Business plans for Mulching

/ Business plans for Mulching #21  
A good business plan is a must, and a vital part of that plan is which machine to buy. Run them all, no 80 hp unit I ran came close to the 100 hp but that is just my opinion.
 
/ Business plans for Mulching #22  
You are absolutely right. As they say "No replacement for displacement"
A member sited that Bobcat made several improvements to there tractor and solved all there issues. They are still 20 H.P. and ??? torque out of the game.

That's why they make so many different size mulching tractors because there is always a need for more H.P. I've learned from my demos the tree size limitation is in direct relation to H.P.

Just my .02 cents. Robbie
 
/ Business plans for Mulching #23  
I agree with you robbie, bobcat hopefully has corrected their issues, but I am not going to take their word for it. I will wait for the real world results from the next joe mitchell. Thats what makes my decision. He is not the only one as others have had the same issues as him. 20 hp does make a difference.
 
/ Business plans for Mulching
  • Thread Starter
#24  
Ok I talked with the local dealer here in NC, and I am feeling pretty good about this type of business.
The dealer in my area mainly deals with ASV and Loftness and after talking with him for over 40 min he seem impressed with the knowledge I have learned the last few weeks. I am now leaning towards the Timber-ax head vice a carbine tip head, in part due to the fact we more pine trees than hard woods and few rocks in our area. Robbie I do have a question about the Timber-ax statement from Loft-ness (Efficiently cuts and mulches up to 6 inch diameter material with as little as 38 hydraulic horsepower. Intermittently cuts up to 12 inch or larger diameter material.) I am just confused on the Intermittently part is this a true working capacity or just a one time thing. Has anyone 100 % finaced all the equipment from the dealer and what was the experince like? I am now working on the wife, she is almost scared that this could fail? And lastly the going rate around here is $125-150 and more work than people are doing it which could be helpful!
 
/ Business plans for Mulching
  • Thread Starter
#25  
And as far as pricing here's what I am looking at for initial startup based on a 40 hr month startup at $150.00

$100 for loan repayments $4000.00 a month
$35 for operating cost $1400
$15 for my salary $600
For a total of $6000.00 a month

Fuel cost as operating cost about $1250-1300 a month is this realistic figures
I am basing 40 a month initially but should and could be more just have to maintain my full time first. But I only work 40 hours there no more than that ever.
 
/ Business plans for Mulching #26  
Okay, here we go.

Timberax is good, its makes the best use of hyd. H.P. of any head. As long as there aren't many rocks your good. You'll have the sharpening issue that me and Uva cover in the Mulching Project thread. I can give you ideas on that later.

Okay the cutting issue. It can handle 6" material with 38 hyd H.P. ASV's put out something like 77 HYD H.P.. That's where the extra capacity comes from.

The intermediate statement comes from how much material you engage. Look at the pictures on Mulching Project. When I started the path I encountered a wall of pines. I was mulching multiple 6-8" pines at once. That would be the continues duty part. If there was a larger pine (10") I would isolate the larger tree and mulch it by inself. Multiple 6-8" trees and the 10" together would bog the head down to much.

Know onto size. Realisticly the max is usually 6-8" hardwood and a 10" pine. Anything bigger and the base of the tree is just to dense, about the last 3-4' of the base. Know the reserve comes into play like on the pictured job he wanted a path exact. so if I encountered a larger tree it needed to go. But at that size your at the limit of the head, you can push the head some to complete the job just wouldn't want to do hours on end of it.. A carbide toothed head can SLOWLY deal with a 8-10" hardwood and a 12" pine. Maybe a slight bit bigger in a pinch. It's in the forward rotation and smaller teeth bite size that allows this. It grinds down where a timberax cuts at 90 degrees to the tree.

But a summary. Our market is brush up to 6-8" material. If you regularly encounter larger material and jobs, there are larger tractors that suite the job better. I can elaborate later. I hope all of that made since.

As a saftey margin you might consider figuring at 125.00 per hour. If I were in your area and hiring someone to do this work, if two people are the same price I will go with the one who has been in business longer and heard of more. They would be more productive than an novice. That's just my .02 cents.

