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Some advice for the young new guy...

Discussion in 'In the Office' started by davisdirt, Mar 8, 2017.

  1. davisdirt

    davisdirt New Member

    Joined:
    Mar 8, 2017
    Messages:
    2
    Location:
    North Alabama
    Hey everybody, my first post on the forum. Been itching to do this and finally gave in. Please read this. I know it is long, but I need the help. I appreciate your help.

    I'll start with a little background. My name is Evan, I'm 20 years old, and from Alabama. I have loved construction from the time I found out about it. At 16, I got into some trouble with my parents, and was told I needed a summer job. I found an ad for a job doing fencing, started working, within a month I was a favorite of everyones, from the owner to the subs. It was great. School came and went, I worked in agriculture, was very involved in it, went on to be a manager of a small family farm, the farmer also owned a construction company. I graduated while working. I then went and bought my first truck which I paid cash for in full, a 2007 f-350. I went to college, it wasn't for me. I was diagnosed with a clinical depression along with ADD. The school is an hour and a half away and I was working 70-80 hour weeks. I let my selfishness get in the way of the job and went on to lose it.

    That was february second of this year. As of march 8 of this year, I have made around 10,000 dollars on my own. I do skid steer work, construction cleanup, landscaping, etc. I have a great contact at a large rental company and have rented equipment constantly since my start. I currently have 5 jobs to bid on by the end of the week, and 3 more already lined up. I know the skid steer business is something that is constantly put down here, but I have made it a decent business venture I would think.

    I have a few questions, and am open to any and all information.
    1. What's next? Do I stick with this? I'm currently renting equipment, and have access to a dozer, trackhoes, mini x's, skid steers with tons of attachments, trenchers, backhoes, and tractors. Do I buy equipment? I bought a very heavy duty trailer a few weeks ago and a demo saw for $350. Finished painting and lights today, now for decking. I really don't want to go back to school, My dad went without it until the age of 35, when he decided he wanted a desk job, and is a business owner with great income, large house, and little debt. Both grandfathers were executives in large businesses, one in a large telephone company, the other in a large brake company. Even my grandmother was a partial owner of a bank, business owning is in my blood.
    2. I don't want to spend my life in Alabama, I've been dating a beautiful girl for a few years now, who is going to college to be a surgeon, she showed me a part of Georgia and I truly fell in love. My dad owned a timber company when I was younger and I eventually would like to be in the business, Georgia is a great place for that, and with the development around Atlanta, I think it would be great. I'd like to relocate in 4-5 years. Should I begin looking that direction, build a company and sell, or keep it relatively small (praying for the good Lord to bless this venture has gotten me through the rough patches)?
    3. I'm currently looking for a shop. I have the option of buying and building, my dad and grandparents have both offered to invest or finance my venture, but I would prefer to rent. I live in the country, but have been unable to find anything. Where/how should i go about finding this? Also on the topic of money, what equipment should I be looking for? The skid steer is by far what I use most, but my trackhoe availability has landed some of the largest jobs.
    4. How should I be marketing? I'm almost completely reliant upon Craigslist at this point. I have considered Houzz, Homeadvisor, Angieslist, and Facebook. Should I try to get a sign posted somewhere? I also have been talking to contractors and getting my name out there that way.
    5. I have taken lots of landscaping, but that isn't the route I want to end up on, At what point can I steer towards contracting type work, development, etc.?

    Thank you for reading this, I know it was a lot. I'm a lost 20 year old trying to find his way. My plans were originally to be at Mississippi State right now, but because of the circumstances, that is off the table. Now I'm a bit lost and confused. God has blessed me with an opportunity, and I'm trying my best to be responsible with it and take advice from the "old pros"
     
  2. Hobbytime

    Hobbytime Senior Member

    Joined:
    Sep 22, 2016
    Messages:
    295
    Location:
    usa
    Wow, you have a full plate..but you sound like you have a great attitude and work ethic, so you are on a good start...you only live once and you are young enough to recover from any failure you may have in the beginning..your questions span a large area..from work to personal life...what you do and plans with your GF ..only you can decide where that goes and how to go about it.. what does she want to do has alot to do with your plans, so sit down and talk with her and see if the both of you are on the same page..I can say from experience( seeing what has happened to friends and people I know) and not that every case is the same..when your girl graduates and becomes a surgeon making big $$$, will she have the same attraction to you? its a sad way to look at things but this is real life and not tv..will she meet another DR and go in that direction? at young ages, peoples minds are evolving to the environment around them..
    thats why you need to have a serious talk with her and what both of you want in your futures...as far as business..thats something you need to feel out and see where the best place is for YOU..to prosper and grow..and that doesnt mean you can move around and try different places..most important, get some money saved in the bank or investments, that will give you the freedoms of choice and to make it through some tough times of no income..good luck with what you do, and you are in control of your future...we all learn by our mistakes, so even if you make them ..use them in a positive way and keep on going..
     
    davisdirt and auen1 like this.
  3. Birken Vogt

    Birken Vogt Charter Member

    Joined:
    Nov 30, 2003
    Messages:
    1,220
    Location:
    Grass Valley, Ca
    I agree about considering your employment situation vs. your future wife's. If she is going down that career path then you ought to consider growing your business to the point that it pulls in more money than one guy in the dirt can make.

