How to Start an Excavating Company ($360K a Year)
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- Опубліковано 22 сер 2023
- #excavator #excavators #construction #contractor
How to start an excavating company - Land Clearing, Basement Digging, Excavating for Foundations, and Excavating utility work.
1. You need to understand your excavating costs:
You will need to buy the following equipment:
- Excavator
- Skid Steer
- Truck and Trailer
- Random Tools
Overall Total Costs: $200,000.
For a loan, you will need 20% down = $40,000
For 5 year loan, your monthly payment will be $3,400 a month.
The insurance monthly payment is $300 a month.
2. How much can you make in the excavating business:
- Basements - $10K - $30K = Average $20K
- Land Grading - $1K - $3K - Average $2K
- Foundation Preparation - $3K - $4K = Average $3K.
For an average month, this is what you can make:
- 1 Basement = $20,000
- 2 Land Grading Jobs = $4,000
- 3 Foundations = $6,000
TOTAL REVENUE: $30,000
Now let's go through the expenses:
- $3,400 loan
- $300 for insurance
- $3,000 for gas
- $4,000 for labor
TOTAL EXPENSES: $11,000
NET INCOME: $19,000
GROSS REVENUE: $360,000
GROSS PROFIT: $228,000 - $40,000 (down payment) = $188,000
3. Think of all the ways it won't work
- You don't get jobs. You need to do marketing. You need to network with general contractors and home builders.
- Your equipment breaks down all the time. You need to acquire a base knowledge to fix your equipment.
- You can't fulfill your jobs because of time management or lack of employees. You should hire an assistant or a hiring strategy for workers.
- Your quality is horrible. You need to know what you are doing or it will put you out of business.
4. You need to legal up.
- Create an LLC for asset protection.
- Buy Insurance. If you need pricing options and quotes, look up wexfordins.com
5. Commit and start your excavating company today.
Great video! Really good things to take into consideration when first starting out.
Glad it was helpful! 🫡
The tricky thing with excavating is knowing what you’re going to do with fill either hauling it in, or hauling it away. Trucking is expensive. If you’re doing homes, you’re not likely going to have a site civil grading plan, that will give you elevations, so you can get a better estimate on this. Digging the hole with the machine is the easiest part. If you miss on the fill, you’ll burn through your profit in a hurry.
Thanks for the insight, appreciate it!
can you elaborate more on what you mean bu " missing your fill "
Great video. Thanks for sharing
Anytime!
When I started out last year iBerk (Berkshire Hathaway) had the most coverage for least amount of money. I think I'm paying like $180 per month for a $1 mill excavation policy.
Yeah Biberk is a good starter policy. If you start getting into larger jobs and commercial you will want an agent and more extensive policy. Would be happy to help.
Same pretty much applies to a trucking company. Just swap out the word excavation for transport and there are a lot of similarities.
Exactly, heavy expense business, need volume to be profitable
Starting out renting is better that overhead I'd way to much for a green horn. All areas don't pay the same these factors should be considered.
Yeah the upfront costs can overwhelm a lot of people.
Great video thank you for sharing! My hubby and I just purchased a 1 ton mini excavator, truck and 7x16 trailer with walls in cash to start out small and conservative. He plans to partner with local GC's along with realtors to do driveways. Any advice would be helpful as far as finding or connecting with local contracts? I apprecaite your knowledge thank you!
Definitely! Congrats on starting. I would recommend you call local general contractors, custom home builders, larger excavating companies, plumbing companies, swimming pool companies, etc. Essentially any business that would need assistance with moving a lot of dirt. After that, create a website with SEO on it and facebook page. Happy to hope on a call as well.
you said web site with SEO what is SEO?@@nate_indiana_jones
Please show me where your buying a truck, trail, skid steer w/ 3 attachments and a mini w/ 2 attachments for 200k. A truck and trailer that allows you to haul both will set you back 110k easy. Mini go for between 50-80k and skid steer 60-90k.
Yeah every location is different. Also the brand of equipment is important.
hey man in your excavation company you can also add demolition
Yeah but most insurance companies don’t want to see more than 10%
Would I need my General A contractors license to do residential or Commercial excavation in California?
I am not entirely sure. It would be a good idea to reach out to someone local.
To answer your question yes you do I just got mine process isn’t hard at all
Suggesting that you can have your $40k down payment in the first 3 months of starting your business is negligent on your part… Is it possible? SURE! It’s NOT probable however…
Yes, this is running best case scenario
I wasted my time listening to this video, this man does not know what he is talking about.
With near 50 years in excavation firms management and running excavation dirt projects I can say this man, is no better then someone at a coffee shop running his month. $360,000 a year in gross revenue only a few excavation companies do that after many years in business, it takes a lot of machinery and men and shop equipment to generate that much revenue.
Thanks for the insight, obviously every company, location, and owner is different. From my experience, this is doable.
it's absolutely possible. I did 497k my first year and 578K my second year with only one helper/driver. my margins are easily 55-60%
Hi! That’s so awesome man!
Where about are you located?
