How much do you guys charge for dirt work?

Discussion in 'Heavy Equipment & Pavement' started by thebobcatkid86, Mar 4, 2007.

  1. thebobcatkid86

    thebobcatkid86 LawnSite Member
    Posts: 100

    Im sure this has been discussed at length somewhere on here but I want to ask myself. As I have mentioned elsewhere I am trying to keep my overhead low to maximize profit. But as always no matter how I try overhead keeps going up, and it may go way way up soon for me as I turn my loader into a legit business operation. That however all depends upon how much revenue I take in, in the next year or so. Say what you want, Ive heard it all from the grass guys already. Anyway I have a Bobcat 453 and I have been trying to establish an acceptable hourly rate for my machine. Last year my going rate was $40/hr metered and $15/hr 'standby' time. However this is changable since all my work last year was for good friends of mine and my family. So therefore this can be considered my 'good buddy' rate. I have heard some people say that I can get upwards of $65-70/hr. regardless. While Im sure this maybe true for full size skid steers, mine is rather small and not as capable as a full size machine. I can do a great variety of work with it though. I would like to be able to charge more but I am squeemish about scaring off work because of people thinking my rates are too high. I just want to be able to make an honest profit without scaring people away? Do you think that I could make $50/hr reguardless of wheather Im running my equipment every minute Im on a job? Is even this too low? I am a small operation but I have big plans for the future and need to find more higher paying work than I have been. I realize that this is kind of the question of the eternal struggle, but does anyone have any advice?
     
  2. ksss

    ksss LawnSite Fanatic
    Posts: 7,129

    I will give you my thoughts. Your equipment is very niche orientated. If the equipment is needed to perform a certain task like paver installation or whatever it easily pays its way and makes you money. However, if you are trying to utilize your equipment to work by the hour or perform more standard landscape or excavation tasks you are in for a very rock road. Your skid steer is not large enough to compete for larger landscape/excavation jobs. The options as I see them is to either develop a niche that incorporates your 453 such as paver installs, small yard landscapes or whatever I don't really know what else you can do with it. The other option
    is get a larger more capable machine something in the 2K lift capacity range. Life will be much easier gaining access to better paying jobs. Keep you 453 if you can, it may help with other projects, but you need something to generate income. A 453 used to move dirt is not going to get it done alone. You may get 50 an hour. You will be forever locked into the small homeowner type jobs that don't pay well and don't last long. It all depends on what you what to accomplish I guess. IHMO Go bigger or get out.
     
  3. thebobcatkid86

    thebobcatkid86 LawnSite Member
    Posts: 100

    I appreciate your thoughts. Basically so far I have found, I am mainly been using the 453 to minimize my rental costs. I'll give you an example, I have had a couple of waterproofing/drainage install jobs where I have rented a 2.5-3 ton excavator to do the dig out. I then can send the excavator back almost immediately saving me a couple of days rental right there. Then as long as I dont have to load any full size trucks, instead of renting a loader to do the backfill/gravel work, I simply bring in my machine and get it done. So far its basically been a compliment to the machines I rent to do jobs. I have given several cards to landscapers and I hope to be getting some sub work this year, doing small to medium mulch, gravel, and digging jobs for guys that mostly do grass and dont have the capability. Eventually I plan to have a F350 diesel, with a dump trailer and a S185 skid steer or a Cat 277 CTL and maybe even my own 435 excavator. And if things get really good I'll get my CDL and I'll step up to full size equipment - a Mack tandem with a tag, or a Pete 359 tractor with a low-boy and a dump trailer, a Cat 312 or 315, and a D3 or D4 and do basements and land clearing along with everything I adverise for now. So you see I have plans Im just tring to start out within my means. If that means having to run rental equipment for a while then so be it. Besides my grandfather was telling me recently about a friend of his that is also in the excavating business. He has a Pete tandem and a triple tag, thats all he owns. He rents everything else and simply builds the rental cost into his price. And I was skeptical at first but my grandfather says but he says it works for him. Also that he has a room in his rather large house I might add dedicated specifically to his antique weapons collection which is my grandfathers mutual interest, which my grandfather told me is probably worth in the millions.
     
  4. ksss

    ksss LawnSite Fanatic
    Posts: 7,129

    I guess whatever strategy you think will get you to where you want to be. I don't think you can rent everything for every job. However, there are many ways to skin the excavation cat and this maybe another one of them. It would not be for me but thats not to say it would not work I guess.
     
