First skid loader job story

[Jphtmaxx]

My story, I bought the skid loader in Oct of 2013 for more of my personal use. Some tasks I do are firewood, moving car parts, general house/farm maintenance and building my garage. I have very little experience actually using a skid loader for dirt work other than driving them around to pull/push and lift cars. I paid cash for the machine and planned to do an occasional job to help pay for maintenance and parts of the machine. I have a smooth bucket, tooth bucket, an auger and in the process of making a root bucket. In the future I have my eyes on purchasing or building pallet forks, 4 n 1 bucket and/ or a grapple.


I just did my first paying skid loader job the other day. I had to fill/smooth 3 20ton dump truck loads of 2”clean and 3 of fill/washout. The guy wanted an area built up on the side of his house to park his RV and start/eventually use the area for a pole barn. He needed 2+ foot fill at the end of the parking space to make it level. I have very little skid loader material moving experience. Most of my seat time has been moving/lifting car parts. I told the gentleman $75 an hour and told him I estimated a couple hours. He told me he could rent a skid loader for $200 and that’s what he would pay me. At this point I almost didn’t do the job because I already felt like I was being lowballed, but I did want to use the skid loader for small side jobs. I also needed the experience to bid future jobs. So I told him I would do the job. He is less than 10 miles from me so I wasn’t going to have too much fuel or time in transportation. When I showed up to the job, I talked to the customer to get his expected outcome of the project. I started without a clue of what I got myself into. I wanted to work as efficiently and fast as possible, as the two hour time window didn’t leave for much room for profit. I was wildly driving up and down the piles and a couple of times I got myself into some but puckering angles, thinking I was going to flip or roll over. After about 20 minutes, I decided that I better slow down and think it through. I half throttled the machine and started moving 1 bucket at time smoothing as I drove back to the pile. With this thought process I felt like I was getting more done in a controlled manner than moving the “whole pile at once” method I started with. After an hour and half I had it figured out and was just moving the material to grade. I stopped a few times to get out and check to make sure I wasn’t too high or getting out of specs. I finished up at 2 ½ hours. I thought it looked good and got a complemented from the homeowner and was paid $200. As I was loading up, he asked if he could give out my phone number to his friends that had similar jobs needing done and I told him yes. I am not quitting my day job and do not have a note that needs to be paid every month for the unit.

Now for the questions : Is Excavating the correct term to use on a business card? I was using an 84” smooth bucket with what I believe is a wear plate/cutting edge welded to the bottom of the bucket. The plate is welded to the bottom front of the bucket and has 5 holes across the front, for bolting teeth maybe. After the project was done, I was wondering If I should bolt on a smooth edge to save the “face” of the bucket from getting beat up. I know the wear/cutting edge that is welded on will wear from back dragging and will need to be replaced eventually, but I if I put a bolt on cutting edge on top and saved the face it would last longer. I bought the bucket used- new condition and want to take care of it. I also thought about buying a removable tooth bar, but I have a 72” tooth bucket and have my eyes on a larger tooth bucket.

As far as advertising I was just going to have business cards made and hand them out as needed. Which is more of an accepted term Skid loader skid steer or bobcat . I want a $200 minimum for every job that is within about half hour of me and a $400 minimum for longer drives than that. Is this fair? Is charging by the hole on my auger fair? I planned to at least do this until I recoup some of the initial expense of the auger then I could offer it as a service to help get future jobs. I am working on a F450 dump truck to haul small loads. Do I want to charge by the mile of a flat fee on top of the rock charge? The flat fee would have to be enough to cover fuel, insurance, maintenance and my time to be profitable.

 

[cartzblown94z]

Fun stuff. I charge 150 to show up locally and that includes the first hour and 50 per hour for the rest I don't have a dump so I call in materials and I can haul away large stuff like concrete and trees, bushes too. As for out of town work it's normally 200 for the show up n first hour or more depending on how far away it is but I figure a fuel cost for the trip first and go from there on out of ton stuff I've been doing jobs as a business for 2 years now and am looking to buy a mini x too

 

[CM1995]

I'm going to be a jackass here and say that this why I don't do small jobs or small hourly work. You're pricing is too cheap and I cannot and will not compete in this market, as there is no profit in it.

The homeowner lowballed you at $200 and then asked if he can give your number out. What he will do is tell his friends how cheap you are and what a great deal he got, they will be expecting the same and all you will be doing is working your rear end off and not make any money. Remember every hour you operate your machine, you are getting closer to the disposal time.

