View Full Version : Trying to get started
09-22-2004, 10:10 PM
I have been lurking for a while in this forum trying to learn all I can about the business and have read it from the beginning to the end. I have notice a lot of you have a lot of expensive equipment and wanted to know how did you get financing? How did you get started? I am looking to get in on the small jobs at first like construction site clean up ,clearing undergrowth etc. Are there any other forums like this if so I would like the links if it's not against Lawnsite rules.Thanks
09-22-2004, 11:54 PM
I would love to try to help but I'm still a student. So from someone who is limited financially, the best of luck.
09-23-2004, 02:15 AM
Sounds like you're a candidate for a lease program. As long as you can commit for darn near 5 years, you'll be okay. LOL. That's a really long time to commit a piece, I would honestly buy something used at first or just rent for a while until you have the funds to throw into equipment and have an established business with some good cash flow. The joke is that you can buy a relatively nice skid steer for around 11K and that would only take about 500 hours of competitive pricing to score a profit on that investment. The maintenance is relatively cheap and we charge $70 an hour for our skid. Guys around here in the excavation biz are charging $85 an hour for a small dozer that is more than 4 times the cost of a skid steer. Skids are money making machines. We figure that in the lifetime of our machine, about 2,000 hours, we could net profit $130,000. Do the math.
I started out with good credit and had a real job. I then bought a skid steer through CASE CREDIT. I made the payments from my steady income at first. Slowly it started paying its own way. I started doing clean up jobs, subcontract landscaping, whatever I could. I would suggest doing it on the side until your ready and sure you want to commit. Companies are more willing to loan you money if you have a steady job (non-self employed job). It also helps take out some of the stress of starting a business. My relationship with CASE CREDIT has been real easy. We don't miss payments and they give me all the money I want. They even bank rolled my new TAKEUCHI excavator.
12-25-2004, 09:49 PM
I was very fortunate enough to get a loan from a buddy (I lost my engineering job of 10 years and had no savings to speak of). The deal was if I didn't make the payments he got to keep the equipment or sell it and whatever profit or loss was there, I had to make it up. That was in '99. The first loan was $6500 for a backhoe, then $4500 for a dump trailer (I just bought a new Dodge Ram diesel and a trailer before I was laid off). He gave me 3-5 years to pay him back. I did it in less than 2. Then he loaned me $14,000 to buy a New Holland tractor 2 years ago. I'm half paid off. I also got a loan for my new skid steer through New Holland Credit last year, with $6000 down. The $6000 came from the same buddy buying my old skid steer (I got this old machine in trade for a tricked-out Jeep). As of this year I have about $300,000 in equipment. And I work by myself still. Though it seems I don't have a pot to p__ss in sometimes when the weather is bad and I can't work!
12-26-2004, 02:48 AM
I wish I could start out my own business. LOL. But, I'm only 19 and that's the age of limbo. Can't get credit cuz you don't have enough credit but they don't want to start you up to get credit because you're only 19 and may not have tons of money. Especially if your a full time college student. :dizzy:
I think it's a good idea to rent machines first before you buy one. You never know what type of work you do most and what type of machine you feel comfortable with and what type of machine you think you can do the job with quickest and neatly until you start up. Some guys that rent from us do so much excavation that all they rent from us (the majority of the time) are our kubota 121 excavators. Some always rent the Kubota TLB's and some (like 99.8% of this forum) use skidsteers. :D Then you have to worry about all the supplies it takes to keep the machine maintained and running to prevent breakdowns. So much stuff!
12-28-2004, 10:28 PM
i FEEL YOUR PAIN ON THIS ONE. tHE THING TO DO IS TUFF IT OUT AND BUY ALL YOUR STUFF CASH YOU KNOW THE SAYING MONEY TALKS BS WALKS. IKNOW THIS SOUNDS EAISER SAID THEN DONE. PUT YOUR MIND TO AND BE VERY DETERMNE. AND YOU COULD DO IT. OR TALK TO mR. EARTHWERKS FRIEND
12-28-2004, 11:14 PM
Sorry, but my friend is all tapped-out (oh yeah, I forgot to mention when his wife found out he was loaning me money she blew a nut 'cause we never drew up a contract).