Your best financing is going to be at the dealership. Banks are hard to sell on equipment. Been there done that. Get everything you want/need upfront to give yourself the best chance. I had to purchase a grapple recently and that cut into profits abit.

you know your operating cost and payments. I am still working my full time job at night and running the mulching business during the day. In the startup faze you'll do good to make the payment each month. There is a ton of stuff you'll need down the road. As in my case and sounds like yours, somthing needs to be payed off to make a comfortable profit. Just the beast. My wife and I agreed to do both for 1 year and see where we were at that time.

A 40 hr month is a good number. Here's a few numbers to keep in mind. Blades for the head 1000.00 a set. They wear pretty even. If you have a problem with the high flow hoses (it happens) 350.00 a set. My dealer included a set of blades with the purchase which helped alot.

Sounds like your getting a plan going. Just remember this, if you plan for the absolute worse and can get by in that case, you have a good plan.
Several of us have learned these lessons the hard way and were making it. Didn't find this site until months after I started. Oh well.

Let me know what you think of all this and talk later. Robbie
 
/ Business plans for Mulching
  • Thread Starter
#27  
Makes some sense to me, the dealer did say something about an extra set of blades as well. In general where the areas that are really thick we are talking small pines and huge amounts of under growth, I know that is not everywhere but as long as you have that, I am sure you can get it done in a timely manner. I hear about about price and after going over the numbers after I posted last night I could agree with you. I was figuring close to $3000 a month repay but after taking a closer look I should figure closer to $2000-2500. And I believe operting cost should be more like $40-45 per hour to also cover the extras like oil, hyd fluid , filters, and blades. Which brings up other point what are some of maintenance schecludes like? How often is oil changed at 8 gals that can add rather quickly.
 
/ Business plans for Mulching #28  
Service at 50 hours is oil and hydro fluid change..cost me about $200 along with having the level gauge replaced (covered in the asv face down thread lol :p ) Next service due at 150 hours..nothing too major...just oild and filter change and checking the hydro...they change it at 50hrs because of break in...you need to figure in the cost of air filters..they need to be checked/cleaned with compressed air daily...they are good for a few cleanings...i cant recall how much they are off the top of my head robbie may know....there is not much that needs to be checked on the timber ax accept the blades and the bolt torque...you will also need to take the cover off the hydro pump on the timber ax and clean the debris out of it....I would recomend financing through ASV...we got the timber ax on our John Deere Farm Credit plan...the interest rate will be different for the ASV and the Timber Ax even if they both go through ASV financing through your dealer because of the TImber Ax being a non-asv product....I would STRONGLY recomend the Forestry kit..or and the MINIMUM the rear end guards...I have a buddy that backed his into a tree while grading a drive way and crushed the whole engine cover and radiator to the tune of $5000.00 he had no rear guarding...just my .02

Ryan
 
/ Business plans for Mulching
  • Thread Starter
#29  
Ok now I am curious I have not seen the thead about the ASV face down, I've seen it mention a few times does anyone have the link. :rolleyes:
 
/ Business plans for Mulching #31  
HeyUvaVT said:
Service at 50 hours is oil and hydro fluid change..cost me about $200 along with having the level gauge replaced (covered in the asv face down thread lol :p ) Next service due at 150 hours..nothing too major...just oild and filter change and checking the hydro...they change it at 50hrs because of break in...you need to figure in the cost of air filters..they need to be checked/cleaned with compressed air daily...they are good for a few cleanings...i cant recall how much they are off the top of my head robbie may know....there is not much that needs to be checked on the timber ax accept the blades and the bolt torque...you will also need to take the cover off the hydro pump on the timber ax and clean the debris out of it....I would recomend financing through ASV...we got the timber ax on our John Deere Farm Credit plan...the interest rate will be different for the ASV and the Timber Ax even if they both go through ASV financing through your dealer because of the TImber Ax being a non-asv product....I would STRONGLY recomend the Forestry kit..or and the MINIMUM the rear end guards...I have a buddy that backed his into a tree while grading a drive way and crushed the whole engine cover and radiator to the tune of $5000.00 he had no rear guarding...just my .02

Ryan

$200?? Is that from your ASV dealer? Mine wants $51/5 gal Hyd. oil and 20 gallons is $204. Then 2 hydraulic filters, oil filter, oil, and labor. I figure it would be much higher.
 
