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suladas

Senior Member
Joined
Jun 30, 2016
Messages
1,731
Location
Canada
Currently I have no employees, I have my 210 hoe, 6 ton, and a CTL and for the past 2 years it's went great. Been busy, many times too busy but no stress of employees and making very good money. I did a demo job a few months ago for a fairly decent size home builder, I think they build around 40-50 a year, they are not happy with their current excavator and have asked me if I want to submit tender to take over. I know a finishing carpenter who has worked for them for over 10 years now and has nothing but good things to say and financially the builder is very stable. Payment terms are decent. I don't know who i'm bidding against, but having already done work for them I think I have a pretty good advantage if i'm comparable price wise.

For me to even consider, I know i'd have to be willing next spring to buy another hoe and have at least 2 full-time employees. I wouldn't want the risk of having one customer be more then about 25-30% of my work. But i'm wondering is it really worth the hassle? I really like the idea of having even 1 guy so not everything has to be done by me, but also know employees can be headaches. My brother does concrete and has around 15 guys or so and at the end of the day this summer i'm probably making the same amount of money as him.

The thing I like about the bigger builder is less BS. With so many of the one time builders I deal with now i'm always chasing money and virtually none have any idea what they are doing, and it's getting old quick.

There's been a few of the bigger guys closing doors the last few years, from what i've heard it's sick of not making any money because it's hard to find good guys and rates dropping so much. I have no desire to ever get that big, but wonder if it's better just to maybe find 1 good guy and stay small.
 

suladas

Senior Member
Joined
Jun 30, 2016
Messages
1,731
Location
Canada
Each venture has its bad days, if you have positive numbers prospective employees and the desire I would just do it. If you do not need the stress continue as you are, STILL will be your own call.

Numbers have been great. Except for my big hoe, lowboy, and pickup, all my stuff is paid for, hoe and lowboy about 50%, pickup about 25% left. Last year I banked enough to buy CTL, this year dump truck, a quonset sea can etc for my yard.

I am planing to hire 1 guy see how it goes, if it's good then continue 1 at a time. I don't think I have any desire to get beyond 4-5 guys regardless, to many headaches and risk if economy turns bad. Except for another big hoe, I don't think i'd be willing to finance anything, I want to pay cash.
 

suladas

Senior Member
Joined
Jun 30, 2016
Messages
1,731
Location
Canada
You have kids?

Nope. I'm 30 and single, so I figure it is a good time if i'm doing to do it. And what i'm doing now isn't sustainable if there is a point where I get married and have kids. Last year there was a lot of working saturday and sunday, this year i'm trying to only work every second saturday at most but seems to be almost every saturday. Probably averaging about 60 hours in the summer this year.
 

DMiller

Senior Member
Joined
Feb 21, 2010
Messages
16,435
Location
Hermann, Missouri
Occupation
Cheap "old" Geezer
30 I was in my third venture, something like 7th or 8th full time job besides, run as hard as can until that burnout sets in and BANK as much as can in the process.
 

CM1995

Administrator
Joined
Jan 21, 2007
Messages
13,250
Location
Alabama
Occupation
Running what I brung and taking what I win
Go for it!

Now that is from a guy that has never had a "real job" - IE working for someone else. Grew up working for my father as a kid on his framing crew and then in his homebuilding business during my teens.

Started my own homebuilding business in 1995 right out of college. Grew that into a residential, commercial and development company with at one time 15 employees. We were developing land, building houses, multifamily and commercial projects. The 2nd Great Depression hit in 2009 and I was too leveraged - company folded - It was rough, very rough seeing 15 years of your life and hard work go down the drain.

Started back over in 2011 and now built a commercial site work company with around $2M in sales per year. Have 2 crews of three for 6 total employees not counting my wife and myself. We are making more money with less stress and liability as a subcontractor than I ever did as a GC. I just wish I could go back in time and be a subcontractor for the last 25 years.:D

Now I go through that trip down memory lane to say - Just go for it. Follow what your gut tells you - mine has served me well over the years. Question - Does it "feel right" to expand now, take on this builder as a client and hire a couple of guys on? If it does then do it.

However do keep in mind and I'm sure you've thought about this but when you take on an employee you take on more responsibility. A good guy or gal is going to give your company their all and it's your responsibility to manage the company in a way that rewards them as well. The hardest thing I've ever had to do as a business owner was lay good people off.
 

suladas

Senior Member
Joined
Jun 30, 2016
Messages
1,731
Location
Canada
30 I was in my third venture, something like 7th or 8th full time job besides, run as hard as can until that burnout sets in and BANK as much as can in the process.

