd give it a shot with the equipment that you already have.

 

[Monte1255]

I was qouted for a breaker work on a job at 85 hr. for a larger job, anything smaller say less than a day $100/hr. snow plowing guys are getting around that 70 to 85/hr if the job isn't bid for the season. I'm thinking this way........ you already have one skidloader right? maybe use that until you can make a good down payment, With times the way they are...a sizable down payment (one that makes payments easy enough for you even with no jobs much) and 0% interest may be doable, but each persons situation is different. there are tons of advice on buying equipment in the finance section of this forum. Do the math over and over and over until you find a solution that will either work comfortably, if your not comfortable with buying then there must be a reason.

 

[Auctioneerhere]

If I were you I would consider marketing your services to contractors who have bigger equipment & could occasionally use your service.

In our area every T,D & H have a skid steer.

 

[windowbarn]

Thanks alot for your comments so far. The 287b we have now is used mostly around the property here. The only issue is, the undercarriage looks like it won't be long before the tracks and rollers will need replaced which isnt cheap. We don't have it payed off either. It sounds like the newer ones without the asv undercarriage are alot better for long term durability. So was thinking it would be better too sell this one and start new, though you are putting out alot of money for a new one. Is there a operating cost that someone might have for a track skidsteer say 80-90 hp?? auctineerhere, when you say contractors you talking about excavating contractors??

 

[Monte1255]

what is the undercarriage replacement cost vs buying new? can it be upgraded? I'm sorry to be so cautious right now, it's just how it is right now. I sincerely hope the very best for you whatever your decision.

 

[windowbarn]

The tracks will be at least $3600. Then you have alot of axles and rollers, which we have replaced a couple axles already and that cost close too $1500. For one small axle with the wheels its around $800 and there are 8 of those plus 4 big axles and wheels. So you are looking at probably close too $10-12k realistically, that would be with all oem parts. Cat told me it costs $16k for a new undercarriage which is probably alittle steep but probably not real far off. It has almost 2k hours on it already. It seems around that mark is when you have too start replacing your undercarriage components. They might last for awhile yet but you just don't know. We are not really worried about the engine giving problems as it seems very reliable.

Here's my scenrio and this might just be dreaming but If we were able too come up with 1000 hours a year too put on the skidsteer averaging $100 an hour , that would be $100k. Then you have another possibly $25k in diesel, maintenance costs, advertising, and whatever else. If the skidsteer costs $65k new you could about pay it off by the end of the year. Not sure if this makes sense but just trying too see if theres something we are missing??

 

[shooterm]

Skidsteer only work doesnt really work. You'll be directly competeing against daily rental rates and laidoff construction workers looking for cash. Also if you dont have a idea if this could work I doubt you'll find enuff work for a planned 1000 hour year. To be honest just about everyone can and does run a skid nowadays. Sorry for sounding negative but besides snowplowing a skid only business doesnt work.

 

[windowbarn]

Does anyone have some rough real world figures on what it costs too operate a CTL?? Say one of the newer one.

 

[Stevenbrla]

Best of luck also, Windowbarn. Looking at your math, and assuming you're able to achieve those numbers... will you need to pay yourself or your partner? or this is a sideline thing that doesn't require any personal income?

I'm sure you've thought of it, but you know, if you start out with the equipment you have, and all of a sudden biz is booming, you can go buy a new machine in a matter of hours, true? Or if they don't have exactly what you want, and you're killing the competition, you can always rent what you need till Cat can get the perfect machine... and you'll have a better idea what's perfect, I bet.

New equipment is super cool to have, but its hell having to write that check every month and having nothing left over for yourself.

Adverting ideas? Look for ways that the competitors are NOT using. Think out of the box... billboards, facebook ??

What are some of kind of jobs you're thinking about?

 

[BDFT]

Here's my scenrio and this might just be dreaming but If we were able too come up with 1000 hours a year too put on the skidsteer averaging $100 an hour , that would be $100k. Then you have another possibly $25k in diesel, maintenance costs, advertising, and whatever else. If the skidsteer costs $65k new you could about pay it off by the end of the year. Not sure if this makes sense but just trying too see if theres something we are missing??