/ Business plans for Mulching #32  
Let me bring up something here about the trailer sizes... It NC the max trailer can not be greater than 10,000gvw as listed on the manufacturers tag unless you have a CDL. Makes no difference if the trailer is empty or loaded.
 
/ Business plans for Mulching #33  
Hey guys
Randy Here. Robbie? Enjoyed the demo this weekend. I just read the thread and wanted to weigh in on new guys getting started. I have found that there is alot more to getting started than getting started. Sounds like the right moves have been made in searching for equipment and researching costs and expected revenues.
I have An ASV-100 with a FAE head The carbide teeth are probably the right move in medium to severe conditions hardwoods and rocks. Blades wood probably be better if dealing with mostly pines with no rocks. but neither work good against scrap iron ouch!! Lost about 12 teeth on one hidden track sprocket section hidden at the base of a tree. cost about $ 65.00 ea. You have got to figure the teeth in your costs. I am trying to come up with a cost per job or by the hr. as an adder just for teeth maitainace. I have been able to sharpen my carbide teeth but will probably only take a couple of grindings and still will not be as good as new teeth.
I am in Alabama north central part of the state, We are only able to get $100.00-$150.00 an hr on most work. small jobs we get around $140-$150.00
Larger jobs 3 acres or more more like $100.00-$125.00 per hr. This has been with the machine ,operator and 1 helper. some guys around here are supplying 4 men and machine chainsaw and limb saw to raise canopy. for same price an less.
I started in July of this year and have been able to stay busy enough to keep payments and add a few things as I go. I still work a full time job for a while longer I think. I Bought a F-350 extended cab with tool bed and will soon try to purchase 20,000 Lb tandom gooseneck . and possably a stump grinder.
I think the main determining factors of success or failure is #1. Location. If you are in a growing area with recreational property near by such as water front property,, river or lake lots or multiple subdivisions. then you will have a leg up.#2. Number of people running machines in the area is something to concider. #3 And probably the most important. Contacts. Knowledge of the area and the People that are the movers and shakers in the real estate market in the area . I have probably, on average ,gotton at least one job to do for every job done. sometimes two or three .Word of mouth is your best advertisement. But make sure you always leave a positive impression on every customer. Because word of mouth works the other way as well. Another helpfull hint is to have a positve attitude because there will be slow times and breakdowns ahead.
I think if you have done your home work and have good credit.( another must. Because you will need it to help you make it thru tuff times that will come in the beginning.)
If You have the customer base to draw from
Even if you have compitition. be sure to supply a superior finished product than you competitor.I am trying my best to keep the price I charge as high as I can but try to offer more for the buck.
If you have connections ,a good reputation before you start and a marginal amount of ability to run equipment and maintain it.You will make it . I hope I haven't rambled too much. I do know That if I had known about this thread before I started I would have began befor I did. Good Mulching everyone, Randy
 
/ Business plans for Mulching #34  
ASV100/FAE/Head,

I think the market is getting saturated and people are lowering prices to get jobs. Once people realize that in onw hour you can outwork a truckload of men, they may not be as shocked by the hourly price. Telling anybody $140 or whatever an hour sends many customers away.
Market competition is fine, but we all need to stick together and get what these machines are worth/hr. Sooner or later, people will be down to $75/hr at the rate it's going.
Encourage people not to worry about the hourly rat UNTIL they see what can be accomplished in an hour. What else can they do that would be cheaper with the same or similiar results?
I am not super busy, but at $120-130/hr, I'm not making money either. I am about to go up. Provide good service, get your name out and you will still find business.

Let's compare rates. A local equipment shop gets $85/hr for labor. I didn't realize turning a wrench involved so much.

Lawnmower shop is $65/hr. A $7 dollar blade will end up costing $70!

Window tinting approx. 1 1/2 hr to do a car for $150 is $100/hr and material is dirt cheap.