What this type of pricing does is lower the rate scale for the guys out there who are doing this for a living and more importantly lowering the price below what it should be for the service performed. You will go broke going to a site, working 2.5 hours and grossing $200.

An example from today -

I jump in the T250 fire it up to cut final sub-grade at an entrance to the public street for a project we are doing. After running it for a few minutes I realize the engine doesn't sound right, I shut the machine down, get out to investigate and find the muffler has blown out on the end. I have welded repairs on the muffler twice already, so it's time for a new one. After a few choice adult words, I got on the net and searched a price for a replacement. $400 and change on Ebay, call the local dealer and quoted a price of $426. Ordered the muffler today and it will be here Monday.

This machine just rolled over 1k hours. I don't know how many hours you have on your machine but you get the idea. That would be 5 hours of work for $400 and you would still not be even - not even taking into account your time, transport, maintenance or fueled burned. It sucks to have to work to be back even.:cool2

 

[JNB]

I'm going to be a jackass here and say that this why I don't do small jobs or small hourly work. You're pricing is too cheap and I cannot and will not compete in this market, as there is no profit in it.

The homeowner lowballed you at $200 and then asked if he can give your number out. What he will do is tell his friends how cheap you are and what a great deal he got, they will be expecting the same and all you will be doing is working your rear end off and not make any money. Remember every hour you operate your machine, you are getting closer to the disposal time.

What this type of pricing does is lower the rate scale for the guys out there who are doing this for a living and more importantly lowering the price below what it should be for the service performed. You will go broke going to a site, working 2.5 hours and grossing $200.

An example from today -

I jump in the T250 fire it up to cut final sub-grade at an entrance to the public street for a project we are doing. After running it for a few minutes I realize the engine doesn't sound right, I shut the machine down, get out to investigate and find the muffler has blown out on the end. I have welded repairs on the muffler twice already, so it's time for a new one. After a few choice adult words, I got on the net and searched a price for a replacement. $400 and change on Ebay, call the local dealer and quoted a price of $426. Ordered the muffler today and it will be here Monday.

This machine just rolled over 1k hours. I don't know how many hours you have on your machine but you get the idea. That would be 5 hours of work for $400 and you would still not be even - not even taking into account your time, transport, maintenance or fueled burned. It sucks to have to work to be back even.:cool2

Agreed! I don't do hourly work, but do use it to help estimating of course.

My CTL won't leave my yard for less than $900 a day and it's usually more. I used the same figure when I was renting equipment. Shoot...my 35hp tractor works out to at least $750 a day. If those prices were too expensive, I wouldn't be booked up with work, but I am.

 

[InsleyGuy]

I agree with CM1995 on this, and will go one step further. Do you carry liability insurance? What happens when you hit something underground that the homeowner forgot to tell you about? Clip the corner of the house, car, tree? Blow a hydraulic line and cover the side of the house with oil? Stuff happens, and somebody has to pay for it. Your homeowners insurance on the machine stopped the minute you crossed your property line. Even doing a favor for a friend could turn ugly real fast. Tom

 

[06Pete]

I totally agree with CM1995 this hurts all of us that put food on the table with this kind of work. I know everybody has to break in the business somehow but you need to be able to figure your own prices as in what it actually costs you to do the job as in the fuel, time, insurance, repairs and all other costs. Being able to control your costs is what makes you competive and still make money. The slower the economy gets it seems the more people around here have bought a skidloader or backhoe and thought they could pay for it and make some side money only making it harder for us doing this everyday. I would have to agree with my late father the rental companys kill the small contractor and a dealer should not sell you a piece of equipment without atleast 80% down this would keep the established contractors from having to deal with this kind of price gouging. I wish this guy no harm but he is taking food off of someones plate with his play toy. If he wishes to continue his side hobby as a business he should get insurance and spend some time running #'s to figure what it will take and then see if his figures are compareable to area rates.

If the home owner ever starts on me with what the rental company charges I tell them to go rent it and keep my # as it will be double to fix what they screw up and normally I get the job for my price or get called back to fix the mess. I have been doing it for 20 years and won't let a customer do my job(figure the cost) builders included and I might not always be as busy as I would like but I have never run out of work or been hungry.

 

[CM1995]

If the home owner ever starts on me with what the rental company charges I tell them to go rent it and keep my # as it will be double to fix what they screw up and normally I get the job for my price or get called back to fix the mess. I have been doing it for 20 years and won't let a customer do my job(figure the cost) builders included and I might not always be as busy as I would like but I have never run out of work or been hungry.

