Now Just Suppose

[Kenskip1]

Someone decided to purchase a new 4ooolb mini excavator. So now there sights are figuring costs of insurance, financing, ext. Could someone suggest a hourly rate to charge for the machine and operator? I have not as of yet pulled the trigger however the financial portion or "loan" has been approved. If the customer lives say 12 miles from my home would there be a transportation cost? Any incite would be most helpful. Thanks Ken

 

[PeterG]

I never do hourly, I do most job by bids. If not by bid, it's by the half day or full day. I charge usually $450-$600 plus tax for a half day, and $1,100-$1,200 plus tax for a full day. That price includes fuel for towing, and fuel for the day. The higher prices are for my bigger mini excavators, and the lower for my 3500 lb Takeuchi TB016 and Toro Dingo. I would figure like $125.00 an hour min. I would suggest buying a used machine and get it paid off right away. If business is good, then get a bigger machine and maybe a new one. I think the best money to make is not in just mini excavator work (Like dig a trench), but in other work that needs a mini excavator. Say your budget is $35,000. I would by a used 2 ton mini excavator for $20,000.00 and then get a used mini skidsteer for $15,000. With an excavator AND a loader you can do a lot of big jobs. Image below is of us building a paver patio. We also have a 7 ton mini excavator and a large track loader.

 

[Kenskip1]

I never do hourly, I do most job by bids. If not by bid, it's by the half day or full day. I charge usually $450-$600 plus tax for a half day, and $1,100-$1,200 plus tax for a full day. That price includes fuel for towing, and fuel for the day. The higher prices are for my bigger mini excavators, and the lower for my 3500 lb Takeuchi TB016 and Toro Dingo. I would figure like $125.00 an hour min. I would suggest buying a used machine and get it paid off right away. If business is good, then get a bigger machine and maybe a new one. I think the best money to make is not in just mini excavator work (Like dig a trench), but in other work that needs a mini excavator. Say your budget is $35,000. I would by a used 2 ton mini excavator for $20,000.00 and then get a used mini skidsteer for $15,000. With an excavator AND a loader you can do a lot of big jobs. Image below is of us building a paver patio. We also have a 7 ton mini excavator and a large track loader.

Peter, Thanks for the information however if purchasing a used machine what guarantee do I have that something will not go wrong with it? Other work will include planting trees, culverts, drainage, shrub removal, digging for placing under ground power. I simply do not wish to have to worry about something going wrong. Yes I have the mechanical ability to repair a leaking cylinder but things more advanced would cost a lot of money, Ken
I should add that I am not a youngster anymore. 68 last month. I would rather operate the machine than try and determine what's wrong with it.

 

[Keith Merrell]

You have no "guarantee" of something not going wrong with equipment, new or used. I think 4000lb units are great, but maybe you should consider a slightly larger machine like a Deere 26 for the work you are planning on doing?

Also, I would be careful about working hourly, I've never been very profitable that way. It all really comes down to your local market, but when pricing homeowner jobs, sometimes I think, well how much would it cost to rent, and then factor in an operator, fuel, overhead, and risk / liability. I think PeterG is right on with about $1200 per day or maybe a little more, say $1450.

 

[Kenskip1]

Keith, Yes I agree with Peter to a point. As to moving to a larger machine well, this could put me in a bind. My 1/2 ton F150 is going to do the pulling and anything over 4K could put a strain on the drivetrain. And transmission repair is not cheap. Thanks Ken

 

[KSSS]

mini excavators in general, have the lowest warranty failure rate of any type of heavy equipment. The number I saw was 1.7 percent. If your going to bet on anything, a mini ex coming from a main OEM would be the best bet you can make. Pick the machine that offers the best opportunity to make money within the area you want to focus on (I agree, a 26 size would give you more capability). We have had this conversation before. A modern F150 can pull 8K without much issue, some can be speced to pull much more. While it may "strain" the tranny, that is what it is for. What wont strain the tranny is your mini ex sitting in your yard, because you cant keep it busy.

 

[Kenskip1]

mini excavators in general, have the lowest warranty failure rate of any type of heavy equipment. The number I saw was 1.7 percent. If your going to bet on anything, a mini ex coming from a main OEM would be the best bet you can make. Pick the machine that offers the best opportunity to make money within the area you want to focus on (I agree, a 26 size would give you more capability). We have had this conversation before. A modern F150 can pull 8K without much issue, some can be speced to pull much more. While it may "strain" the tranny, that is what it is for. What wont strain the tranny is your mini ex sitting in your yard, because you cant keep it busy.

KSSS: Thanks for the words of wisdom. I like to keep things in my "safe zone". As to the F150 it has the 4.2 liter but it runs well. I have used it to pull a trailer with 4 5.5 foot round bales and it had no problem. However this was back when I lived in Texas. Here we have hills, not mountains but steep hills. As to the 26 yes I thought about one but I am not trying to make a killing. Just something to keep me busy in my retirement years. So as of now it looks like a Kubota U17, A John Deere 17G, or a Bobcat E20, or possibly a Yanmar something VIO 17. And yes the 17 stands for metric tons. Thanks for the valuable information.

