how to make a living starting small

[Acivil]

Just because they send you a contract with terms that are not acceptable to you doesn't mean that they won't sign one with terms that are. You just have to start negotiating now that you have a place to start.

 

[rsherril]

Exit Plan - How to get out of the business ahead of the game. Mine is fairly simple as this is not my primary income. My anticipated expenses including capital investment pro rated over ten years. After ten years I expect to have paid my equipment and expenses off. At that time I can sell or go for a while longer. To date, (five years), I am 75 % paid off on my original investment and 100% on expenses. Of course I'm working for less than minimum wage my self, but solved a lot of issues getting our roads taken care of in a timely manner. Perhaps you might say I should not even call it a business, however I expect my "hobby" to pay for itself and might even make a little when I do exit. I understand that not all contingencies can be planned for and I could see my grader sold for scrap value before I meet my goals, (had that happen to a 180 cfm air compressor, when I burned a crank shaft, but it did serve the larger goal in the meantime).
I think it comes down to setting short term goals with a long term goal in mind. HEF is invaluable in this respect and I thank you people for the information that has helped keep me and my machines working that direction.

 

[lowbed driver]

Like others have said - have a plan.
-Do some research. No use starting a business with a dozer when there is no dozer work. The work needs to be there.
- know your general contractors as well as your competitors.
- try and be versatile. Dozer is a machine with fairly limited abilities when compared to excavators,wheeled and tracked skid steers and track loaders.
- have your own means of moving your machine(s).
- take advantage of the fact that you already have a dozer. Try and work out a deal that allows you its use to get started with a next to nothing hourly charge by its owner. Reassure them that once on your feet financially you will square up with them. This would allow you to take any capital you have and get a second machine such as a small excavator or track skid steer to help your company be versatile and go after more work.
- learn to run your machines. Trust me. I have seen the downfalls of owners who cannot do the work themselves. Lets say you quote a job for a bunch of finish grading on a site. Your operator can do the work but you would have a hard time. You may find yourself with a guy who suddenly wants more money,a company vehicle etc. It just starts to snowball from there. You need to be able to do the work.
- with that said, if you do grow , you are going to need a good 'right hand' man. Treat him/her well. Good pay, vehicle, maybe a small percentage of profits etc. If you treat them poorly be prepared to be training your future competition.
- try and be honest with your customers. If you say you will do something .Do it. Meet schedules, costs etc. on time and do not nickle and dime your customers. If an extra is legitimate, that is fine, but do not go after every little thing. Short term gains may be had but you will loose the respect and ultimately the work of clients.
- when I was 26 I was learning how to operate machines. I was no where near ready to handle contracts,money,employees etc. Be willing to wait a few years and in the mean time learn your trade,become the best (or one of the best) at what you do and learn by reading up and studying business and how it works.

Good luck on your endevors

Lowbed Driver

 

[AustinM]

I agree with you acivil, but at first ill only want hourly jobs, cuz being able to quote accurately takes time and practice

Yes it does, but being able to quote work the same way a general contractor has to is extremely important to the estimator for the GC looking for quotes from subcontractors going into a hard bid.

For example, a paving contractor is bidding a large paving job that has some dirt work on it that is paid by the cubic yard (or cubic meter, or however it's paid just not by the hour) and asks for quotes from some local dirt movers. They send a quote that says "$150/hr for dozer- $225/hr for scraper." (or something like that) This is extremely frustrating for that estimator because he then has to either call you back and ask for a unit price or he has to take extra time and basically figure your estimate for you based on your hourly rate so he gets the right number in his bid. If you are the only person in your market area supplying a quote for this type of work, you can get away with quoting just hourly rates for a while. But if you are competing with other subcontractors and they quote it differently than you do, that estimator might throw your quote out even though you may have ended up cheaper if he backed out the price per hour for the other subcontractors.

If you can secure the hourly work go for it because it carries less risk but every time you do it, be tracking cost and productions so you can accurately give unit price quotes when it's necessary.


Good Luck!!!

