Getting into excavation and septic work

[BJ1991]

Hey guys,

I've been flipping houses for the past 5 years and I'm done with it. About to sell my last house, get a decent payout and want to put some of it in an excavation startup. I'm starting up an excavation, septic and site work company because I love running heavy equipment and I believe that a properly managed and promoted company could be profitable. I could use some knowledgeable advice as I'm new to this space. Please feel free to answer in whole or in part as I know its complicated.

A good friend of mine just purchased a large farm that she wants some work done on it:
Project 1. There's about 15 acres of sand deposits (maybe 15 to 20 ft deep) she wants dug up and turned into a pond/lake. Another contractor was going to do it and sell the sand for a profit. My friend will give me this work if I can get the equipment for it and complete it correctly. What equipment would work best for this project? What is the value in that sand and how would you sell it? I know there are some materials supply yards here I could contact and see if theyd want to purchase it for resale. Cant think of anything else. Long story short, what profit is in this project? The other contractor was going to do the work for free and actually pay some amount for the sand. Anyone have experience in this?

Project 2. Theres about 50 acres on the farm that are overgrown with 8ft tall brush and weeds and my friend wants to restore these so she can rent them as cropland. I want to purchase a CTL and brush mower attachment and do this work. What kind of bidding would you do for this per acre?

Project 3. Septic work. She wants to build at least one residential structure on the property probably 4 bedroom to start. She'll let me install the septic once I'm licensed which should be in a few months. Licensing classes are full right now unfortunately. But this is one line of work I want to get into specifically. From my research it looks like the margins are really good on this. Anyone have experience on septic work? How do you get jobs for that?

Thank you for your help. Any other general advice on how to run a successful excavation company is more than welcome.

 

[AzIron]

Your jumping feet first into a buissness that appears to be outside your depth according to your questions above to the point I say beware of friends baring gifts for your new buissness usually doesnt end well

Let's just talk about the sand can you charge to remove it have you figured out how much material is actually there do you know if it meets specs for any type of aggregate out of the ground or will it require a wash plant to process it all of that is a buissness in itself that can run in the millions to set up so it's about impossible to answer your question with out local market knowledge of trucking costs and material prices not to mention depending on what your doing with said material could be msha jurisdiction of regulations

There are a lot of threads on here about brush mulching with a ctl that would be a good start to read and get answers and that line of work ain't for the faint of heart and one 50 acre job will not be enough to launch that buissness off of from scratch with zero experience and be profitable

Sorry I am down on your dream but the dirt moving buissness breaks more guys than real estate scams do

 

[CM1995]

Welcome to the Forums BJ! Glad to have you.

AZ hit some points I was going to so I would re-iterate.

My $.02

Job 1 - Impossible to give any advice that is worth anything without seeing the site, knowing local conditions, local contractors/suppliers and a multitude of other factors.

It's like asking "How much does a car cost?"

Job 2 - 50 acres is a lot of clearing that will require heavy iron to do it profitably. There is a reason why most of the large grading companies in my area sub out clearing to clearing only contractors as they have the specialty (say expensive) equipment to get the job done and make a profit.

Job 3 - This is probably your best bet as you have a stamped design to go by and price materials. Then you need to estimate your equipment and labor costs then add your profit and overhead %. Only you can determine what you need to make profit wise and how much your overhead will be.

The septic work is best route to determine costs and profit however it is not for the faint of heart either. Tight lots, tough soil conditions and a warranty you have to honor.

Just $.03 adjusted for inflation worth what you paid for it.

Best of Luck!

 

[KSSS]

There are guys that like septic installs. I am not one of them. I do them because to dig the house, you have to do the septic as well. Probably different everywhere, but here, it requires multiple mobilizations to the job to complete (clear diesel is now over $4.09 a gallon now). Coordinating multiple inspections from the State and health dept. The costs of materials goes up every month. Septic repairs can either be good money or a weeks worth of hell, digging in other peoples poop. I can make more money doing other things, but to each his own. The specialized complex (pressurized) systems do have a lot of money in them which includes contracts for maintenance which are required by the State. These are my issues which may not be things you have to deal with. I would say that doing septics well, requires a certain amount of experience that can only be gotten by doing them. If that is all you do and you don't have any experience in them, the learning curve will be steep (expensive). When I started out, I had a friend that had done tons of them and he helped me learn the tricks of the trade. If possible, I would hire someone that has a lot of experience with septic's in your area, it will help a lot. To tag onto AZIRON's last line, If you want to make a million dollars moving dirt, start with 2 million. Especially true starting out.

