Transitioning into more machine work??

Discussion in 'Heavy Equipment & Pavement' started by KrayzKajun, May 14, 2014.

  1. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Posts: 10,742

    We seem to be making a positive name for ourselves in our new service area. It's crazy how holding all our state licenses and being insured can set you apart.

    I've got a stack of estimates to complete and all are for non Lawncare related work. We are really getting a great response for bushhogging and some nice clearing work. I've got three drainage jobs to look at this weekend. Have a good chance to become the main contractor for site work, drainage & landscape for a nice sized general contractor.

    I don't really have a question to ask or maybe I do.
    Should I keep Persuing this type of work and really take my company to a new level. I've got enough work lined up to justify purchasing a tracked CTL and maybe add a mini x to the fleet by end of summer.
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  2. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Posts: 3,376

    Diversification IMHO can work for nearly anyone, especially if you have done your market research and determined how strong the economy will be for now and in the future. Nothing crazy about holding your
    qualifications out for the consumer to know your a contender. Just good business sense.
    If you choose to continue to expand and grow you will need key people set up for the future divisions you will establish as time moves forward. This may be harder than finding work and keeping up.
    All part of the game. My only advise is grow slow and set reasonable goals based on your abilities and your
    staff. Remember if your staff does not believe in what your doing and where your going you can live with their
    decisions or find staff that will contribute to your future growth and success. No easy task, no pun intended.
    easy-lift guy
     
  3. YellowDogSVC

    YellowDogSVC LawnSite Gold Member
    from TX
    Posts: 3,756

    I like the last response.. Grow slow but keep pursuing it. IF IT FEELS RIGHT, YOU ARE ON TO SOMETHING! A lot of us "guys" get excited about machinery. I should have focused more on what I needed versus what I wanted. That's not to say I shouldn't have diversified, but I should have slowed down on the machine turnover/purchases.. I've now lived and learned a lot and I'm more frugal now though I still like to buy stuff. :) I'd say, if you have the work lined up and you can afford it, go for it. Owning beats the hell out of renting and you will become an expert in your machine long before you will renting a similar type.

    Keep your certifications up as best you can but in the end, if the type of work you are pursuing doesn't need certs, and there is only so much time in a day, you will have to make some tough choices if you are going to be in the seat as well as wear the salesman hat. I imagine your competition doesn't have any certs and yet you see the same guys day in and day out bidding on the same work. At least that's the way it is here.
     
  4. dycproperties

    dycproperties LawnSite Member
    Posts: 20

    I think deversifaction is very important in that the more services you offer / equipment you have the better the odds that you will be busey and busey doing profitable work. I have quite a pile of different equipment and we offer almost any service that falls under landscape construction/ maintenance and site work in house. The key is not to have to large of a percent of the equipment financed so that you can afford for things to sit when things are not as busey. I like to be in a position to park equipment If I can't get my rate. It doesn't take to many rentals to justify ownership in the long run. Once the equipment is paid for it doesn't cost much to have on hand and can be priceless when the right jobs come along.
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  5. AEL

    AEL LawnSite Bronze Member
    Posts: 1,725

    If you feel like you are going to have the work for it , go for it. Some times once you have a piece of equipment it opens up a lot of new markets as well. Risk is a good thing sometimes too, i can guarantee that a lot of guys on here wouldn't be where they are if they hadn't taken a (few)gambles or risks along the way. If you have to finance it , try to pay it off asap! Best of luck!
     
  6. AWJ Services

    AWJ Services LawnSite Platinum Member
    from Ga
    Posts: 4,276

    Work is only good if it is profitable.

    Pursue what has the highest profit margin.
     
  7. AWJ Services

    AWJ Services LawnSite Platinum Member
    from Ga
    Posts: 4,276

    Well said. Risk is part of the buisness just be realistic about it.
     
  8. Hollowellreid

    Hollowellreid LawnSite Senior Member
    Posts: 290

    We are on the landscape side of things, and it sounds like you will be too.

    I run a bit of an odd model- I like having all of the needed equipment and tools to do the majority of what comes our way, but the problem with that diversity is that stuff spends A LOT of time sitting. Most of our loaders & excavators only do 1-200 hours per year. I couldn't justify buying new and making payments.

    With the used equipment that is paid for in cash as time allows, if it sits it doesn't hurt. I too get the bug to get new iron and toys, but the cash flow usually holds it back.

    The fact that you have made it this far in business says something, in my opinion being profitable in this line of work can be really, really difficult. I am incredibly lucky in lots of ways but it's still a challenge every day to keep it going.


    That being said I would imagine you need to make some sort of decision. All the energy you have spent over the last 2+ years pondering what machine to buy could have been directed into some forward motion. I would imagine that you will soon find that the pickup truck is a major limitation to the operation as well. We have 1...a ford ranger.

    best luck.
     
  9. ksss

    ksss LawnSite Fanatic
    Posts: 7,128

    Like AWJ says the work has to be profitable, and make sure that the jobs are completed and money in the bank before throwing a "Breakout" party. However, my business has taken several major turns over the last 20 years. I just go with it, and its worked out. As to the purchasing of equipment, if you are completing these projects, putting a CTL on an RTO can make a lot of sense. Get the 238 if you like it, put it on an RTO and if it makes sense roll it over in to a purchase at the end of the year. If things don't work out, turn the machine back, pay the rent (which you would have anyway) and walk away and be glad that you didn't pickup the payment book when things looked much better than they really were.

    As to paying off verse making payments. I personally will usually make the payments than to pay off quick. Cash is King, and tying up cash in equipment that can be hard to turn liquid when you need it, can suck. Just a thought on another option for picking up equipment.
     
  10. KrayzKajun

    KrayzKajun LawnSite Fanatic
    Posts: 10,742

    Thanks for the insight fellas

    I sat down and added up rental fees spent on a CTL for 2014 so far. I was shocked. I'm close to $6k in rental fees since December. My first purchase is going to be a CTL to compliment my tractor and to have on hand for my sandbag company. We have three large bushhog jobs on contract where a CTL w/ mower woul d almost cut our job time by atleast a 1/3. Due to being able to maneuver around obstacles and the ponds better.
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