Lawn cutting service for one man is $60/hr. Compare his equipment cost and upkeep to our investment.

These machines are put in the harshest conditions, running as hard as they can all day. How long will they last? New tracks are $$$$ plus more for labor. As you mentioned, teeth aare expensive and likely won't see 400 hrs, plus all the ones you chip way b4 then. Fuel is approx. $100/day for the machine alone. Filters are expensive and need changing often. Hydraulic hoses burst and they aren't free where I get them. Accidents from being "face down" or just stuck account for towing/recovery fees.

And pulling this kind of weight around regularly will require a one-ton truck and heavy (expensive) trailer. Heavy trucks and trailers aren't gas sippers either. Not only that, but you need a CDL and have DOT regulations to comply with. Fines are expensive and DOT is unforgiving.

So if you are part time and land a 3 day job which may take all month depending on your full time job, weather, etc. If you work 30hrs fo $3000. Guesstimates here off the top of my head, but:
track cost = $15/hr. x30= 450
Fuel cost = $12/hr. x30=360
Teeth cost =$8/hr. 240
Maintenance = $6/hr. 180
Payments/insurance = $55/hr 1650
Helper = $12/hr 360
Total $3040

Then figure for

Unexpected expenses (hoses, teeth, stuck, etc) =$$
Truck expense
monthly payments
insurance
fuel for 3 round trips to jobsite
maintenance
Trailer expense?
Insurance
payment possibly
maintenance

If there is anything left, well you give half of it to Uncle Sam and you can finally take your cut.
 
/ Business plans for Mulching
  • Thread Starter
#35  
Yup,

I just read about the the CDL requirements and it just starting to furstate me about all the little things that keep popping up. There is no way around the CDL thing that I can see because of the weight. I was forecasting everything that has been bought up thus far until I read about the CDL (crap) What I don't understate is just towing a trailer is all I need to do why I have to go thru the entire CDL process I am not going to be driving a semi or anything of that type just another thing to slow it down and add to my list. Guess I need to study up for a CDL Class A.
 
/ Business plans for Mulching #36  
dive2diver said:
Yup,

I just read about the the CDL requirements and it just starting to furstate me about all the little things that keep popping up. There is no way around the CDL thing that I can see because of the weight. I was forecasting everything that has been bought up thus far until I read about the CDL (crap) What I don't understate is just towing a trailer is all I need to do why I have to go thru the entire CDL process I am not going to be driving a semi or anything of that type just another thing to slow it down and add to my list. Guess I need to study up for a CDL Class A.



Some really good points being made here...

I also was unaware of the CDL requirements in my state until I got a friendly warning from a friend of mine with the state police...class A test without air brake cert. isnt too terrible..get a manual and read through it a few times...air brakes really throws a monkey wrench in there because of all the pre-trip checks you have to do....

good points also made about the hourly rate and how to make people realize the deal that they are really getting...what we do is tell people that we will come out and do $500 worth of work...after that is done you decide whether you want us to keep going or not...we are in a very wealthy area with ALOT of waterfront property and we are one of only 2 companies doing what we do in a large radius so we are really lucking out..anyways just my two cents


Rutwad...the $200 was labor only now that I checked with the CFO :p guess thats why I sit in the cab and dont sign the checks!!
 
/ Business plans for Mulching #37  
Quick observation on the CDL issue. If it were not for this web site several of us would not know the difference. If your equipment is capable and in good working order and looks decent( not an F-150 with a landscape trailer and a bobcat) you are pretty safe. People who own travel trailers pull them every day and some of them are almost 20k lbs with no CDL's. I would personally get started and buy the correct size equipment and then when business is slow go take the test.

The air bake section of the test is a breeze.
 
/ Business plans for Mulching #38  
Robbie Hegwood said:
Quick observation on the CDL issue. If it were not for this web site several of us would not know the difference. If your equipment is capable and in good working order and looks decent( not an F-150 with a landscape trailer and a bobcat) you are pretty safe. People who own travel trailers pull them every day and some of them are almost 20k lbs with no CDL's. I would personally get started and buy the correct size equipment and then when business is slow go take the test.

The air bake section of the test is a breeze.