I know it sounds good but its pretty hard to achieve. I gross 150-200K with my skidsteer company and barely keep things out of the red. By your math I'd be a millionaire by now.

 

[Deeretime]

What about insurance ??? safety program, Liability, business licence, comercialt truck and trailer licencing... ect can you leagaly work for other ppl rite now?. I dont know your exact ruels down there but im sure theyre simmilar to ours and I have seen ``Bobcat owners`` get in alot of trouble for not carrying a bus licence and all the other stuff i mentioned.
Also every one on here has our own way of creating our hourly rates and i understand that you want to hear someone give you a number. The reality is that the oporating hrly rates that we set, create business for us and i am sure we all have diferent ways of getting them. But inorder to get your hourly rate you have to figure out what you can break even running that machine for. Then you know weather you are making money or losing your butt. Depending on the jobs you will figure out if you need a little more out of your hrly rate because you are working in rock which is murder on rubber tracks, or simply competing against another guy for moving a truckload of topsoil.

I am not deturing you from this venture, I am hopefuly helping to make your business a little more perfessional and better for you, Because it only takes a couple wanna bees to make the rest of us look like gougers.

what is wrong with the 87B i would rather see some one invest in a small dump truck or excavator rather than spending 75,000 on a new machine that most people can go out and rent rather than pay for someone to do it for them

Best of luck and keep me posted atleast

 

[Turbo21835]

Without getting into the dollars and cents, and all the goodies from the office ends. Lets look at your current machine. I dont find it realistic to replace a machine because you owe on it and it's going to need a uc. Start looking at ways to take what you have, drum up business, and make the machine work for you. Personally I would be looking at piecing a working uc together at this time. Long term, I would be looking at attachments for the machine, as well as a whole new uc. Keep this machine working, and pay it off. Then you should have some capital to warrant replacing the complete undercarriage. After that point your operating costs should be down, and if the business is successful you should be able to take the profit you are making, and turn it into a good down payment for a new, or my personal choice, a second machine.

 

[joispoi]

Does anyone have some rough real world figures on what it costs too operate a CTL?? Say one of the newer one.

Figure $25,000 per 1000 hrs for overhead and unknowns. Then in addition, figure your known costs: $6-8 per hour worth of wear on track components (using your replacement cost figures at 2,000 hrs), about $6-10 per hour in fuel (depending on prices in your area and what you're doing). Then there's the cost for the guy sitting in the seat (I'm guessing you're going to hire yourself for this position, so you're going to have to figure out what you need to walk away with at the end of the month when you've paid all the bill collectors). Insurance will cost anywhere from $3-6k per year depending on who you are, where you are and what insurance company you deal with. Depreciation on the machine is a hidden cost that you won't see until it's time to sell the machine. You'll have to look around and see what machines are selling for in your area that are a year old, 2 years old, 3 years old to get an idea of how much equity in your equipment simply evaporates when the new model year machine becomes available.

It's not the cost of the machine for the hours that it's running that kills you. It's the cost of the machine for the hours that it's not running that kills you.

There is a significant # of hours that go into sales and estimates before you even load the machine on a trailer to head out to a job. Occasionally you might find a big job where you can put in lots of hours, but the bigger the job, the more likely you'll be competing with bigger contractors with bigger equipment with lower operating costs. Much of your work would be small jobs which are good, but they require more time going out for estimates, more time in the office for billing and more time for customer follow up to collect checks. The hours that keep you out of the seat are the hours that you need to figure out and allow for.