  5. MRBsx2

    MRBsx2 LawnSite Member
    Posts: 85

    Most of the time with builders and some home owners i charge by the hour....my skidloader prices are $65-70 per hour with a 4 hour minimum, My jd 110 backhoe is $75 per hour 4 hour minimum. Most of the time when i work for home owners they want prices up front so i do not work by the hour i will figure out how many hours the job will prolly take and add a few more to the price plus materials with 30% on top of materials.
     
  6. Sunscaper

    Sunscaper LawnSite Senior Member
    Posts: 306

    I totally agree with KSS. Your machine is great for certain applications, however they are few and far in between. I have an F-350 dump truck that I use in the business for our affairs such as paver, landscape installations. I can save alot of time and money subbing out a tri-axle for a day for larger cut and fill operations. My truck is only valuable to me. Hiring it out is worthless when compared the a tri-axles capabilities and rates. A larger skid is what you need to be competitive in the market. Time and money are your two most valuable resources in business.
     
  7. thebobcatkid86

    thebobcatkid86 LawnSite Member
    Posts: 100

    Thats basically what I do as well. I am just trying to figure an hourly that works so I can have something to base my quote's labor cost on.
     
  8. thebobcatkid86

    thebobcatkid86 LawnSite Member
    Posts: 100

    Sunscaper - I totally agree with you and Ksss. I know I need bigger equipment. I know my equipment cant do alot of things at a S220 can. I just dont have the working captial, nor the credit to be able to affrod it right now. I want to be in that market, I want to be able to compete I just cant afford to run out and buy even a used full size skid steer and dump. I plan to as soon as I make enough to be able to afford it. First probably a F350 dump or a F250 and a center hitch dump trailer, either way used. The very shortly thereafter a S185 or similar machine, probably also used. If I get that far and can really make the bigtime Id like a Bobcat 435 excavator, and if I really can make money with that setup I might consider going bigtime. Mack tandem, CAT machines lots of 'em. A D4, a 939 or at least a 277, and either a 312 or 315. with that Id do basements, landclearing and small demolition and hauling. So you see I have big plans Im just starting small, trying to make it without risking my ass with huge loans. At least for now. BTW I really appreciate you guys advice.
     
  9. Sunscaper

    Sunscaper LawnSite Senior Member
    Posts: 306

    You sound very enthusiastic about the future and have a good plan for it. Good thinking about not taking on big debt. I did just that and can say there are pros and cons to having new equipment and used equipment also. Just remember to study your market and look for voids that you can fill and remain profitable. Do that first and you'll be fine. I know I have been guilty of emotional equipment purchases that I just seemed to talk myself into because I like equipment. But remember your profitability ALWAYS comes first. Best of luck.
     
  10. ksss

    ksss LawnSite Fanatic
    Posts: 7,129

    I agree that debt management is important. However small business is a risk. Debt is a part of small business and hopefully as a business you are around to see the hard work and risk pay off. Starting small is for most of us the name of the game. I bought an 1840 CASE that was a year old and traded in a Bobcat that my dad gave me. It had 500 hours on it. I ran that machine to 3000K hours and made good money with a few attachments. I have tried to work my way forward. I have been fortunate overall, some due to good decisions and some (ok mostly) due to a lot of luck. I am also aware that one big job gone bad and I could lose it.


    Remember this: bigger iron does not garrantee a bigger net profit. If you find areas to make money with smaller machines you don't need all the big iron. It is fun to run and everyone thinks your somebody, but what really matters is whats in the bank account at the end of the year. I know many guys that have big iron and small bank accounts. Well planned debt will get you to where you want to be. If you wait until you can cover everything with cash your plans will be slow in coming if at all. So I guess what I am trying to say is that do your research on equipment, be the best operator you can be , learn as much as you can about your market that is to say what areas are not covered, what niches could be filled by you. What you don't know or don't want to know hire someone that does. I would not spend too much time at this stage your in. My concern will be that you will struggle breaking into larger markets due to a lack of equipment. Renting everything makes you look unstable and unsuccessful. Image is everything, customers both contractors and civilians want to know your successful. They want to feel good about hiring you. Nobody wants to have their job done by someone who isn't the best at what they do. That is all human nature. If your goal is to stay in that small job area then your set. If your hoping to get on to other things you need to position yourself to do that. IMHO
     

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