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Discussion Starter · #1 ·
So, I have been looking at this for quite some time and I am ready to start taking the steps on making this a reality for me. My local JD offers a combo package with a 2025R and it comes with FEL with Bucket, 48L Box Blade and 48" Bush Hog for 26K. I have a general idea for my pricing and the type of work I am going to be starting out with but in rural Alabama, I do not really know what I would do in the winter months from November to March. I want to make this worth my while and obviously as time progresses I will have more implements. I am looking at charging $75/hr at minimum and mostly working on weekends until I have enough business to make it my FT job. What are some tips from those that have been in the industry for awhile and those which are already weekend warriors?
 

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What Stan says is most important. Also check with your auto insurance to make sure you’re covered while doing business, both tow vehicle and trailer.
You’ll also need to calculate your running costs per hour- Fuel, maintenance, depreciation of equipment, repairs needed.
You’ll also want a good tax accountant to help you maximize your deductions and minimize your taxable income.
I don’t think your $75/hour is going to cut it.
 

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You'll need to account for cost of replacement for truck, tractor, and equipment, as well as maintenance and repair. You'll also need to cover mileage cost of travel to, from, and between jobs.

I personally don't see how there's enough business available for a full time job doing small tractor work. What are you offering that another business can't already do more efficiently? I think a small tractor can be an asset to some businesses but it's hard to see how a business can be built around a small tractor. You also have to figure in competition, there are always guys around here who have tractors for personal use looking to til gardens or whatever for $50 an hour. It's hard to compete with that lol.
 

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Discussion Starter · #5 ·
What Stan says is most important. Also check with your auto insurance to make sure you’re covered while doing business, both tow vehicle and trailer.
You’ll also need to calculate your running costs per hour- Fuel, maintenance, depreciation of equipment, repairs needed.
You’ll also want a good tax accountant to help you maximize your deductions and minimize your taxable income.
I don’t think your $75/hour is going to cut it.
I have seen similar threads on running and overhead costs and I felt like $75/hr was selling myself short, however, I'm trying to compete with other local dudes who do not have these and I do not want to lose business right out of the gate because of Joe Blow from down the block with his 1990s Massey just doing "favors."
 

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Discussion Starter · #6 ·
You'll need to account for cost of replacement for truck, tractor, and equipment, as well as maintenance and repair. You'll also need to cover mileage cost of travel to, from, and between jobs.

I personally don't see how there's enough business available for a full time job doing small tractor work. What are you offering that another business can't already do more efficiently? I think a small tractor can be an asset to some businesses but it's hard to see how a business can be built around a small tractor. You also have to figure in competition, there are always guys around here who have tractors for personal use looking to til gardens or whatever for $50 an hour. It's hard to compete with that lol.
I would want to expand on it in the future and have bigger machines to do heavier tasks such as land clearing and excavation. I want to eventually get to general contractor status but I gotta start somewhere. As I said in another reply, my biggest concern is some random dude doing "favors."
 

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I would want to expand on it in the future and have bigger machines to do heavier tasks such as land clearing and excavation. I want to eventually get to general contractor status but I gotta start somewhere. As I said in another reply, my biggest concern is some random dude doing "favors."
Do you know what services you are going to offer?
 

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Give it up. You cannot compete with them. I did do one 6 hour job, more to help out than anything, but I charged them $50 per hour and I have a lot bigger tractor than you are looking at.

Maybe save your money and launch a business with bigger equipment. But survey around to see how much business is available before going off the deep end.

Dave
 

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Do you have the experience to be worth $75 per hour?
If you are new tractor owner, that may not be the case. If you have the experience then that may be a decent starting point.
Here in KY, the average tractor business is about $50 per hour. Just the cost of your machine in fluids, oil, fuel per hour will eat up at least $10 per hour.
 

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I think it's better to figure out what services that you want to sell first and then what equipment you need to do them and see if you can offer those services at a price that customers will pay while making the money that you want.
 

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Discussion Starter · #11 ·
I think it's better to figure out what services that you want to sell first and then what equipment you need to do them and see if you can offer those services at a price that customers will pay while making the money that you want.
Well it depends, I have two different local JD's that are operated under different companies. The second one allows you to build your combo plan. For me, it seemed like the attachments that the first company offered was more practical for me seeing as I already have a D130 Mower and other generic lawn care items. Starting out would be just what it is, leveling driveways, bush hogging fields, using loader bucket for whatever and then upgrade to pallet forks, an underbelly deck, and backhoe but that is down the road. We have the work around us which I'm not concerned about. My neighbor has a 60's Ford and all he tells me that the standard around us is $60/acre.
 

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Discussion Starter · #12 ·
Do you have the experience to be worth $75 per hour?
If you are new tractor owner, that may not be the case. If you have the experience then that may be a decent starting point.
Here in KY, the average tractor business is about $50 per hour. Just the cost of your machine in fluids, oil, fuel per hour will eat up at least $10 per hour.
I won't be new to the industry, just new to being an owner/operator.
 

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Just something to consider when you go shopping: If you walk into a dealership they'll quote you pricing and warranties based on residential use. If you finance it as residential and they find out you are using it for your business they'll void your warranty. You CAN get commercial financing and warranties if you let them know up front what the deal is.
 

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I personally don't see how there's enough business available for a full time job doing small tractor work.
This.

If I were going to start a business like this it would be with a skid steer with attachments or a small/mini excavator.
 

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by setting a reasonable rate, and its likely more like $100/hr, you eliminate most of the bad clients. I can tell you from my not construction related work, the cheapest bargin hunting clients are also the worst biggest problems to deal with. Everyone thinks the same, start cheap ti get in. Not really. Mostly you are just cheating yourself of money.

