Questions On Starting a Backhoe business

[Gmc7210]

I do alot of stuff, where people need only a small amount of material, dumped in a back yard (topsoil, mulch) or someone wants some gravel in a hole in the driveway. But I have also done quite of few jobs for other contractors or myself need to move material around a site without making a mess or getting stuck. The truck can be easily loaded with a skidsteer or mini ex, which is what alot of guys have. I do alot of my major hauling with a tandem now, but the single axle got me started and gets used just as much.

 

[BBoomerBootCamp]

Really great advice in this site!
Thanks,
Mark

 

[his1warrior]

Hi GMC 7210.

I Googled starting a backhoe business and came to see this forum. I would really like to learn more about the business and get some advice on some things if you don't mind?

 

[tuney443]

Hi GMC 7210.

I Googled starting a backhoe business and came to see this forum. I would really like to learn more about the business and get some advice on some things if you don't mind?

I don't mind Alabama,where do you want to start? The correct answer you see is that you are in [or might be] the ONLY biz in the world where you ''start'' at the top and work your way down.Paramount is having a damn good sense of humor,because you will be guaranteed some really nasty days.

 

[Dickjr.]

I have been operating a backhoe for 20 to 25 years , the first 5 were hey go get the hoe or move it here or drive it down the cold road type stuff. There was a time when you could walk down the street and get more work than you could do in a month. Those days are long gone by far. If the economy is good and people are spending its a good business , diverse is good . We dig footers and pour them , water lines private and municipal , sewer lines private and municipal , onsite waste systems , cisterns storm shelters etc. You can't just set in the seat and pull levers. I tend to disagree that a mini ex and skidsteer is the way to go but that's my area. I know in close quarters the mini ex and skidsteer would be the way to go but if your in farm country , with some residential work a 580 size or 416 size machine is very versatile.

 

[ttazzman]

first learn what it is going to cost to be in business....

Insurance is a huge expense and that is one of many expenses that you will have


go sell some work......you can always rent a hoe...or hire someone else to do the work........I have seen many a excavating company started by a great person....got all the equipment etc.....then couldn't keep it busy and soon was out of business.....great operators do not necessarily make good business people.....excavating work is a unforgiving business with lots to overcome

 

[trini_fella]

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.

Very smart guy I must say

 

[syndy]

What it all boils down to in the end is ROI (return on investment). At one time it was over 5 years but now more like 2 years. If you paid cash for equipment and it took longer, lets say 7 years you are just borrowing money from yourself. That is a big investment and if all the figures don't add up to paying off for getting into business in about 2-1/2 years I would question if there was another way to make money. At one time, every year I had to come up with purchases for manufacturing including any construction type equipment and figuring the ROI was not an easy job. You have more control of everything as you are sales, purchasing agent, planner, and the sole decision maker. Maybe what's gone wrong is not the economy but a bunch of us guys are now buying our own backhoes and doing our own work! Willis Bushogin, you aren't anywhere near Laurel Spring are you? I need a septic put in and in NC they won't let me do it myself.

 

[Bill Smith]

If you think you can make a go of it I would rent the equipment as somone else had said .If business is crapy then the iron sits in somone elses yard and your not stuck paying on a loan .And if it goes well then you can buy the equipment a little bit at a time .If we did not get contracts each year we sent equipment to auction .Some times jobs were not enough to bring in equipment , so we would job it out .It is not always about the equipment but what is specific to do the job.

 

[brucelee]

Two big questions for the beginner; is there a market for a guy with limited equipment and experience? But, ok, let's say you rent in the beginning, the owner will probably move it for you (but, if you own it you have a whole different set of issues). To make it easier let's say you rent it. Now, if you actually get work and can get the equipment there on time with the right buckets, full of fuel and it doesn't leak - now, can you do the work?
Seriously! Everyone on a jobsite will tell you they know how to operate a backhoe, but starting it up isn't operating it. It takes experience to know how to set-up and start a dig and where you'll finish it; to dig to grade or keep your trenches straight, clean and the right depth; how to jump ditches; work around others; not ruin others work; how to "feel" your work or recognize warning signs that problems are close; etc.. I could go on but the real question is, can you do the work? Sure, experience is slow coming but once you have it you are marketable, BUT, what will you tear up, ruin, or who will you **** off until you're competent? **** off enough subs and you may not be around long. Now, you did the job and you want paid. In California we have lien rights but you need to be a contractor if you charge over $500 labor AND materials, are you a contractor in your state? Anyway, you bill (invoice) your sub and if nothing goes wrong or is held up you MAY get paid in 30-60 days. Can you wait that long because sometimes it's even longer and your operating costs need paid, can you hold out? Now, as a contractor, you are self-employed and your pay won't have any withholdings, that's all up to you, are you responsible enough to save enough to pay your taxes. Ok, I'm not trying to scare anyone but all this and a lot more will make your business a lot larger than sitting in the seat of a piece of equipment. I only did commercial work and stayed away from residential. Today there isn't much commercial work out there. I retired but some of the best operators I know are having a tough time of it right now and it may not get better for a long time. Do what you're doing right now, ask questions. Go spot for an operator and see what's actually involved, it'll be boring but you'll learn a lot if you pay attention and ask questions. Good luck. Oh, I've got a semi and a 35 ton lowboy left if you really want to jump in, but you'll need a Class A license first, do you have one? Wait until you deal with that end of the business.

 

[Hokiesmokes]

Well this is an old thread but I'll somewhat relate my experiences. I haven't really found enough work to make it profitable enough to quit my day job. I get some dumptrucking work here and there, but trucking just doesn't pay all that well for what it costs to do. Dumping of debris from jobs can be a royal pita too. Basically if it's not either dirt or organic separate, it is costly to get rid of and you may have to drive it a long way to do so. I have a single axle dump and an equipment trailer. I work with rented equipment. You really have to be on top of your game with logistics sometimes to coordinate getting materials, equipment, and if you have multiple things scheduled or a narrow window of time on a machine, you better be johnny on the spot with what you think it will take to complete a job or you're going to take a hit there. I have some decent things lined up this year but I think I'm going to be getting rid of the dump truck and trailer. It ties up too much money that I need elsewhere and it doesn't return much. All of the work I've done the machines could've been hauled on a gooseneck behind the pickup to do so I'm downsizing to that. Truthfully I'd much rather sit in the seat for somebody else, lol.

 

[Bill Smith]

I hear ya Hokie

 

[Dickjr.]

I've been at this for a while now , and to be honest there are times I'd throw in the towel. When it good , its hard to beat , when its bad it worries you to death. It would be nice to just operate and let someone else worry about expenses.