You hit the nail spot on, don't let someone else set your pricing. You only know what you need per hour or per job to run your machines, keep them maintained and most importantly make a profit.This plays throughout the construction industry.

I have had PM's and estimators tell me "we have this guy that will do it for X but we want you to do it for his price", I tell them to take his money. :cool2

The same can be said when a customer says "I can rent whatever for X per day". The response should be "go for it". Sometimes people need to get a self education in why certain services cost what they do. When they tally the base rental, delivery, environmental fees, etc and then still don't get the desired result because they don't know what they are doing, the person slowly learns why a certain service costs what it does.

 

[barklee]

You hit the nail spot on, don't let someone else set your pricing. You only know what you need per hour or per job to run your machines, keep them maintained and most importantly make a profit.This plays throughout the construction industry.

I have had PM's and estimators tell me "we have this guy that will do it for X but we want you to do it for his price", I tell them to take his money. :cool2

The same can be said when a customer says "I can rent whatever for X per day". The response should be "go for it". Sometimes people need to get a self education in why certain services cost what they do. When they tally the base rental, delivery, environmental fees, etc and then still don't get the desired result because they don't know what they are doing, the person slowly learns why a certain service costs what it does.

Exactly what i was going to say. By the time the rental company got done with this guy at the $200 rental bill it would be well over $300 with delivery, fuel surcharge, bla, bla, bla. Plus at the end of it he didnt know what he was doing and would be looking you up to repair his mess. Take it from all these guys on here, you do not want to do a job like this for such small cash! You got lucky this time but it seems like everytime i try to help someone out and do a small job like this something happens.....blown hydro line, blown tire, tore up a lawn a little, hit a gas line, etc. All of these things cost money and more importantly, time! I wont go into the whole insurance thing but i surely hope you have some if you are doing work for hire, gonna be bad news bears if something happens and you dont.

 

[Lindsey97]

CM1995 couldn't have said it any better.

I charge $75/hr. for my case 70xt skid steer, 5 hour minimum if hauled with a f350, 8 hour minimum if hauled with my tandem dump/pintle tag trailer. the price also goes up if I am using a breaker hammer or other specialty attachment.

$200 is way too cheap and while we are on the rental rate subject I will share my knowledge on that subject, and how to deal with these folks that beat you down with the rental mantra.

we will use my D4c dozer as an example. cost to hire me is $750 per 10 hour day, plus a $250 haul fee if more than 25 miles from my home base.

if you rented a similar crawler, it would cost approx. $600 per day to rent. but you have to provide the fuel per day which costs $112 per day assuming a 3.2 gph burn rate at $3.50 per gallon. a typical transfer pump/tank setup costs $900. do you have that tank setup to fuel the machine?

transport by the rental company is $125 per move plus $3/mile each way depending on the mileage. and they charge to pick it up too.

don't get the machine stuck, a wrecker company will charge $400 to recover your precious rental crawler. and god forbid don't scratch the paint, or you will be paying for that too.

when you finished operating the crawler, don't forget to clean out the tracks and powerwash the machine, or the rental company will charge for that, too. I don't think I've ever had a customer help shovel out my tracks with me.

refuel the machine before returning it, or they will charge $6/gallon to refill it at the rental store.

and if you don't have rental insurance, you will be charged 18% of the rental fee plus sales tax.

after adding this all up, please don't forget that this machine doesn't come equipped with an operator. and I like to make $20/hr. in wages because I am fat and like to eat.

so the next time someone decides to pull the old "I can rent it for less than that" politely tell them to go to the rental store and "get some"

 

[td25c]

That's great Jphtmaxx . You charge $ 75 an hour . Got the job done in 2.5 hours = $187.50 ... Customer happy and got paid $200.00 . Nothing wrong with that . What kind of skid loader did you buy ?

 

[Mark13]

I don't mean to sidetrack this to much, but for those of you more experienced how do you figure productivity per hour with your machine? With many years in the business it's a non-issue but for those guys just starting out hourly is easiest but it's harder to sell a job when you can't give the land owner a clear number on what the project will cost. If you say you work hourly the first thing they are going to think of is you taking your sweet ole time and trying to get every dollar they have.

I realize it's a double edge sword for most. You have to get seat time and practice to know what you can accomplish in an hour with your particular machine and the conditions but it's hard to get that seat time and data without having jobs to pay for your wear of the machine, fuel, your time, etc.