Also to figure in : transport time. probably anything more than a 10 mi radius you need to think about drive time and cost. local material delivery here is all over the place from a clown that thinks their single axle dump truck is worth $150/hr ( nearly laughed in the guys face ) to reasonable $20-40 to free within several mi range of their yard. You need to figure service area and what the charge is - flat rate or per mi.
 

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Discussion Starter · #16 ·
Just something to consider when you go shopping: If you walk into a dealership they'll quote you pricing and warranties based on residential use. If you finance it as residential and they find out you are using it for your business they'll void your warranty. You CAN get commercial financing and warranties if you let them know up front what the deal is.
Only problem with this is most lenders require you to be in business for at least 12 months before they consider financing, plus some may even require an annual floor amount such as 50k/year.
 

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Discussion Starter · #17 ·
by setting a reasonable rate, and its likely more like $100/hr, you eliminate most of the bad clients. I can tell you from my not construction related work, the cheapest bargin hunting clients are also the worst biggest problems to deal with. Everyone thinks the same, start cheap ti get in. Not really. Mostly you are just cheating yourself of money.

Also to figure in : transport time. probably anything more than a 10 mi radius you need to think about drive time and cost. local material delivery here is all over the place from a clown that thinks their single axle dump truck is worth $150/hr ( nearly laughed in the guys face ) to reasonable $20-40 to free within several mi range of their yard. You need to figure service area and what the charge is - flat rate or per mi.
I was starting to teeter towards the $90-$100 range. I haven't figured travel time yet though. Most of my area is pretty easy to travel around.
 

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If you scroll down to the bottom of this page, you will see "Recommended Reading." These are a selection of the prior discussions about this topic. I doubt that any of the advice has changed significantly since the last person before you posted this same question. You have done a search, right?

At the top of this page you will see a search bar. It says "Search Community."

BTW, the tractor you are planning to buy is too small to handle a lot of the sort of jobs that people tend to hire out. You may be able to get a job done, given enough time using a compact tractor, but the guy with the bigger machine can get done in less time and move on to a new client. He can under-bid you and also have less wear and tear on his tractor.
 

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Even a small start up business has to act like and function like a REAL business. That means knowing your costs and holding the line on what it takes for you to actually be profitable. NEVER and I can't stress this enough, NEVER make your business strategy to compete on price. Take it from someone who has been self employed for over 40 years and has been very successful, if the appeal to your product or services is being a low cost provider, you are going to constantly struggle economically.

Sell Quality, Sell Doing the Job Correctly and Safely. That means not having a vehicle which drips oil on the guys driveway while its parked there to haul your equipment to the work site. It means showing up when you said you would, and doing what you said you would do. Some people would say "Well, that's obvious", I can assure you that in fact, its anything but obvious.

Trust me, you want to deal with the people who will and can pay for quality. You DO NOT want to deal with the price shopper. How do you find people who can and will pay for quality? As the famous Depression Era Bank Robber Willie Sutton used to say, "We rob banks because that's where the money is". People who can and will pay for quality tend to live in better kept and nicer neighborhoods. I assure you there is more of them there than you will find in the rental / Apartment Complex neighborhood.

Can you build a business around a small tractor? Yes, but its very difficult and requires a lot of time and effort marketing and patience. You have to be willing to work Social Media and you have to have something to offer that others competing don't or won't. You have to be extremely aware of the property and surroundings. You have to know how not to damage things or even cause yourself problems. Why would someone choose you over others? It can't be price or you are wasting your time. You have to be creative. You have to find a reason why people would choose you over someone else.

The machine is simply a part of this entire equation and its far from the primary reason to work with you. What can you do that others can't or actually won't? How do you find the customers and how do you build the business? Is $75 per hour going to be enough? I highly doubt it.

Personally, I hate to think of you trying to compete on an hourly rate basis for a number of reasons. People prefer to avoid surprises and they like to know what things are going to cost. That means you are assuming the risk for the project performance to make the price you give the customer make economic sense to your customer. In other words, you are going to be providing prices for the actual PROJECT and in that project price, will determine how much you will make. This is tough and there are a lot of variables, such as unknowns, hidden and unforeseen problems and "project creep".

You need insurance to protect against liability issues. You need insurance in case you get hurt. You need insurance to protect against the loss of your equipment or significant damage to it. You have to protect against damaging the clients equipment, property or self. What can go wrong, some day will. That's the way it works.

Let me ask you how you would handle this situation. This coming weekend, you have already scheduled to perform work for two customers, one on Saturday at 3pm and one on Sunday at 1pm. These are both projects which the customers want completed and they are eager to get them started and willing to work with you because you assured them you can handle the project, the price you quoted was acceptable to them and the customer has spoken to other customers of yours for whom you performed similar projects and overall, indicated that they were pleased with your work.

You have estimated that Each project is going to take you 4 to 5 hours to complete. Both of these customers have things scheduled for their properties for long time scheduled social events, one is a graduation party and the other is a wedding and they need to have the project you are going to perform, completed. You have already scheduled to have material delivered to the job sites on Saturday, which you had to prepay out of your pocket. This way, you will have what you need to get the work done when you get there.

Friday night, your best friend contacts you and tells you they were able to get premium tickets to go see a concert of your favorite musical group in a major city, which is about a 3 to 4 hour drive, each way, from your home. The concert starts at 9pm on Saturday and since its going to be getting over late and with the drive, your friend suggests you spend the night. Knowing that you would want to see the band, your friend already bought your ticket. They are extremely excited about seeing this group after waiting so long. You have always wanted to attend their concert and they rarely tour and even less often, tour in your area.

What do you do?
 
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