 

[Keith Merrell]

Personally, I feel like Kubota and Bobcat hydraulics are both sluggish. I have operated a Deere 17g before some, and I enjoyed it. I would go for the Deere. I think they are about $34k new here. I had a Kubota that had endless DPF and electrical problems, so I hate them. Also, a 26 is a huge step up in terms of productivity from a 17. But the 17 gets into incredibly tight spaces. I would only choose a 17 over a 26 if you want to get into tight places, not because of affordability or towing, or anything else. A 26 will work circles around a 17 in trenching operations, and a thumb would be really handy too for small concrete demo jobs. Also, you could effectively dig under slab plumbing with one.

 

[CM1995]

Figuring your hourly rate is fairly simple -

You'll need to determine the cost of each of the following -

Purchase price of the machine plus life cycle of the loan finance charges
Taxes - here we have to pay ad velorem on commercial equipment for example
Fuel cost per hour - this will be a moving target cost wise obviously
Maintenance cost per hour - oils, filters, teeth, tracks, etc
Labor cost per hour - even if you are operating it yourself labor is a component of cost
Insurance cost - a commercial GL and Inland marine policy is not cheap
Replacement cost - a portion set aside to replace the machine at some time in the future

Finally and most importantly after you have all your costs figured you need to determine what you want as far as a return on your investment and the risk you are taking by working for others.

That being said I'm like others that don't do hourly work. Lump sum contracts with materials are much more profitable. The equipment is just a portion of the project not the main center of focus.

 

[PeterG]

planting trees, culverts, drainage, shrub removal, digging for placing under ground power

The machines you mentioned above ( like Kubota U17 and John Deere 17G), are fine and maybe add the brand Takeuchi in there. I would still buy a used machine with 1200-2000 hours on it. It's likely you won't be putting a lot of hours on it. There is also a fantastic forum called "Heavy Equipment" which you might have already found where there is excellent help on solving machine issues which are typically just cleaning or replacing filters, solenoids, relays, and bad electrical connections. If your business goals are not met, you can likely sell the machine off for what you paid for it. Bad time to get loans too.

To be a real business, you need an old Landscape dump bed truck to bring in your plants, topsoil, compost, gravel, drain rock, or haul off organic debris. You could also get a dump trailer. Besides the dump bed, I still think you need a loader to move materials. Excavator are great for a lot of things, and even though I move a lot of stuff with slings and my mini excavator pallet forks, the size your looking for is not real good at that.

Lastly, you need a 12" wide digging bucket, and best to have a 3' wide bucket. Just having a 2' wide bucket does not help. Also, as Keith says above, got to have a thumb.

 

[Kenskip1]

Peter, thanks for raining on my charcoal. The hurdle that I am facing is a lack of resources plane and simple. Yes I agree with your post however with my miniscule income this may not happen. With interest rates as they are. As I had mentioned that I am now 68 years and feel great. Had prostate surgery on the 7th of 2022.Now cancer free I simply wanted to pursue something that I enjoy. Operating machinery. Thanks again, I value your input. Ken

 

[Tones]

Rule of thumb, hourly rate should be 1% of the purchase price of a new machine. If the market won't sustain that then go contact or walk away.

 

[Kenskip1]

OK. News flash. Unless I win the lottery I will be purchasing a used machine. However I am very leery about the financing options. First off my credit score is in the excellent range. So this is not a problem. My local Deere dealer's interest rate is 4.8%. I will assume that my credit score will be valid with any dealer that I choose. So now the search will be on. Thank you all for the information. If there are any loan officials in this forum feel free to contact me, Ken

 

[PeterG]

For sure you want to find a good dealer! When you find something of interest let us know. Provide the model, the year, the hours, the asking price, and the dealer. Also post some images.

Important things:

1. It may take some time to find the right machine at the right price in the right condition etc.
2. It needs to come with a thumb. Best if it comes with a couple of buckets too.
3. Don't wire any money until your sure about the dealer. There are tons of scams and fake dealers going on right now!!!!! They may have a nice web site, but no dealer location, and they don't even really have the unit.
4. Allow a few thousand for some work on it when you get it. It's a mistake to think the machine is work ready. It's likely it will need a going through.

 

[crane operator]

Do you need to work for other people in order to make the payments? If not, I don't think it matters.

If you need to work for other people, in order to make the payments- in my area there would be no work for a guy, wanting to just bring his 4,000lbs mini, by the hour.

Now if you are a irrigation installer, small landscape wall installer, maybe making decorative ponds in peoples back yards, etc, there's probably work for something small that will get through the gate. Or a electrician needing to make small trenches.

But I don't think that's what you want to do. and I just don't see the demand for that small of machine. Not to mention, every rental store in my area has the small mini's for a pretty cheap rental rate.