 

[Desertwheeler]

If they want a set price and you think four hours charge for six. In my eyes a set price is gonna be higher because of the unknown. Where as an hourly rate is gonna get them what they want done for the exact price.

 

[ejb17]

I thought I would add to this thread because of all the good points that have come up. A little and short background on what we do. We do C&D debris removal and container rental and with that had an opportunity to do stump grinding because of trees being in the way of renovations or grown through stuff we take down and away. So a couple of years ago we sold our tow behind stump grinder and bought a unit from Stumper Industries that goes on our skid steer to have more utilization and update our grinder. We really dont do dirt work except for leveling off where we have worked so I can not really comment on big dirt projects.

However, when we do quote stump jobs or stumps on site where we are I always hear the "rental" stuff and how the customer can do it for this amount versus what we quote. I usually giggle under my breath and politely decline the job.

The other good comment was about insurance. I would not even leave my yard without it. It is a sue happy world out there. One ding on a house, car, neighbor's fence or what have you and you will erase your net profit for a long time to come.

Sure you need to start somewhere but the wise know you can not make up losses with volume and undercutting your area rates will only damage everyone in the long run. Remember, it will have to be replaced at some point.

 

[CM1995]

That's great Jphtmaxx . You charge $ 75 an hour . Got the job done in 2.5 hours = $187.50 ... Customer happy and got paid $200.00 . Nothing wrong with that .

TD lets say you go out to a site to pull out a big tractor with your wrecker. Just for example say you charge $100 per hour. 30 min drive each way and 30 mins to get it out (it wasn't stuck that bad ), the farmer gives you $150...

What's worse than that is if your competition does it and sets these rates for your area..:cool2

 

[Jphtmaxx]

First I would like to say thank you for your comments. I have been reading on the forum for about 6 months and understand that there is a great deal of knowledge that I have gained and will need in the future. With that being said I don’t to get off on the wrong foot and say something that will offend someone, which may in the future have vital knowledge to help me and then the said person not offer forth knowledge because of my first thread. This is an open forum for discussion and I have newbie questions.
I bought a 2004 Cat 277 with 27xx hours on it for $13500 cash. I was told that the boogies had been replaced recently and look to be in good condition. I replaced the drive motor on the passenger side at $1500 and I think now the left side is weak. The machine sometimes would barely drive up my ramps onto the trailer and had very “jerky” side to side movement and at times little forward power. The main reason for the purchase of the skid loader was for my hobby business of selling car parts and scraping cars. Pulling Engines, moving rear-ends and stacking cars on the trailer. I had a partner (in the same business) that had a skid loader that we used and since I have started on my own, I knew I needed one. From the past experience I know that routine maintenance and wear tear add up. That’s why I want small side jobs that I can go to after work and make an extra few hundred dollars to put towards my future expenses and maintenance. The first goal is to pay for future parts needed, from side jobs. If it leads into more work then I can create a business plan and proceed.

I would like to agree to all comments about the rental, being lowballed and not being forced into a price. At the time I did not know how to respond to his comments about renting. I will now get in contact with local renting places and get all the fees associated with renting a skid loader, to make sure I am getting the correct dollar per hour rate.
I have heard of $400 min and was going to take that approach, but thought that was a little too much for a green operator that can’t even estimate jobs. My machine has around a thirty something dollar per hour operating expense from research I have gathered, maybe even more if you figured all the overhead. The machine, attachments, trailer and truck are all paid for and don’t have to work every day to earn their keep. Is $75 per hour too low? I see the following rates from the thread:
150 to show up then 50 hr.
900 per day. Is this a 10 or 8 hour day?
$75 per hour with 5 hour min.

From the feedback of this thread, my hourly rate is in line with 2 members. My min is in between but on the low side of the two members. Does my min needs to be raised. Would $300/2 hr min be more in line with the outfits that making a living? I don’t want to give away my services or lower the going rate in my area. I am not ready for the big jobs but feel comfortable in the smaller job market.

I don’t want anyone to starve because I took a small job from them. If anyone is ever in the Lincoln County area of Missouri and needs dinner that I stole from them please stop by. My girlfriend is a great cook but don’t show up on Friday night for frozen pizza.

I am trying to be as detailed in my post as possible to get the most beneficial information that pertains to my situation. That’s why they are so long.