Also what services do you focus on?
@@olegkaletin9002 Midwest Wisconsin. I do a lot of sewer/septics for plumbers, shed pads, fixing drainage problems, demolition, some land clearing Etc... Basically the putsy work that the bigger guys don't want to mess with.
I go hard though; I'm usually swinging on the job site by 7 a.m. after moving equipment and don't typically get home till 7-8 p.m.
@@cink1461 do you have an Instagram or number I can follow and see updates on your work etc! Thanks for the tips. But I’m scared to jump in. :(
Where the FNCK can I get insurance that cheap?!?!
Wexford Insurance! Or excavating insurance partners!
You'll never get that many jobs per month and consistently. The debt will dumpster that business in the first year. All jobs take twice as long as you think they will.
Got it, hard to project some things. Definitely money in this business though.
Definitely possible to stay consistent with these type of jobs especially if you live in a city or have the willingness to drive.
@@user-jf5gm4kg5e exactly! Not enough Excavsting contractors out there
What's the name of the license?
Depends on your state.
And what is the name of the best company to pay a lot
What do you mean?
@@nate_indiana_jones I mean I want the name of a good company in dealing and paying
What do you mean dealing and paying? For buying equipment?
Bro I have a excavator company my monthly income is 3644 dollar. and how can i make this company bigger.
Are you connecting with GC’s, home builders, and other contractors? Do you have a website with SEO? Are you offering commercial and residential work?
Lots of good business advice, You definitely make a lot of sense financially, but I'm sensing that you're a little out of your area of expertise discussing construction or excavation and that lack of knowledge kinda blew your video apart.
Whats the difference between a "Basement Job" and a "Foundation Job"???
I'm a 50 year old journeyman carpenter, I've built all kinds of houses for a living, this makes zero sense to me.
When a house is built it requires a foundation. Usually foundations, whether they are concrete block, treated wood, or concrete, are built by carpenters. Carpenters build the formwork, place the concrete that will become the foundation, and after 7 - 10 days they strip the formwork off leaving a foundation to build upon.
Excavation companies don't build formwork or place concrete, they just dig the holes for them.
So from an excavating sense, the terms "basement job" and "foundation job" mean the same thing, digging the hole where a house will be built.
They are not separate types of jobs. So this budget you're explaining is pretty flawed and you should probably rethink this and remake this video before you give someone terrible advice by accident.
Love that you made this video, it just isn't correct and should be remade but definitely this needs to be taken down.
Thanks for commenting! I appreciate the advice.
So did I misunderstand your use of those terms?@@nate_indiana_jones
Not sure, I was just thanking you for commenting
You should probably read my comment, you have made a large mistake in your hypothesis of profitability.
@@reganmorben9248 thanks for letting know, I’ll have to redo the video soon.
This guy isnt the brightest guy on the planet. Im an owner operator with my own excavating company. When i started out i didnt purchase any of my own equipment, i didnt go get a $200k loan. Lmao rental equipment does exist and its not that expensive. Its about 3 grand a month for a skidsteer and about 4500 a month for an excavator. Now i dont reccomend you start out with two peices of equipment either start with a hoe or start with a skiddy and grow your company to where you can actually afford to purchase your own equipment.
Also a skidsteer will cost you around $100,000 and a hoe averages around $250,000 so if you go buy this idiot youd need a load of a half a million dollars to start and if you take out a loan of that much before you have a company thats making you money you will go bankrupt.
Domt listen to this guy
I agree you can start with a low cost model. I agree with you. My scenario was with buying equipment and growing your assets. A business with no equipment has no equity and can’t be sold.
I think these videos are a little bit deceptive. This guy has videos on how to start a flooring business, excavating business, drywall business, trucking business etc. He didn't start these types of businesses so there is not much value in these videos. People want to hear first-hand experiences. Second hand knowledge on businesses where competency is key is basically useless imo. You'll notice in the comments of many of these videos there are people in these actual fields pointing out that a lot of the info is incorrect or misleading. Maybe try interviewing people in these industries instead.
So you are going to spam my channel with the same comment on all videos?
@@nate_indiana_jones This one has a different ending. I guess I would have only posted it once but you made so many videos of businesses you don't understand. Have you ever had any blue collar job? You seem to underestimate what kind of hard work goes into these types of jobs/businesses.
Every business is hard. Every business has challenges. I am only explaining the amount of money you can make. I never discredited the hard work.
@@nate_indiana_jones There is value in you telling people about different ideas and opportunities that are out there. I'm an analytical thinker so if someone is telling me about a business idea I like to hear the challenges and realities of that business from someone that has done it. Case in point, I worked for a paving company that also did excavating in my younger years. In the small city I was in, the most successful at it were the guys that had a lot of connections, their families had been in that town for generations. It is a capital intensive business and if you didn't have the relationships that kept you busy it would probably be hard to stay afloat. These are things that are important imo. Some people aren't into that stuff though I get it.
Completely agree, every business requires you to go out and build relationships. If you sit at home and wait for the phone to ring. It won’t.