I only own my equipment I've never leased anything and seldom rent, if I'd rent its just to see if the piece fits into my operation and either end it or buy it, most of my stuff is used and most from auctions or when older guys sell out and quit. The largest dozer I've currently got is a D5 size and smaller for the smaller jobs but we do have 4 of them along with a couple of excavators and several trenchers for putting in tile and all the support equipment to go with, skidsteers, semi's, enddump trailers, flatbeds, lowboys, tag trailers, etc. I basically do what the big guys don't want to take the time for when they are busy doing their thing and customers are tired of waiting because their job isn't important enough for the bigger operator and after doing work for them I usually end up being the contractor of choice from there on out but I also realize most of my customers are not in expansion mode with the exception of a few and I'm concerned that if I don't somehow get into the kinds of work the bigger expansion crowd needs I'll end up with a smaller customer base as my current customers retire, quit or pass away, thats where this guys proposition looked tempting, it was a way to get into that segment of work and if it panned out I could make the next step up in size of customers but the more people talked to me and gave opinions maybe I'm better where I'm at and as of yet work really hasn't really been a problem, someone always sees my work and wants me to do some for them or gets tired of waiting and calls me instead, so on smaller projects a few of the bigger guys have called me to do those projects, so maybe there is a competition between me and my larger competators, I'm sure a couple of my competators are nervous I'll take the next step and probably cause them even more hardship and are trying desperately to keep me at bay, I"ve even had their bankers call me and ask if or when I plan on taking the next step but I also don't want to give up what I've got, thats the mistake my competators did was expand and forget the little guys and its killing them now in tougher times and thats exactly what my competitions lender told me "you took all the small jobs and now there's none of them left for my clients and the bigger jobs dried up, your killing them" Well thats not my problem its thiers but at the same time I don't want to make the same mistake. I'm sitting here thinking if the big guys fail I'm currently set for life but if they keep expanding they'll buy out all my current customers and thats it for me, so its a big gamble do I expand into that market and compete for the jobs or sit tight and wait it out and see what happens.
Right now I don't have to bid on vertually any jobs and every one makes me money or I don't do it, if I expanded I'd have to bid for the work and why, its such a cut throat deal right now those guys are barely breaking even or at least thats what my lenders or consultants are telling me. Yes I could buy a couple of used D7 size machines and maybe a larger excavator in the 300 size class along with a larger trencher to be more productive and hire some additonal help to get more done and also go after larger jobs and I've priced the machines and yea I could get some of it for a song but then I'd have a hard time serving both the large and small guy and from where I sit and what I see in hard times the small guy still has jobs and pays his bill and I'm not seeing anything but harder times ahead and if my competition doesn't make it I've got it all anyhow and just buy some equipment later and serve only the best of the bigger guys and let the rest fend for themselves.
My family and crew are telling me to wait it out and see what happens and even if I have to pay a lot more for machines later by then we'd know, if all turns bad the worst case senerio is I have to buy machines to compete for larger jobs in the future but like my people are telling me worry about it then we've made it through this far and we'll make it through later as well. It's not really about putting anybody out of business or having it all or doing as much as I can its about making a living and doing what I can with what I have and for who I want to work for.
The other side is do we want to expand in that direction at all, theres a lot of options out there and things to do and I'm not sure if agriculture is where I want to do it at, we already offer several services in other fields and maybe those are of more interest and keep things diversified, we've looked at that as well, theres more to life than moving dirt and thats only good for about 8 months a year when the ground isn't froze and anymore farmers don't want to idle land so we can work in the summer much, so we are investigating other options besides dirt or ag, like someone stated farmers are a fickle bunch maybe its time to pursue other potential customers besides farmers.
Is anybodys crystal ball working better than mine to see whats coming or make any predictions at to what the future holds, are these guys who will buy and rent everything giong to take over and have it all or is the economy going to shut them down and give the small guy who bases his expansion on cash flow and being able to pay for it going to survive and thrive and things go towards making some sense again. So far I've heard it both ways and nobody's sure other than if it was going to happen it should have a few years ago by now.