 

[KSSS]

The costs for running an MTL (like your CAT and ASV's) and CTL's are higher than running wheel machines (usually offset by higher productivity, which is what keeps them popular). Specific to your machine, no doubt your price is too low. I charge $90 for my large frame CTL (not that it matters what I charge, but just to give you an idea). If I owned an MTL in my location (high desert) I would need to get another 25 an hour. No one would pay that. You need to baby that MTL undercarriage and charge enough to cover the costs of it and still make some money. That is the art of being in the dirt business. Personally I think owning an MTL for many guys is a bad investment, kept in the element they can deliver a decent investment, but especially for smaller operations that don't have the luxury of picking and choosing the best piece of equipment for the job, you make do with what you got, and in harsher ground conditions those decisions get expensive with that machine. So I would just be careful in what conditions your in, charge fair market value for your work, and try and keep the undercarriage costs in the manageable range.

 

[excavator]

Interesting read. While I agree with most of it, I find it interesting how many equipment owner/operators who complain about the competition lowballing, will not think twice about finding the absolute cheapest mechanic out there (qualified or not) to do their repairs. Or if they call a reputable one, they complain and try to knock down the price after the work is done. Fortunately I am in a position that I do not have to take every call that comes along therefore I don't deal with these people, but they're out there. Just my 2 cents worth.

 

[CM1995]

Interesting read. While I agree with most of it, I find it interesting how many equipment owner/operators who complain about the competition lowballing, will not think twice about finding the absolute cheapest mechanic out there (qualified or not) to do their repairs. Or if they call a reputable one, they complain and try to knock down the price after the work is done. Fortunately I am in a position that I do not have to take every call that comes along therefore I don't deal with these people, but they're out there. Just my 2 cents worth.

Good point to the other side of the coin. There are ones out there like that but not me, I value a good mechanic and around here good independent mechanics are hard to come by. It's just a few small guys, a couple of bigger shops that stay booked up working in the quarries and the dealer shop.

If I need the cheapest, non-qualified mechanic - I use myself.

 

[KSSS]

If I need the cheapest, non-qualified mechanic - I use myself .

True statement right there.

 

[CM1995]

If it leads into more work then I can create a business plan and proceed.

Jphtmaxx I hope you took my brunt post as some "tough love" and not a criticism. I grew up in the school of hard knocks and the baptism by fire technique.

It doesn't matter if your trucks and iron are paid for or not, they are still a depreciating asset that needs to be accounted for because one day they will need major repairs, maintenance and ultimately disposal at the end of it's working life. A paid for piece of iron that is out working should be earning enough to go into the savings account for these costs down the road. This is where financial planning in your business is very important.

You need to figure out what your operating costs, machine cost (both asset and maintenance costs) and over head are. Your overhead costs will surprise you how much it is. Licenses, insurance - GL, WC, auto, inland marine, taxes, office expense, phones, professional fees, etc, etc can add up quickly. My overhead runs around 10% of gross for example.

I would only price the small jobs with an hourly minimum, my minimum is 4 hours for small iron and by the day for the large iron. Still I find I can't make any money by doing the small jobs within the minimum charge but that's my situation.

On the topic of rubber track loaders, specifically CTL's, my T250 is the most expensive undercarriage to run in the mix.

For example -

The T250 has went through 6 tracks in the last 3 years at $1200 a pop, for a total of $7200. This problem has me puzzled as the first T250 I bought was in 2004, between 2004 and 2009 I put 3 sets of tracks on it in roughly 2K hours all due to them wearing out. The last 3 years (roughly 500 hours of use) the cords in the tracks have been breaking with 50% or better life left on the tracks. The hourly undercarriage cost of running the machine has quadrupled.

In 2009 at 3500 hrs I turned the P&B's on my 953, replaced half the pins because they were dry, put on new sprocket segments and pads to the tune of $8900. The machine currently has 4300 hrs on it with 20-25% wear on the pads and sprockets. The rails are on run out.

The track issue on the T250 has me puzzled. The machine works in the same conditions and with the same operating style. I don't know if it's just the quality of the tracks made now a days or what.

So over the last 5 years it has cost $8900 for 800 hours on the 953 with 20-25% wear and $7200 for 500 hours on the T250 and the tracks are at 50%. That's $2.78 per hour for the 953 undercarriage (taking into account 75% life left) and $7.20 per hour for the T250 (taking into account 50% life). Now I know I will not get another 3200 hours out of the 953's rails so that number is low but I also won't get another 250 hours out of the rubber tracks if it keeps going like it has been either.

In my particular situation my T250's undercarriage is the most expensive undercarriage to run comparing it to a 953 and D5G.

I agree with KSSS about charging at least $20 more per hour for a rubber track machine as my figures above only account for the track wear and not the rest of the undercarriage.