And if you're just wanting to do this part time, I don't see any way that you can afford insurance, and if you can't afford insurance, you shouldn't be out digging.

what guarantee do I have that something will not go wrong with it

I will guarantee that something will go wrong, new or used. More than likely nothing serious, maybe just a hose or small electrical. But anything with moving parts and hydraulics is bound to break. One thing about the small mini's - aside from maybe dumping it on its side on a steep slope, they usually don't have enough mass to really tear themselves to pieces.

 

[KSSS]

And I would add to that...you need to have a loader, maybe a stand up machine would work well, to work in concert with the mini ex. But to Crane's point, I don't see how that machine stays busy. Your available work is so limited that I don't see how your going to make payments unless your area is completely different than other part of the country. If you had the money to just own it, and make what you make with it, but clearly your borrowing money to make this work. Unless you have a list of contractors waiting on you, you probably need to really evaluate the money making potential of this purchase.

 

[Kenskip1]

Well here is a site that has a successful business running his Kubota U17.
He had quadruple bypass surgery and had to leave his other business and bought the Kubota. Anyway "Marty" has his hands full with jobs running his mini excavator. BTW he is in California.

https://www.youtube.com/@8978Marty

 

[KSSS]

Have you considered doing the purchase on an RPO? A Rent Purchase Option allows you to rent the machine for a given time period and then roll it into a purchase. It generally works like this. You agree on a purchase price, you rent the machine for a negotiated amount per month for certain number of months. You and the dealer agree on what percentage of the rental goes toward the purchase price. Usually it's between 80-100% of the rent paid each month. This would allow you to feel the market out, establish a customer base, and decide if it can work for you. This method would allow to give the machine back and not be on the hook for the entire purchase price if the market isn't there. It is probably the safest way to get into the market and protect yourself at the same time.

 

[crane operator]

Well here is a site that has a successful business running his Kubota U17.
He had quadruple bypass surgery and had to leave his other business and bought the Kubota. Anyway "Marty" has his hands full with jobs running his mini excavator. BTW he is in California.

I just quick scrolled through some of marty's videos. And just some observations.

Did he have to borrow money for the ex? You didn't reply if you have to have other work to make the payments- and I think that's a big deal.

It shows him doing a bunch of hauling and rescuing of downed equipment that gets hauled to a dealer. Mechanic work. Like he's the old guy everyone calls in the area to fix their problems. Are you that guy with those contacts and that skill set?

Like KSSS mentioned, in one video he's got a helper with a little tracked dumper, you got a helper if you need one, and can rent a ride on skid/ dumper?

Do you have the experience level, and confidence to go out and do outside work?

As much as I detest bankers, look at this like a banker. Do I loan money on a brand new excavator to a 68 year old guy with no business built up, no experience, and no insurance? Or to neighborhood Marty who has his hauling business and has done dirt work and mechanic work all his life? Or to 28 year old Tony who has a landscaping/ lawnmowing and has rented for the last 6 months, and is making money doing renting one?

You're last on that list. Unless- and this is the kicker-

Unless- you have passive income from pension/ investments/ social security- that covers the payments, Then as a banker- I'm not sure I care, its play money and it doesn't matter.


And to add, I really like KSSS idea. Rent a machine for 6 months. Or 2 months. Do what you need to do at your place, and see how it goes. If you aren't making enough to cover rental then you can't afford to own one. If its a rental and it breaks its their problem. Plus you can learn on someone else's machine.

If you're busy all the time with it- then you know buying one is the way to go, and this has been a great little "trial run" with no big loan and depreciation hit.

 

[MG84]

I have to agree with the others, there is only two types of guys that I know that run machines that size: Harry Homeowner that wants a toy, or someone in the trades that absolutely needs a machine that size to fit where needed. There is very little market for general excavation work with a machine that size.

An example of a proper application for that size machine: My brother does propane system installs in a fairly wealthy, well developed but mountainous region. Lots are often very steep, retaining walls, narrow gates etc. He uses a little Kubota k008 for trenching in yard lines when it’s too far or too hard to dig by hand. It’s small enough it fits in the bed of his service truck and the crane will easily lower it down or lift it up into areas completely unaccessible by any other equipment. It’s also just big enough to carry an empty 120 sized tank and set it, avoiding the use of a hand truck on steep ground. Overall a very specialized, but very profitable use of a small machine.

Some other exapmles I know using the 1-2 ton mini’s profitably: septic pumping service, carries it on a little rack on the front bumper of pump truck. Greatly speeds up time needed to dig up septic tank lid for pumping and fits through any yard gate. Another guy that does yard, gutter and foundation drains, some areas have very tight access. Lastly a trail builder that uses them to build single track walking, horse or dirtbike trails in steep country. Can’t build a 3’ wide trail with anything larger.

I’d also bet the amount of money any of the aforementioned examples
make (save?) is well in excess of what you could make doing hourly work with a machine that size. Specialized work = specialized machine and the profits that go along with it. Figure out a business model that can fully utilize a micro mini, figure out how to buy a larger machine/truck (used) or don’t do it at all. No way in the world would I be borrowing money for the business you have proposed, I think you’d be setting yourself up for some tough times.