How high can it go

[Spud_Monkey]

Having the ability to store everyday commodities and buying when prices are low helps one weather the bad times such as these. The writing was on the wall just some thought in disbelief it was going to happen since the media likes to hyper inflate the media. Somewhere between where when this just started and now one should had plenty of time to stock up. Yeah not everyone can stock up on bulk fuel but any prepping by stocking up negates some of the inflation of things you couldn't stock up.
I stocked up on bulk fuel for my own projects back when it was below $4 a gallon, still sipping on it and I know it will eventually hit $5.50 to $6 a gallon for diesel as it always goes up come Memorial Day so each trip in town I'm hauling back 100 gallons and will stop when it hits $5.50. Got about 750 gallons of diesel to burn through but it's enough to weather this out, get all my projects done for myself and if not I will park the equipment till it drops down again. As for customers I will forewarn them, you are eating the fuel bills on these projects and they fluctuate with the market.

 

[673moto]

View attachment 258515

They’re a bit optimistic with estimated inflation at only 4.3% this year... don’t ya think?

 

[Truck Shop]

I don't owe a damn thing so I'm not to concerned. The car is a 2017 with only 11,000 miles on it,
I paid cash for that.

 

[Spud_Monkey]

They’re a bit optimistic with estimated inflation at only 4.3% this year... don’t ya think?

Old article, it's already been broken

I don't owe a damn thing so I'm not to concerned.

My properties are paid off, vehicles are all paid in cash, no credit cards yep I'm sitting pretty. I just find different ways around building supplies to keep building here if they are too expensive.

 

[Truck Shop]

And the last time the tank was filled was last September.

 

[Shimmy1]

Some of you can take this any way you want, but I find it kind of funny that those who have not a single horse in this race are poking fun by downplaying the situation, or bragging about how smart you think you are by having your tanks full and no debt. Well, pretty hard to build and maintain a business without debt, and a lot of us weren't in business in the 80s, or our family lost their a$$ and we had to go it from scratch.

So, to those that have shared their opinion and what they are currently doing or planning, thank you.

 

[673moto]

I’m betting those that are in that position have worked their asses off getting there and maybe have earned some bragging rights.

not me tho... I’m late to the game and still very much on the grind

 

[Truck Shop]

Shimmy no one is poking fun at the situation, We don't travel and waste gas. Anyone employed is
at risk if the business owner makes a foolish decision. Hopefully that doesn't happen, but reality is--.

 

[Spud_Monkey]

I started off at 17 years old living on the streets behind a pool hall for couple of years, I have since retired from one career at age 38 (military) while picking up clients for side jobs that expanded to over 20 that had my hands in everything mechanical one can think of from fishing vessels to manure spreaders, all the while building what I have here. I have since moved on from all those clients and started another side hustle that I run a few pieces of machinery at too. With a 977K Cat loader, backhoe, dump truck, semi and counting on equipment I will acquire I very much have a "horse in this race". All I have listed is paid off too and I'm only 40 years old (almost 41). I had to start over from scratch and lost my arse in a divorce and after being sued.

 

[funwithfuel]

I know there are rules regarding politics, I'm not preaching one side or the other. All I'm saying is remember all this when you cast your ballots. We need to reign in all the alphabet agencies.

 

[KSSS]

Last time this happened one of the things that kept us going was being diversified in what we did and offered. I have been able to maintain that or increase it since the 2008. We now do a fair amount of Gov. work on top of light commercial and residential. Hopefully, we can keep moving as things slow down. Competition will be tough, countless new companies showing up, everyone will be fighting to keep their economic lives, alive. I am not looking forward to what comes next.

 

[AzIron]

Some of you can take this any way you want, but I find it kind of funny that those who have not a single horse in this race are poking fun by downplaying the situation, or bragging about how smart you think you are by having your tanks full and no debt. Well, pretty hard to build and maintain a business without debt, and a lot of us weren't in business in the 80s, or our family lost their a$$ and we had to go it from scratch.

So, to those that have shared their opinion and what they are currently doing or planning, thank you.

Hey I hear you dad talks about the 80s quite fondly cause he started in 79 and all through the 80s he couldn't afford to borrow money

I have had debt still have some but have been able to cash flow most of our growth in the past few years

I look at it this way I can handle financing new iron but used iron we pay cash and if it I cant get 50 percent utilization a year out of it then I dont need new witch puts me back to cash or rental and right now you can forget rental 2 week waiting list minimum for anything si we have been shopping hard for the diamonds in the rough machines cosmetically need work mechanically in ok shape and plan to have to drop some money to go to work with it that approach has suited me well so far

I really do believe equipment prices are going to drop a lot in the next 8 to 12 months but if you can keep a machine busy the rest of the year because you have it today you might be better off with the machine I know the ag market doesnt trend the same as residential or even commercial for that matter so you might be in a better spot than most of us dirt guys

I know if things sour residential not going to be busy for a while we are on some appartment projects that are pretty likely to go no matter what the economy does I also have really developed our small end of the buissness for doing TI work in a recession commercial remodels pick way up also one of my customers does a lot of civil infrastructure for the feds so I could probably find a small piece of that pue if I really needed to but not sure if that will be worth it

My market here now is saturated with tilt warehouses and 2 big microchip plants the warehouse work will stop if things get ify so there are a lot of companies that will get hurt over night because that's all they do is 100 thousand square foot plus buildings I like my chances because we are diversified and dont just chase one style of work