 

[windowbarn]

Thanks alot for all the input. Really appreciate your honest answers. It would be more of a sideline thing, since we have a business going already but are looking at another option too use up some of our leftover time. We do have a dot number for our truck and some of that legal stuff. It might be best just too stick with a cheaper machine for the moment and see how business takes off. It does seem though from what I've read the 287b is a higher maintenance machine, especially the undercarriage and was trying to factor that all in too.
We do have a good friend locally here that is in the excavating business and it seems most of the guys around here are swamped. He has a skid steer and mini excavators. Was thinking I should maybe get his thoughts on this as well, since he would have a better idea on the local market. Also he went all new as well a couple years back with the 0% for 48 months and it seemed he made out all right. The main thing with new is you would have a warranty which would help reduce some operating and unknown costs if for some reason something majorly went wrong the engine etc.
I haven't really givin alot of thought too what we would do and what we would market for. I guess I would have too check around and see what would be the best thing too market for. With a CTL you have such a wide variety of options that its hard too know where too start. Like someone else mentioned about seeing if you could hire out too contractors. Not sure if that is the best idea or not.

 

[shooterm]

Its not a bad idea really. We parked all the big equipment and did ALOT of facility maintence work with just a 550,skidsteer,10k mini. The key here is the business was established and a know commodity to the locales. Without this work I highly doubt I'd be still working with them. The issue its all work that comes from previous experience like catch basin repairs, small scale pipe laying, heck even solving/demo landscape that cost the owner to much to maintain. You really need to hustle more then work to find niche work. Goodluck though I someday hope to be in a better position myself to try a venture as such. Certainly wouldnt think about it now though.

 

[Stevenbrla]

Friend,

Like I said before, NEW equipment is super cool. Wouldn't it be cool to be seen pulling a brand new CAT down the road? Stop at the corner store and shoot the bull with your buddies while they admire shiny new iron?

Is warranty stuff really even an issue? Tracks, idlers, fuel, grease, filters... not warranty stuff. Is your current machine giving you any issues that would be covered by warranty IF it were new?

If you didn't have a machine at all, I'd think you'd want to sneak into the industry as cheap as you could by buying a used machine... BUT you ALREADY have a machine.... so why not go get some business with it? test the waters... see if you can make some money, see if you can sell yourself, see if you actually enjoy it, or just find that customers are a PIA, and you'd rather pursue your other work, or even something else?

As much fun as it is to picture yourself on that new CAT, picture yourself writing the check for that new machine, every month. Rain, shine, busy, or not. Those notes become albatrosses that may take years to shed. If you're going to burden yourself with that... do yourself a favor and have yourself a darn good business plan before you do it.

What was the plan for the machine you (sorta) own now?

Don't mistake the advice here for us suggesting for you not to get a biz going...

You seem ambitious... which is GREAT. Don't mess up some good ambition without a well thought out plan.

 

[Deeretime]

Well i gotta say if you dont comit fully as it will be your full time job I dont belive you would make it work at all !

There is no way i could keep a small bobcat running without being there full time let alone working another job

 

[excav8r]

Hey

I currently work for a company thats rents out bobcat and mini ex's. They are all s185's and t190's and 90% of what we do is commercial for different contractors.

Try and get in with everyone but if you get a good reputation for being able to do slab on grade in buildings like schools and walmarts you're all set.

You will probably get some residential work but like people have said there is a lot of people who will just rent machine and do it themselves where contractors don't have enough work to hire someone full time who can do it so they prefer to rent with operator who can get it done as quick as possible

The company i work for has 11 bobcats half of which are ctl and 4 excavators and this summer the bossman had to hire 3 new guys as we could not keep up with demand and had no machines to spare.

 

[SE-Ia Cowman]

I would call Zigler If you are due for a new under carriage you can get a new updated asv for 12k and that is complete new drive motors, tracks,idlers,bogies and frame. Just unhook 2 hoses on each side slide them off and slide the new ones on. Ok maybe it takes a little more than that but it is not very complicated. I would not buy a new machine just because they have 0% intrest and warranty. You mite look into a tree shear there are some guys in my area doing well with them 5k for a shear and a root graple to pile with $100/hr is the going rate. Dont ever let a salesman tell you what the going rate is I had one tell me $250/HR for a D6R and $ 140 is a real number in my area