    Rental vs. ownership there are a lot of big companies out there and they rent a lot of machines but of course they own some also. It is just a financial calculation, they even have financial calculators on that subject. Hassle of maintenance and risk of major costly failure vs ease of availability whenever you want it.

    If you were going to stay put I would not go big on ads but if you want to move then getting big and selling might take some advertisement. But if you are going to sell what would you have to sell? A guy with a stack of paid invoices and rental receipts is not going to have a lot to show. If you have a crew with a manager that can be offered to the new owner then that is what is valuable.

    One thing you have is the experience of your dad and grandfathers, they can help you make the right decisions regarding how to structure and market your business.

    Stay out of debt I say. I know it goes against the grain but it makes you much more nimble when it is time to change direction to not have fixed payments over your head.
     
  4. davisdirt

    davisdirt New Member

    Joined:
    Mar 8, 2017
    Messages:
    2
    Location:
    North Alabama
    Thank you both for your responses.

    First off, I've actually had that conversation with my girlfriend. We're all but engaged, I swore I wouldn't marry until 30, but I wouldn't trade my circumstances. We had that conversation one night at dinner, She doesn't want to date/marry a doctor. She is far from financially motivated. We dated for a few months before I revealed my family's financials to her, and when I did, she wasn't too surprised, although she didn't understand exactly how much we were talking, and like anyone she was happy, but went on to say she didn't care. I have eaten very, very high end steak houses with her, but our favorite place is a literal hole in the wall. In fact, the financial side of the medical business isn't her interest, and while she of being a surgeon or having her own practice, she also dreams of having a free clinic. I will say, I have little to no concern about her. She has stood beside me, from $9/hour to a very good salary, and now to on my own. She doesn't care about a big house or a new car either. She was raised with what she needed, but not the lavish lifestyle I have been, and because of that, she has little care or concern for the expensive parts of life.

    I currently am heavily invested in stocks, along with some municipal bonds, If I was to sale out, I could cover the cost of a decent starter home, and some living expenses. I have gotten another few calls today, and they're much needed as I've had about a week with maybe 1-2. I have plenty of ideas for making it through winter, but in all honesty, I get nervous on slow days and find myself looking for the job ads.

    "a man in the dirt can make", I completely understand what you mean, but I will say my goal currently is to build dirtwork up, until I can get a small development job and build on that to where I can get into that full time, along with commercial and government development. My old boss had 2 crews, one industrial/commercial, and another that did residential. He averaged around $80,000 a month after paying the crews, fuel, and other costs, although you still have to factor out payments on equipment and repairs. That was by his residential crew along. A 6 man crew, 2 packers, 2 6x6's, 2 dozer, a Scraper/tractor, and 2 trackhoes. The commercial crew was another 6 man crew, with similar equipment, and while I was at the company, He signed a 3.5 million dollar government job, and it lasted about a year and a half. I'm not sure what of that was profit, but he generally would bid to make about 67% on jobs. I would like to be that size eventually. I know it won't be the easiest road, but with some running money, I think i could slowly advance, basically starting with my current jobs, moving into ponds and small site work, onto subdivisions, and eventually into government/commercial.

    For the time being I will start the journey here, with the goal of building it to a place where it is salable, and eventually selling out to move to GA. I have grown up here and never liked it much. Georgia, although I will admit is partially based on my current relationship, is just a beautiful place full of opportunity for farming, timber, construction, and trucking, all of which I want to one day be involved in.

    Does anyone know where I may find a calculator like that? It seems equipment on craigslist is much cheaper compared to sites like rockanddirt and machinery trader. I have had luck finding farmers who're getting rid of low hour equipment and at great prices. I currently am looking for a small trackhoe, a john deere 35G or equivalent, and something along the lines of a Cat 267 or similar. I am heavily into fab work, rock crawlers and the such, so will be trying to make some equipment, as a lot of the attachment are absolutely highway robbery compared to the cost of them. A land plane going for $1100, I can build for around $300 ballpark.

    Birken, why not go big on ads? I most likely will, in the hopes of moving, but if things begin to look different, why wouldn't I want to get my name out?