 

[mei8555]

if you can, borrow the 450j. see if you can build a customer base. while doing this over the course of a year or so, log what other contractors have service/machine wise and see if you can develop a niche that no one else has. find a customer base than no else seems to care about and take care of those customers. purchase equipment than no one else has and exploit it to your full potential. look at what the rental houses have and see what they are overlooking.

for example, where I am from, everyone and their dog has a backhoe. so I don't own one because I cant justify it. In the past I hired others with backhoes to finish a job I couldn't do such as a septic system, or utilites tie in, and when I was younger and less experienced the backhoe owners would sometimes take my customers after completing the job that I hired them to do. that is a nasty feeling.

I recently purchased a Takeuchi mini ex just for the purpose of not having to deal with other contractors and the issues that arise from such arrangements.

I started my company in march 2002 with no experience other than being a farmhand. I purchased a used D4c and immediately had to start dumping money into it. 60 days later I broke my leg and was laid off at my job as a warehouse employee for walmart. it was very rough going at first, with no way to haul my equipment. My father helped me out and loaned me his 1979 chevy flat bed 1 ton pickup, and purchased me a 30 ft. gooseneck trailer on a credit card with zero interest. I was very thankful and proud to have the trailer and pickup. which leads me to my next point:

be sure you have a means of transporting your own equipment. I cannot stress how important that is. your competitors will not haul your equipment when you need it the most. it does not benefit them to do so. you cannot afford to rent a machine and then pay a delivery and pickup charge. it simply wont benefit your bottom line.

last but not least, being mechanically inclined will not hurt a bit. there will be times that you will have to spin a wrench or two, probably more than not. also have enough operating capital to finish a job.

when I landed my first dozer job, it was cleaning out a patch of stumps for a 20 acre show pen for cattle. I started this job on crutches, with no income for 90+ days, and when I fueled my dozer up I would back my 4wd lifted dodge up to the rear of the dozer and fill it with multiple 5 gallon jugs. was not fun on crutches. but I finished the job, and worked for the man clearing his land for many years afterwards. we became friends and I enjoyed working for him.

So, if you're gonna play this game you have to have a good attitude, and some good luck never hurt. looking back on it all I don't know how I made it, but i wouldn't change a thing and feel quite fortunate and blessed to be involved at the level I am now.

i agree you need a good attitude and alot of hard work. just the way you started. however its not going to be easy and equiptment truck, trailer, insurance, plates are all very expensive. you need to run the dozer your self and be able to do repairs your self. it will be tough but it can be done.

 

[thetabop]

thanks AustinM, ill keep that in mind

 

[CM1995]

Yes it does, but being able to quote work the same way a general contractor has to is extremely important to the estimator for the GC looking for quotes from subcontractors going into a hard bid.

For example, a paving contractor is bidding a large paving job that has some dirt work on it that is paid by the cubic yard (or cubic meter, or however it's paid just not by the hour) and asks for quotes from some local dirt movers. They send a quote that says "$150/hr for dozer- $225/hr for scraper." (or something like that) This is extremely frustrating for that estimator because he then has to either call you back and ask for a unit price or he has to take extra time and basically figure your estimate for you based on your hourly rate so he gets the right number in his bid. If you are the only person in your market area supplying a quote for this type of work, you can get away with quoting just hourly rates for a while. But if you are competing with other subcontractors and they quote it differently than you do, that estimator might throw your quote out even though you may have ended up cheaper if he backed out the price per hour for the other subcontractors.

Very good advice if you are wanting to do bid work.

Try to be as detailed as possible in your bid concerning what scope of work you are pricing. For example if its clearing/grubbing, stripping topsoil, bulk cut/fill and re-spread, list each item separately and your quantities either taken off by you or quantities given to you in the bid documents. Price each portion separately with a subtotal on your bid. The goal is for the estimator you are presenting the bid to knows that you have put forth time to give an accurate bid from the contract documents. Estimators and PM's don't like surprises after the job is let and they think you have a certain SOW (scope of work) covered and you didn't.

Now on the contrary don't be too detailed in breaking out your pricing as I believe this can lead to bid shopping or breaking out certain SOW's because you are cheaper than the guy they want to use - you want the cream of the job to go with the ****tier parts of the project.

For example when I bid the storm sewer portion of a job I don't break it down into price per FT of pipe or price per structure. I list the amount of pipe, structures and anything ancillary to that SOW but give a lump sum price.

I have had many an estimator go with my bid, even if I wasn't low, because it was more detailed than the others and of course from past experiences working with them. It takes attention to detail from the bidding stage to the final close out and every stage in between to be a successful contractor.