I asked him for 20 bucks and he had to borrow it from me.
One way of making some money, is buy equipment at auctions cheap, or out of the classifieds paper. Get your use out of them (make some money), fix 'em up (cheap paint job) and sell them for much more. If you keep turning them over eventually you will be paying cash. Need "seed money"? It's a gamble though (and what in life that is worth it isn't) but use a credit card or get a personal loan through a credit union or bank. Don't buy from a rental house or equipment dealer because you won't be able to buy the equipment, make repairs and sell it for more than what you paid for it. And you could very well end up losing your shirt because something breaks. Even new stuff breaks.
I've been lucky to find equipment deals: Last year I bought a 6,000 lb. Case trencher with a backhoe and backfill blade that nobody wanted (not a good sign). A private party wanted $2500 for it (she said over 20 people looked at it). It wouldn't start (battery dead) or turn over (starter shot from trying to start it). I told the girl I'd give her $1000 for it as-is. (If it didn't run, I could part it out--the engine block alone, if not cracked was worth that much---and if it ran good, which it did, I later found was worth $3000-$4000 since it was used in Case dozers and backhoes). Put a new batt. and starter--and switched the fuel pump wiring so that it would run when switched "ON" instead of "OFF" (dumb luck--since I'm not a mechanic). It fired up and the girl who was selling it couldn't have been more disappointed that I got running-- in her yard yet (I was prepared to have it towed on a flat bed). I replaced some teeth on the digging chain and a new fuel pump so I might have $1500 into it. So far I've made about $3000 with it. But it doesn't always happen that way. Take a chance and you might be amazed at the results.
01-06-2005, 01:24 PM
As usual, everybody has given some pretty good advice...
I'm in the same situation as you. Trying to get started, initially as a side business, but with hopes and dreams of going full time. Up to now I have resisted the urge to run out and start buying equipment (every day it gets a little harder...). To me, buying the equipment is the easy (and fun) part, it's building your network of contacts that's the hard part. That's the part I've chose to focus on first. I figure if I can get my name "out there" and find enough work, then the equipment will be easy enough to come by.
Most people I've talked to and everything I've read suggests that unless you can keep a piece of equipment busy 70% of the time, you're better off renting it than buying it. In the end you have to look at your own situation and see what makes sense for you.
So far I have rented what I need. Renting has the advantage that you can get the exact equipment you need for the job rather than trying to make-do with what you have. The downside to renting is that it can be difficult to be competitive on small jobs (one day or less) because the cost of the rental is almost what the "going rate" is around here for a machine and an operator (particularly true for skid steers), and I don't like working for free. However, if you can string together a few small jobs in a row, and rent the equipment for a longer term, then the disadvantage goes away.
01-06-2005, 04:22 PM
Before I bought my new skid steer I had to run the numbers in my head too. Eventually my head hurt so much I just relied on my gut feeling, which I have come to rely on quite a bit. (Had I looked at the numbers BEFORE I started the biz I wouldn't be here talking about it.) Sometimes you just gotta do it. Trying and failng is not as bad as not trying at all.
I rented a machine for a month and the bill came to the regular price over $3000 based on daily rental discounted to a rate of $1800. That was same amount of profit for the job! I too don't work for free. That $1800 charge was a wake up call for me as I did some quick number crunching and came to the realization that even at $1800 a month I could buy a brand new one for less than $480 a month--- that's almost like paying (having) for one for more than nearly 4 months for what 1 month's rent cost. My dealer forgave the entire rent's fee when I decided to buy the new machine from him, so that $1800 loss turned into a genuine profit for 4 months worth of payments.
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