I got burnt out last fall. Figured i'd get a break in the winter but stayed pretty steady. Been doing a bit less this year and it's been a lot better. 7 days a week is just too much. I can handle the 14-16 hour days as long as I get at least 1 day off.
 

suladas

Senior Member
Joined
Jun 30, 2016
Messages
1,731
Location
Canada
Go for it!

Now that is from a guy that has never had a "real job" - IE working for someone else. Grew up working for my father as a kid on his framing crew and then in his homebuilding business during my teens.

Started my own homebuilding business in 1995 right out of college. Grew that into a residential, commercial and development company with at one time 15 employees. We were developing land, building houses, multifamily and commercial projects. The 2nd Great Depression hit in 2009 and I was too leveraged - company folded - It was rough, very rough seeing 15 years of your life and hard work go down the drain.

Started back over in 2011 and now built a commercial site work company with around $2M in sales per year. Have 2 crews of three for 6 total employees not counting my wife and myself. We are making more money with less stress and liability as a subcontractor than I ever did as a GC. I just wish I could go back in time and be a subcontractor for the last 25 years.:D

Now I go through that trip down memory lane to say - Just go for it. Follow what your gut tells you - mine has served me well over the years. Question - Does it "feel right" to expand now, take on this builder as a client and hire a couple of guys on? If it does then do it.

However do keep in mind and I'm sure you've thought about this but when you take on an employee you take on more responsibility. A good guy or gal is going to give your company their all and it's your responsibility to manage the company in a way that rewards them as well. The hardest thing I've ever had to do as a business owner was lay good people off.

I've been around it quite awhile, growing up my dad has always had his own business doing concrete and spent a lot of my time working for him. Although I hate to say it, but I learned more the way not to do things then how to do them from him. I worked a few jobs from 17-21 but I could never work for anyone else, I found it to be a waste of my time because I could make so much more money working for myself.

I learned a harsh lesson 3 years ago when I bought my first big hoe, truck and trailer, that summer I didn't have the money saved up to support it and work was a lot harder to come by then I expect and everything was financed. A lot of the summer I was working by the hour for my dad and brother and you can't pay for $250k worth of financing making $35/hr. I sold them and lost over $30k compared to what I paid, did a bit of work with the stuff but not much.

Now i'm in a much better position and have established myself better. I occasionally borrow a laborer from my brother over the years so I have some experience, but overall it's not great, it's frustrating dealing with people. I'm hoping more experienced people are better. I tried to hire a hoe operator last spring without any luck, I don't want to train someone, I want someone who has been digging residential basements for a few years and knows what they are doing. Everyone applying either only had oilfield experience, or maybe a bit of mini hoe experience.

The problem that scares me is seeing the problems my brother has with guys taking care of stuff. Like finding a truck so low on oil it's not on the dipstick, stupid stuff like that. Out of all his guys, there is one really good one who really looks after stuff. A few are ok, many are absolutely terrible. Something is always broken. I don't know how much different it is with excavation in terms of that. I think it would be easier in terms of leaving a hoe for a operator to dig a basement, verus driving a pickup, skidsteer, etc as it wouldn't go too long without me around.

I don't want to finance much. I want to be in a position if the economy gets really bad, I can liquidate stuff to get as small as I need for the work that's around without an issue. My thought was the biggest I want to be is about 2-200 hoes, 1-2 big ctl, 1 small ctl, 2-3 mini hoes, 1 maybe 2 dump trucks. A few employees, but still easy to manage.
 

CM1995

Administrator
Joined
Jan 21, 2007
Messages
13,250
Location
Alabama
Occupation
Running what I brung and taking what I win
I understand not wanting to finance much. Currently at a size that I am comfortable with 2 crews of 3 and don't want to add a third at the moment. Bigger is sometimes not better nor more profitable.

As far as financing goes we have a 325FL, 2- 279D's, my pickup and wife's car financed, that's it. Our debt to equity ratio is around 15.5% - the lowest it has ever been in my business life and I plan on keeping it that way. The school of hard knocks is a tough education but one you will not forget. :cool:

I would like to purchase a new D5K2 with the "smart grade stuff" on it and will probably be the next purchase. However at least one other payment will need to drop off before that happens just not comfortable with that much debt going out every month.

As far as employees go they will never work as hard as you do, be as passionate about the business or take care of the stuff like you will and there is nothing wrong with that - it's just human nature, the business is your baby, your vision, your responsibility.

The hard part is finding good folks who want to work, take care of the iron and be part of your team. I have been blessed to know and employ some of the best guys in the business. When you find them in your neck of the woods respect them and take care of them.
 