Diversification of customer base is the best defense against a bare market and I think that's the big one and be prepared for sporadic cash flow

 

[Shimmy1]

Aziron, I help a farmer friend of mine, but that's as far as I go in ag. Maybe you're referring to my customer base being predominantly ag? Four years ago he let me take the reins of the business I built with his financial backing. I owned the scraper already, had purchased the 1150G that spring, he sold me the tractor that pulls the scraper and it was off to the races. I've been renting the 210 from him, which I will continue to do since we've grown to the point where I need two hoes. In the last two years I've also purchased a second tractor and scraper, two trucks, and my own service truck and tilt trailer for hauling the skidder and attachments. I still use his RGN, but I pay for all normal maintenance and our relationship is such that we don't worry about it much further than that. I help him for a couple months in the spring, mainly because he needs the help, and I feel I owe it to him for helping me get to this point.

Bottom line, I'm just asking questions to gauge the feeling of other guys around the country. Whether it's Joe down the road with a mini, a skidder, and a dually, or Mr. Johnson who owns 100 machines and does $10M a year in revenue, we're all in the same boat. By that I mean none of us except the guys that have guaranteed contracts for the next 5 years really know what the future the holds, but at this point in time I feel like I'm up against the wall. I've spent $60k on rent in the last 4 years, and with the work I have lined up this year, I couldn't see giving another $35k away that I could put towards ownership. But, like KSSS said, if the music stops, I sure hope to hell there's a chair left for me.

 

[AzIron]

Sounds like your in a solid place there are 2 things I have learned in the growth of my buissness over the last 6 years and buying out my parents

First is and probably most important is that it's ok to turn down work at the standpoint of it's no longer healthy for your buissness to expand until x y and z are taken care of and it doesnt matter if your paying cash or not at certain points growth can be harmful and the economy is not necessarily the driver for what can get you

The other is how much debt you carry my principle is no more than 20 percent of my assets can be on payments I do around a million a year in revenue my stand still overhead only requires 8 machine days a month to break even right now we are doing 70 machine days a month and this allows me to sleep great at night no matter the economy I learned 4 years ago in a cash flow pinch that no amount of anything was worth my peace so I dont put my self in leveraged positions

Your mileage may very and what keeps me up at night might not bother you so take that with at least one grain of salt

 

[JD955SC]

Some of you can take this any way you want, but I find it kind of funny that those who have not a single horse in this race are poking fun by downplaying the situation, or bragging about how smart you think you are by having your tanks full and no debt. Well, pretty hard to build and maintain a business without debt, and a lot of us weren't in business in the 80s, or our family lost their a$$ and we had to go it from scratch.

So, to those that have shared their opinion and what they are currently doing or planning, thank you.

One of the things I learned from my fathers business is even if all assets are paid for and such that it’s still easy to be hurting during rough times. His was a completely different business than construction but I remember going down to his shop with him back in the day during a similar time as the present and for weeks having work that we finished in a few hours and having nothing to do for the rest of the day, just standing by the phone and hoping his customers called in with more work. Seeing the stress and worry he went through to get the job done, keep the business running, and support the family pretty much soured me on owning a business as my primary income. I’d wager everybody here is quite worried about r what’s coming down the road.

 

[emmett518]

Interesting thing about the southwest is track housing is all built with tile roofs witch needs Portland to make so anyway tile is on backorder right now so it's becoming more of a thing that houses are framed and waiting for roof tile to load the structure so the can top out and drywall and of course stucco this causing delays well over a month so on average right now if you buy a track house it's a year to move in do you think anyone last summer was thinking about these interest rates when they signed

My generation has never experienced historical standard interest rates so once above 6 percent for a house I dont think people are ready for that and they cant afford that interest on these prices

I see commercial having the same problem here with delays and rising interest there is no way to maintain a budget

There is no cure for high prices like high prices

This kind of explains things.
https://m.youtube.com/watch?v=MesrrYyuoa4

 

[Vetech63]

I don't carry a lot of debt, but I do have some. It would be pretty dumb to me if anyone is not concerned with the state of things at this point in time. As a safety, I'm in the process of setting up a line of credit with my bank using non-essential capital to collateralize it. I'm not going to be caught with my pants down again like I was after 9/11. I have no plans to use it, but I want to know its available if worse comes to worst. Anything I need I pay cash for..............if I don't have the cash then I don't need it. My home and property are paid for so I can weather quite a bit if I have to.

My problem back in the day was being too credit dependent. When 9/11 happened, my work disappeared overnight and didn't recover for years. I wasn't diversified enough at the time either so once the construction bubble burst here it was all over. Funny thing about creditors......they are your best friend when times are good but, they are your worst enemy when things go south. Within 2 years I had lost everything to my creditors and NONE of them gave a dam. I promised myself that I would NEVER place myself in that position again EVER. I diversified A LOT, and I worked with my own money. To this day I trust no banker..... they beat your door down trying to loan you money when you don't need it, and when you do need it, its impossible to get it.

You guys have no idea how difficult it is for me to set up a line of credit but I feel like I have to now. I hope I never need it.

 

[Truck Shop]

A very important step-don't carry much on the books. Make sure accounts receivable
stay at a very low level. You can eat some labor but you can't eat parts.

 

[donkey doctor]

My Dad used to say " The bank will be glad to loan you an umbrella on a sunny day but as soon as it starts to rain they want it back" d.d.

 

[Mike L]

Diesel hit $6.09 here on Saturday