Questions On Starting a Backhoe business

[jkc]

Hello to all. I am a newbie on this site and I have a few questions for all of you experienced diiggers. I am looking to get into the backhoe business with my own dump truck, trailer and backhoe. I have been in the retail business for a while and it stinks now that the economy has taken a dump. I have enough funds to pay for all of my equipment so I will not have any payments. I plan on getting insurance to cover myself. The big question is, is it worth getting into this type of business. I know that you have to work at anything that you do but I want to know about the money and the profit margins. I would like to hear all thoughts.

[Bob Horrell]

My advice would be to not limit yourself to just backhoe work. I don't know what is going on in your area, but adding an additional piece of equipment might just open up your job market. In my area, the guys that just do backhoe work are pretty slow, if not out of the business because of the economy. A skidsteer, for instance, with all the attachments that can be rented might open up your opportunities considerably.

[El Hombre]

Guy I knew told me the insurance ran $400 a month if he never dug deeper than 4 feet. $1600 a month if he went deeper; all the utility lines are under at least 4 feet of dirt. We were down for 3 days of no phones because of someone with a hoe.

Other thing I saw was a guy with a backhoe on a D-4 sized track machine. He could get into hillside sites and other places no one would/could go. He was getting the same kind of money for his little machine that people with big tracked excavators were getting. In other words, try to find a profitable spot, not what everybody else is doing.

[Deeretime]

Maybe concider a Mini dig and a skidsteer, i have run alot of backhoes and i have found that mini dig's and skidsteers work better for some aplications and i belive that they are more versitle than a backhoe in most places. with two smaller machines your not limmeted to a small scope of work, I E utility contracting. Landscapeing with a skidsteer is easier because you can see what you are doing and can get more attachments to make you more productive, another employee can be useful to clean up with one machine while the other is proforming another task aswell you are not relying on one machine incase one goes down.

What sise of backhoe and what make were you looking at?

[AKRentalMan]

I would also suggest looking at a mini-ex and a skidsteer, Backhoes are good at a lot of things but not great at anything.
Something else to consider is when your business grows you'll be able to utilize the different assets on seperate jobs.
The readily available attachments for skidsteers make them super versatile and most can be rented for very little money until you can justify purchasing your own.

[jkc]

I was looking at a 80-100 Hp backhoe. I would like to stay with John deere or Cat but I have found some JCB backhoes at pretty decent prices. Anything to these machines?

[digginchaz]

Do you have any experience? Who is going to do your estimating? What type of work do you plan on doing? Do you have a place to put materials? If you don't have experience in the field it can end up costing you and not just money. Would like to know if you have all your bases covered. Don't want this to be you

[Phil]

Welcome to the forum digginchaz Lots of good advice I think. Glad I'm not in the business. Getting paid, is something else to worry about. Lots of backhoes out there, seems everyone has one, so there's lots of competition. Takes a long time to build up a customer base, can you put food on the table until your business is established? Are you good with a wrench..if you can't do at least some of your repairs it might get interesting. Consider the cost of parts when you decide on a make of machine, aftermarket parts available? Nothing like throwing a pail of cold water on an idea. Phil

[AKRentalMan]

Consider the cost of parts when you decide on a make of machine, aftermarket parts available?

Cost of downtime also comes into play with parts availability and dealer network/support. An expensive part in stock is cheaper than a less expensive backordered part a week out in a busy season.

[Ando]

I know that we are on oppostie sides of the world but....many of the local contractors in my area run mini excavators as well as their backhoes. It seems the ideal setup is- backhoe + truck & trailer + mini ex + bobcat. (covers alot of bases)

I'm also thinking of a business and am interested to hear peoples thoughts on profit margins.

A couple of blokes I know that run backhoes reckon it's just a way of buying a job (ie: similar net earnings to a wage slave)

A business plan (including back-up/get out, plan) is a must.

[Deeretime]

Yup more responcibility's and more headaches the only thing you will gain is hopefuly a sense of acomplishment rather than utter failure, all the money you will earn will have to be dumped back into your business for a few years until your business is stable

[Ando]

I guess you could also add in tax deductable items....

Vehicle and service trailer (+ a percentage of your personal vehicle)
fuel/oils etc
phones
home office
clothing

Of course, you've got to pay for all that first but it is something you can't claim on wages. (in Australia anyway)

[Deeretime]

But it can be done !!!
just make sure you are in it because you want to do great work and satisfy customers, if you go in it half assed you make the rest of us look bad

[KSSS]

I would really look close at what is available in your area. Talk to some excavators, General Contractors, look through the Yellowpages and google your area. Get a good idea of how saturated your area is. Also pay attention to what types of services are offered and what is not. Based on what you find out, structure your business to fill the niche thats open (assuming there is some room for another). Buying a backhoe without investigating whats going on in your area, is silly. A couple three years ago you could start an excavating business anywhere in America and make money. Thats not true any more.

Here it is about diversity. A one trick back hoe pony wont get you far. However what really matters is what is happening in your area.

Remember the old story of an excavator that won the Powerball one year. They asked what he was going to do with his millions. He said he would probably just keep excavating until it all gone. A lot truth to that especially lately.

[frogfarmer]

If you have done your homework and have worked out all the unforseen disasters by all means jump in with both feet and hope you dont drown. My suggestions would be contact the contractors in your area and see what work they might have to throw your way. You will get the work nobody wants but if there is enough you can get your name out and more business to follow. If you have a truck you might try the hauling business and see what else your customers need. Alot of guys make enough hauling they dont have time to dig. Another point to mention is I put twice as many hours on my skids as my hoe. I even rent a mini X on ocassion even though I have a full size hoe. When its all said and done I still have a full time job working for the MAN to ensure a retirement and health care benefits. I can make enough to support the business easily but there are always slow times and seldom is there enough excess to invest in my retirement.