Last edited:

td25c

Senior Member
Joined
Feb 14, 2009
Messages
5,250
Location
indiana
Nope. I'm 30 and single, so I figure it is a good time if i'm doing to do it.

Oh Man .. Embrace & enjoy that time of life suladas .:)

That brings back memories ….

My Amish buddy accused me of slacking on the job as I only had 3 kids at age 40 .

LMAO !:D

You still got some time but better get busy .

As stated up thread plow on & go for it .:cool:

Business and the family :)
 

ianjoub

Senior Member
Joined
Jun 22, 2018
Messages
1,437
Location
Homosassa, FL USA
After reading the responses, my reply will be unpopular.

Don't do it. Go big or go home.

You will make more money working for/by yourself, or maybe with 1 employee than your plan. One needs to get to the 15 employee level to make more than working alone. At 15 employees you have an office person, a book keeper, can pay the accountant, have a shop boy, and have an extra employee or 2 when folks call in sick.

When you have 5 to 8 employees you will be forever chasing your tail to find work to keep them busy, chasing your money so you can pay them, doing jobs yourself because someone didn't show up, writing huge check for workers comp and unemployment and wondering where all the money goes, and as mentioned, wondering why your 2 year old $1/2 mil piece of equipment seized for lack of oil ... who's fault was that???
 

suladas

Senior Member
Joined
Jun 30, 2016
Messages
1,731
Location
Canada
After reading the responses, my reply will be unpopular.

Don't do it. Go big or go home.

You will make more money working for/by yourself, or maybe with 1 employee than your plan. One needs to get to the 15 employee level to make more than working alone. At 15 employees you have an office person, a book keeper, can pay the accountant, have a shop boy, and have an extra employee or 2 when folks call in sick.

When you have 5 to 8 employees you will be forever chasing your tail to find work to keep them busy, chasing your money so you can pay them, doing jobs yourself because someone didn't show up, writing huge check for workers comp and unemployment and wondering where all the money goes, and as mentioned, wondering why your 2 year old $1/2 mil piece of equipment seized for lack of oil ... who's fault was that???

I'm ok with an unpopular opinion. I see your point, though. 15 employee ranges helps a lot to because you can justify a mechanic too which is huge. I do have some advantage to the point that currently me and my brother share a yard, and in the future here we may split buying/renting a bigger place with a shop. So cost can be split for that, even a mechanic, an office person, etc so I wouldn't need to have as many people to justify it.

I think the limit for me will come down to two things, how much work is around and how many good employees I can find. As long as there is work and I can find good people, I wouldn't have any problem getting to that size as it's still manageable and not too big and as long as I do it slowly to keep the amount of my equipment financed to 20-25% i'm comfortable so that if things take a dive you can easily sell off equipment and keep going.

It's just there's been a few guys who blow up huge in a few years and went down in flames fast. One grew to about 200 employees in the busy season, started off just like me a single man show digging basements and went to about $50 million in the last year.
 

DMiller

Senior Member
Joined
Feb 21, 2010
Messages
16,435
Location
Hermann, Missouri
Occupation
Cheap "old" Geezer
Dave Kolb Grading when I was a kid had a 955 traxcavator(pre H) a Ford F850 tandem gas dump and a tagalong trailer
Dug basements and set grade for flatwork as driveways or building slabs
When died had been on his Second Heart transplant for three years
Had one hundred seventy pieces of machinery on four yards in three states worth close to $41mil personally. Did that in twenty years with four boys and a great banker
Stress and bad diet took him out at 67
 

suladas

Senior Member
Joined
Jun 30, 2016
Messages
1,731
Location
Canada
Dave Kolb Grading when I was a kid had a 955 traxcavator(pre H) a Ford F850 tandem gas dump and a tagalong trailer
Dug basements and set grade for flatwork as driveways or building slabs
When died had been on his Second Heart transplant for three years
Had one hundred seventy pieces of machinery on four yards in three states worth close to $41mil personally. Did that in twenty years with four boys and a great banker
Stress and bad diet took him out at 67

That's pretty impressive. So much risk though, there's so many guys who don't make it trying to get like that. There's at least 10 I can count who were a good size and have closed up in the last number of years.

Not worth the hassle to me IMO. I think once you get over a certain size a lot of guys see it differently. They think the company has endless resources and don't care. Not all, but many think that way.
 

