Gravel Pit Owner Looking for Advice

[lo2e]

Hi everyone, I'm brand new to this forum so I hope this is an appropriate place to post this. I'm the owner of a fairly small gravel pit that used to be in constant operation until about 10 years ago when my father in law operated it. I would like to get it going again since it's just "a hole in the ground" right now as it sits. I would need a LOT of money to get the proper permits and equipment to run it, and I don't have the money. I'm looking for ideas on things I could do, and the following ideas came to mind:

-Seeking out a partner or other investor to provide the upfront capital to get it running
-Selling it (but to whom or for how much, I have no idea)
-Leasing the property for someone else to permit it and mine the material out (approx. 800k to 1M cu. yd. estimated)

Does anyone have thoughts on these ideas or have any others? I'd be open to any suggestions you have. Thanks in advance!

 

[grandpa]

One of the first question's you need to find out is if there's a demand for your product. Is someone else producing in the area that you would have to be in competition for? Grandpa

 

[SPMiller]

Hi everyone, I'm brand new to this forum so I hope this is an appropriate place to post this. I'm the owner of a fairly small gravel pit that used to be in constant operation until about 10 years ago when my father in law operated it. I would like to get it going again since it's just "a hole in the ground" right now as it sits. I would need a LOT of money to get the proper permits and equipment to run it, and I don't have the money. I'm looking for ideas on things I could do, and the following ideas came to mind:

-Seeking out a partner or other investor to provide the upfront capital to get it running
-Selling it (but to whom or for how much, I have no idea)
-Leasing the property for someone else to permit it and mine the material out (approx. 800k to 1M cu. yd. estimated)

Does anyone have thoughts on these ideas or have any others? I'd be open to any suggestions you have. Thanks in advance!

Where are you located, and what kind of rock is in the pit? Aka what kind of products could you sell.

 

[CM1995]

Welcome to the Forums lo2e!:drinkup

Follow Grandpa's advice below and find those answers first before you do anything else.

One of the first question's you need to find out is if there's a demand for your product. Is someone else producing in the area that you would have to be in competition for? Grandpa

 

[lo2e]

One of the first question's you need to find out is if there's a demand for your product. Is someone else producing in the area that you would have to be in competition for? Grandpa

Do you mean if there are any other gravel pits around? If so, the answer is yes, a few within about a 20 mile radius. In looking at their prices for aggregate material, I feel as though I would be able to match or beat any of their prices.

 

[stumpjumper83]

Beating someone's prices that already paid for his equipment, or has other means to pay for his, when your still paying for yours is not a wise business decision...

A smarter decision is to make a deal with a larger construction company that need gravel in your area and have them give you a percentage, say 12.5% or something. They are probably going to want a multi year deal. There are things like the reclamation plan that need to be addressed.

But you can start it back up yourself, but be prepared to go thru a wad of cash, like 6-7 figures worth, just to get it going. 75k for a loader, screen plant & crusher, probably 250k, scales 75-80k, 50k per truck minimum, and that's just a drop in the bucket of whats going to be spent. Then you have to have enough money to feed the diesel to everything for 3 months while you both wait to sell something or wait to be paid for what you sold...

 

[grandpa]

And then you have compliance issue's..... permits,,, zoning issues.... road authority issue's and a real biggy MSHA.

 

[johndeere123]

I have heard of a few people getting a good start by letting a large company come in and use the pit for "free" as long as they do the grubbing/blasting. Then use the gravel for their job and leave a designated amount of crushed material when they leave. You just need to make sure you have good quality rock and your permits before a company will consider this.

 

[tuney443]

Try convincing your competition that it might be in his best interest to buy you out--put on your best poker face if you catch my drift.