    I will be avoiding debt like the plague, and doing my best to only finance through my dad or grandparents, I think it will work well, as they're much more forgiving than the bank, and I also won't have to worry about interest.
     
  5. Birken Vogt

    Birken Vogt Charter Member

    Joined:
    Nov 30, 2003
    Messages:
    1,220
    Location:
    Grass Valley, Ca
    I have a one man business and never advertised, just word of mouth and quickly I had all the work I could handle. With ads you may just end up with a lot of price shoppers and tire kickers and phone calls that don't mean much. It depends on the business.
     
  6. Jkellerman

    Jkellerman New Member

    Joined:
    Apr 12, 2017
    Messages:
    2
    Location:
    Buffalo
    This is as much as I can advise you on.

    Equipment:
    If you decide to continue your business, then I would recommend purchasing used or surplus equipment and parts. Used and surplus equipment/parts, if purchased from a reputable seller or marketplace, will be in operating condition. Normally, I purchase from NRI Parts or through sellers on Aucto; however, Ritchie Bros is another good option. Essentially, you will be paying significantly less for working equipment.

    Relationship & Finances:
    Unless your partner's finances and your own are already inter-tangled, evaluate your situation closer to her graduation date. Maybe in three to four years? The reality is that an education changes how people think and what their priorities are. Owning a business will do the same. You also have no idea if her medical residency and job availability will be anywhere near where you 'easily' and 'feasibly' relocate your business too. Unfortunately, most studies suggest more people cheat on their partners then don't, and half of all long-term couples separate or divorce. Don't be discouraged by this information, just be cautious and don't make important financial and business decisions based on your relationship.

    Marketing:
    Try researching inbound marketing. Essentially, you want customers to come to you. Inbound marketing techniques focus on that. With that said, until a inbound marketing strategy is showing results, continue what you're doing. Connecting with contractors seems to be the best thing you can do right now.

    Property:
    Only if you can afford it.
     
  7. Ct Farmer

    Ct Farmer Active Member

    Joined:
    Dec 9, 2016
    Messages:
    25
    Location:
    Connecticut
    First off, from what you write it appears that you really have a great and agressive work ethic coupled with the one thing many people lack - common sense. Reality for some can be an awakening, you seem to know where reality is in your world. You have made a mistake or 2, admitted it and can learn from it.

    So where to go?

    I have owned several business ventures and managed a few more and been down much of the same road you have. I learned to invest early and have a knack for it. Pretty much retired at 47 to take over a small family farm my parents started when I was a kid. I consider myself lucky to be able to do what I really like to. That is serious motivation to get out there every day and enjoy it.

    On business issues, I would aim to own several key pieces of equipment. Skid steer etc. that you use evry day. Rent the rest as you need it and price to cover the rent. I have acquired many pieces of equipment from auctions with low hours that someone bought and hardly used then got repossessed when they couldn't pay for it. Be careful with used equipment and be sure you can get parts. Just because you can buy it cheap doesn't mean you should. Take your time, go to auctions and learn what things are worth. One of my biggest customers rents virtually all his equipment. He builds malls and big developments. By renting he always has what he needs for the job and maintenance is someone elses problem.

    Owning a building or property is desirable but only if you can afford it and it truly suits your needs. Commercial rents can be a real maze to work through and I would make sure you have legal advice when doing so. You will need a place to store and fix things. Equipment breaks down and often just when you really don't need it to. We just talked yeterday about hiring a mechanic just to fix, grease, and repair equipment. There is always something that needs work. Who will do it? Start skipping routine maintenance and you will pay for it in the end. Ask us about the 9k we just spent on a dozer engine with pitted liners because we let the antifreeze go too long.

    Make sure you have good, better and awesome insurance. Get properly licensed for the work you are doing. Staying above board and getting a reputation for being honest and reliable will reward you with business. If you can doing sub work for a larger firm is a good way to get work. Just watch for them to take advantage of you and end up doing work for free or cheap.

    As for marketing. Advertising is expensive but needed. Choose wisely by starting small and targeting your likely customers. Putting general ads in newspapers rarely pays off. Are you looking for commercial work or homeowners? Big difference in your marketing plan. Passive ads are cheap and work 24/7.

    On the personal side of things, if your GF truly wants you to do your own thing and supports your efforts no matter what, you are lucky. the number of people that, to this day, say to me "you can do anything, be anything why would you do this?" is incredible. The just don't get it and I no longer care.

    I too got lucky, and right now she says I need to get back to the fields.
     
  8. Ryan Vanhorn

    Ryan Vanhorn Member

    Joined:
    Mar 29, 2017
    Messages:
    5
    Location:
    Toronto
    I only have experience with equipment purchasing myself. I agree with Jkellerman. Consider purchasing or bidding on used parts and equipment. I too, use Aucto, NRI and Ritchie Bros.