AzIron

Senior Member
Joined
Jun 14, 2016
Messages
1,541
Location
Az
So being in the small end excavation business with mainly just backhoes we joke if you are going to run 2 machines you better run 5 with 2 full time machines you can almost double your gross but your profit will only go up by 25 to 30 percent and you will work just as many hours so your crews equipment is ready to go for monday morning with 2 machines your revenue will not support a mechanic of any kind on payroll it also wont support even part time office help.

Now there is the slimist of chances a guy will come to work for you that will work similar to you and be almost as productive but ask any owner on this forum and he will tell you he has not seen that guy or he stayed for a while and went out on his own your going to be stuck babysitting your new guy his whole first year it's just the fact his quality will not be yours and his work will not be 16hours a day 5 to 6 days a week his name is not on the door

If your going to grow get a good plan but be prepared to grow out of being the guy doing all the work to just being the guy running the company and the fire fighter that doesnt mean 20 guys but it means more than 4 to make enough production to cover the overhead.

Plan on training any one you hire experienced guys dont learn new things and dont lose bad habits green guys pick up every bad habit and have to shown more than once what's correct but you can instill the quality in them that your reputation is being built on

Bottom line when you hire a guy are you willing to give them your name to put on there work if you are great if your not it will be rough all of us are trying to duplicate ourselves when we hire a guy my dad jokes that it took him 30 years to duplicate himself in business he had to raise me

So with a grain of salt do what suits you best but you will have doubts either way and it's going to be 10 years before you will know that it was the right decision
 

Welder Dave

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Joined
Oct 11, 2014
Messages
12,260
Location
Canada
I think if you find the right person, you have to make it worth their while. Maybe pay a little higher than the going rate and give them incentives like bonus's if they get the job done sooner. It's well worth it in my opinion. Trying to do everything yourself takes a huge toll on you and you get burnt out. A lot of companies get too big and fail if the economy goes South. If you try to go too big trying to get rich is a recipe for disaster. My dad used to always say if you can a make a comfortable living, have some time for yourself/family and not be continually stressed out is the best plan.

I know a guy who has a small motorcycle shop. Makes really good money. He had a very good young mechanic who was also fast that did 75%+ of the work. Also had excellent people skills talking to customers. Very hard to find someone like this. Mechanic was making him tons of money and he had time to drive around and pick up parts and visit with suppliers, etc. Didn't have to do much wrenching of his own. Mechanic was paid an average wage and that was it. No pay for boxing day off because it isn't an official holiday and I don't believe any year end or Christmas bonus. Mechanic ended up going to work for his brother doing HVAC work. This was several years ago and the shop has gone through several mechanics, none are even close. I think if you find the right employee you pay them an above average wage and give a bonus or profit share if you're profitable. Otherwise it will just be another job until something better comes along or they don't feel appreciated. Make it hard or almost impossible for them to find something better and you will be rewarded.
 

NelsonL

Member
Joined
Jul 2, 2015
Messages
11
Location
USA
Try to make sure you're putting enough away to replace your equipment with cash at end of life. Always make sure you have a good exit strategy which shouldn't be tough as long as you don't borrow a lot of money.
 

Raildudes dad

Senior Member
Joined
Dec 29, 2007
Messages
411
Location
Grand Rapids MI
I'm 69, still working for the local county highway department becasue i enjoy working. I've done a lot of different projects and even managed 125 employees at one time. I've always kept an eye on the dept finances from a "business" point of view. When I was in my mid 20's I got the "own my own business" itch. i was admiring all the local road contractors and their success. Then it dawned on me that either dad or grandpa had worked sun up to sun down all kinds of hours to make the companies successful. They then semi retired or retired and the kids were used to new every thing living the good life and basically run the companies into the ground.
So I stayed with the county, have had a good life, spent plenty of time with the family and have no regrets.
Do a full analyses of where you want to be and go for it:)
 

AzIron

Senior Member
Joined
Jun 14, 2016
Messages
1,541
Location
Az
Something that dawned on me about growing a business today when a perspective new customer called and said I was highly recommended but am really expensive but they figured they would try us out my response was sir you miss understand I have not decided if I want to try you out as a customer I dont need the practice or the experience to take care of your work when you have a job you want done call and schedule it if not dont waste my time fishing me to straighten out the guy you have used for 10 years

Point is most customers act like they do you the favor of using you and therefore rates are negotiable in there opinion as well how much of there work goes to you as holding that over your head

If your not prepared to be able to walk away and see a crews equipment set at the yard for a week then your not prepared to add that crew or employee this is the reason I see many acquaintances get in a bind with customers they can't afford to walk away and they mentally cant walk away and growth is where most of this becomes a factor

Food for thought
 
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