 

[mowingman]

My first thought is that the sand deposit/pond idea might be a bust. How high is the water level there.? If you dig out sand, and any remains around the edges, or the bottom, it is possible that the pond will not hold water. Again, that depends on how high the water level is in the pond area. Whatever you do, start small and build up as work allows.
Jeff

 

[Lennlandmgmt]

Hey guys,

I've been flipping houses for the past 5 years and I'm done with it. About to sell my last house, get a decent payout and want to put some of it in an excavation startup. I'm starting up an excavation, septic and site work company because I love running heavy equipment and I believe that a properly managed and promoted company could be profitable. I could use some knowledgeable advice as I'm new to this space. Please feel free to answer in whole or in part as I know its complicated.

A good friend of mine just purchased a large farm that she wants some work done on it:
Project 1. There's about 15 acres of sand deposits (maybe 15 to 20 ft deep) she wants dug up and turned into a pond/lake. Another contractor was going to do it and sell the sand for a profit. My friend will give me this work if I can get the equipment for it and complete it correctly. What equipment would work best for this project? What is the value in that sand and how would you sell it? I know there are some materials supply yards here I could contact and see if theyd want to purchase it for resale. Cant think of anything else. Long story short, what profit is in this project? The other contractor was going to do the work for free and actually pay some amount for the sand. Anyone have experience in this?

Project 2. Theres about 50 acres on the farm that are overgrown with 8ft tall brush and weeds and my friend wants to restore these so she can rent them as cropland. I want to purchase a CTL and brush mower attachment and do this work. What kind of bidding would you do for this per acre?

Project 3. Septic work. She wants to build at least one residential structure on the property probably 4 bedroom to start. She'll let me install the septic once I'm licensed which should be in a few months. Licensing classes are full right now unfortunately. But this is one line of work I want to get into specifically. From my research it looks like the margins are really good on this. Anyone have experience on septic work? How do you get jobs for that?

Thank you for your help. Any other general advice on how to run a successful excavation company is more than welcome.

I know this is an old thread and I hope you have found success, but my .02 is it take years, and I mean years of experience to make it in this industry. In my opinion the guys who started in the ditch and rose in the ranks would have the best chance at operating a profitable business. And even then that’s not always the case. It doesn’t take a much to dig a deep financial hole that you may not be able to get out of. Just my opinion. I hope it has worked out for you

 

[lake side bob]

Do yourself and the local excavating contractors in your area a big favor.
First make a list of all excavating contractors in your area both full time contractors and part timers.
Then for each contractor make a list of all the equipment they have, excavators, dozers, wheel loaders dump trucks, you get the idea.
Then make a chart.
On the left side list various machine types.
On the top of the page list each contractors name.
Then fill in under the contractor name, the number of equipment by type they have.
It will be eye opening for you. There is much more equipment in your area then you currently thing there is, and you will have missed a lot of machines.
You have to have a large pile of cash in the bank to pay the bills when construction starts up in the spring before the money starts coming in for work done.
Last year two newbees in my area ended up sticking local business with unpaid bills, the business did not bring in enough money to pay the bills, that's reality. Do you under stand what cash flow is, means? If not you have no business being in business. Study what cash flow is so that you understand it.
Each year the manufactures make new machines and the newbees sign on the dotted line and think they own nice new machines. It is called being an economic slave of their own making. The payments have to be made or the finance company takes the equipment back, all excavating contractors that have been in the business for a couple decades can recall a contractor that had equipment taken back.
I give you this advise if you go ahead and get into this business, purchase very good used machines, the old machines do the same thing as a brand new machine with out the large payments.
Do you realize that being a business owner means you are married to the business 24 hours a day; including in your sleep and 52 weeks a year. Time off during the buzy season what's that - enough time off in the winter.
To put together a small fleet of equipment of excavators small and mini, loader, dozer, skid steer, dump truck, trailer pickup truck, shop tools will take an investment of around 3/4 million dollars, and that's with used equipment.
New equipment is cost prohibitive for most small excavating contractors, a CAT 317 excavator today is $250,000.
Dump trucks are $200,00 to $250,000. A local contractor just purchased a new 2023 GMC 1 ton pickup gas engine paid ( a loan) $84,000 for it, I have never paid that much for any one of my machines not even close to it.
This is getting to long I will sign off now.