Getting into the biz... maybe.

Hello,

I am thinking about getting into the excavation business. Was looking for a little advice. This would be a secondary business, as I am a farmer. I was thinking about getting my general contractor license, bond and insurance so I can do demolition, ditch cleaning/maintenance, pond cleaning, sub-contracting on foundation digs, etc. I have a large hoe (892E), lowboy, smallish dozer, etc. thoughts?

What percentage of your time does farming take up?

That's a very good question. Had a farmer/contractor do about 1-1/2 month's of work but it took him 2 years to complete it. Some delays were weather related or legitimate reasons. He gave a good deal but it would have been better to pay a little more and get the work done sooner. It was $25K worth of work but something always came up. I think if you're going to be a contractor and you have a job, that has to be your #1 priority. You can't work for a week then take 2 weeks off, then have to fix the bailer, then had to go get parts, then had to combine, then decided to go to the lake (when you said you were coming but didn't bother to call and lets us know), etc., etc., etc. He gave a good deal and we paid cash but he kept wanting money up front for diesel, etc. We're good for the money and always paid but after so many false promises to show up we weren't giving anymore till the job was completed. There is no incentive if paid in advance.

I have been doing it for 20yrs. I do most of my jobs in June, July, August and sept. Demo, trees farmstead clean up, culverts and some new construction. I never take on more than I can get done. Also if its to big of a job I will turn it down. Most of the jobs aren't time sensitive but I still try to get them done in a reasonable time. I already have guys telling me things they want done next summer.

farmerlund said:

I have been doing it for 20yrs. I do most of my jobs in June, July, August and sept. Demo, trees farmstead clean up, culverts and some new construction. I never take on more than I can get done. Also if its to big of a job I will turn it down. Most of the jobs aren't time sensitive but I still try to get them done in a reasonable time. I already have guys telling me things they want done next summer.

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As some one at times on the hiring side of the equation dealing with some who over promises on a job can be a major pain!
Now if jonno634 is careful and is up front on his availability to finish a job at a certain time it could be a good way to let the equipment he has just sitting in the yard pay for its self. Just have to be honest with the customer and yourself at all times.

What you are wanting to do was a fairly common practice in my area back in the 70's and 80's. There were alot of terraces being built at that time. Most of the guys would buy a dozer or two to build their own terraces and do a little custom work on the side. There were a few farmers that built their way up to actual mid sized construction companies and still farmed as well. The ones that did this hired guys to operate the equipment basically from the beginning. Even though they were very hands on type of guys they rarely operated the equipment. So I guess I would advise you to try to hire a good operator or two if you are wanting to turn it into a full fledged business.... Just my $.02

They gut we hired was a really good operator but just took a long time to complete the job and I heard from others in the area the same thing. He did a lot of brush clearing in the winter with his JD 850JWLT. He also had a JD690E hoe and Case 850K dozer. He was digging with the hoe and had his father in law run the Case but he was a much better operator himself. What annoyed me was when we we're trying to talk to him and his father in law was butting in the conversation saying he had to wait to get work done and we were getting such a great deal. I doubt the father in laws pays for work done on the family farm. The father in law was just helping out for a couple days and cost us some extra work and dirt moving. I agree if the job is going to take a long time let the customer know or if it's too big, sometimes you have to say you can't do it. You also have to respond in a timely manner when the customer is trying to contact you.

What's even sadder is that it is in the USA.

I wouldn’t be doing big jobs, as I agree that I’d need to be timely on the job(s). My schedule is varied, but it does have some flexibility, more than a 9-5 job. I started thinking about this as I was approached a few times while out doing my own projects.

I put my last post in the wrong thread. I think if you do jobs where you have the time to complete them would work or if the customer is OK with it do bigger jobs in stages.

Welder Dave said:

You also have to respond in a timely manner when the customer is trying to contact you.

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Just saw that note! That has always been one of my pet-peeves with some contractors. Maybe back forty or fifty years ago I could understand getting a slow reply but these days with everyone from ten year old kids up having a cell phone in their pockets how hard is it to make a short call. And if the customer is not handy leave a freaking message! If your truck breaks down call, it the dog is hit by a car call etc etc etc!

About 20 years ago we were looking for a contractor to put an addition on our house so one of the first ideas was to call a guy who lives at the most a mile from us. I did not know him but people had said he did good work. I figured our project would be ideal for him as it was so close and in the same town so he would know all the local regulations. You would think the guy would have at least called or stopped by to see what the project was but never heard a word from him!

I don't know what the deal was with the guy we hired. Super nice guy but I don't know if he was annoyed with the guy helping me wanting a better deal after he was already giving a good deal for cash or what was going on. Maybe he regretted giving us a deal??? Then wanting money up front and being away from the job for weeks on end and no word. We'd leave messages and never hear. When we did finally hear back it was almost as if he was annoyed with us. $25K isn't a huge job but it's a little more than just pocket change for most.

I'm kinda in the same boat. I work a full time job, farm a little and my dirt work started off with just a track loader. I'm busy enough now and have enough equipment that it could be a full time job. It's a viscous cycle as I turn down larger jobs that I know would pay excellent but I can't finish them and my regular paying jobs. I do lots of farm repair, tear down buildings and trees, some building pads. I did get a side dump and my dad likes to run that on an run when you want basis.