Trying to skirt around this issue and ignore it can get you in deep crap no matter how decent and safe looking you are. One little incident involving another vehicle will get the attention of the police and your insurance company.

I know this from a personal experience last year when a guy asked me to move a trailer for him. I towed it 2 miles to his place of work and had to jack knife it to get turned around and backed in. During the jack knife the rear of the trailer clipped a brand new DHL van that was improperly parked. The cop asked me repeatedly if I was moving this trailer commercially and my truck insurance tried to deny coverage. They did finally cover the DHL van but I had to eat the trailer damage to the tune of $1,000. When someone asks me to move anything now I refuse. It was such a simple little incident but it taught me a lesson.

Bottom line is that your insurance is not going to cover anything if you have violated any laws. And driving a vehicle without the proper drivers license is a blatant violation of the law, sorry to be blunt but that's the way it is, trust me!!! Been there, got the T-shirt. Luckily it only cost me a grand.
 
/ Business plans for Mulching #39  
My main point being all the different takes on the CDL issue. I was driving for Coca Cola when I aquired my license and it was very clear about the when you needed one. 25,999 lbs. or above and air brakes on the truck. They even had special trucks for non-CDL drivers to use until we were able to take the test. NEVER during the studying and practice drives with a state certified instructor did trailers over a certain weight come up. I only aquired a class B but the other guy with me was getting a class A and I was there the whole time and the weight issue didn't come up either.

If you dig hard enough there is a law somewhere that will contridict(spell) everything about trailers. If the "law" would like use to conform to a set weights they need to decide who will do it, nation wide, and a way for everyday people to find about them. Either the trailer dealership, etc. Why do they make trucks with class ratings of 19,000lbs to 25,999lbs. if you had to have a CDL for a 1 ton.

I only haul MY equipment, have passed DOT back road quick setups, told my tag office my weights and NEVER had an issue. My equipment is top notch and capable of hauling my equipment well. I haul gross trailer weight of 18k daily.

Now i would like to have a bigger truck for a larger saftey margine as a side note. About your equipments looks, You can look at a trailer and tell if it's overloaded was my point. A trailer going down the road with the tires bowed in is a problem. I was following a truck pulling a bobcat yesterday and couldn't figure out why he was going so slow until he tried to stop and didn't have ANY trailer brakes!!! There the problems not the majority of use who are trying to do it right.

I am sorry for your difficulty with the accident. But do you think the insurance company would have said anything if you were insured to haul for other poeple from the beginning???

This reminds me of the erosion class the EPD is requiring these days. If you follow every rule and regulation they have it would take you 40 hours a week to do so. Darn near impossible, I spent 200.00 only to realize mulchers are exempt and or don't disturb the dirt enough to count.
 
/ Business plans for Mulching #40  
Robbie,
The laws are very specific in NC as to the max legal weight for a trailer is 10,000# before needing a CDL. However in SC it's 26,001# for a GCVW when a trailer is involved. The 26,001# max is the Federal Law, individual states can require weights lower than that and a lot of states do. Nowhere will you find contradictions to this if you read and understand the drivers manual for your state.

The 2007 Ga Drivers Manual states For a Class C License:
Any single vehicle with a G.V.W.R. not in excess of 26,000 pounds. This includes all recreational vehicles.
Class C vehicles may tow vehicles as long as the combination of vehicles has a combined G.V.W.R. not in excess of 26,000 pounds.
Notice that it says Rating.

From the NC handbook:




Class C –
Required to operate any vehicle with a GVWR of less than 26,001 pounds that is exempt from CDL requirements and is not towing a vehicle with a GVWR of more than 10,000 pounds.



Again the Rating is stipulated!

BTW, Both states have non-commercial licenses for vehicles in excess of 26,001# as does SC.

As far as my little incident goes, I only threw that out there to point out how easy it was to screw up, my personal F-350 dually isn't licensed or insured for commercial use, I was just doing a quick move for a cool $50 and got burned.

Plus, hauling "only your equipment" to a job site is still a commercial operation since it involves some type of revenue. To that end you should have a CDL which I take that you do.

So let's go back to my original post in this thread, To tow a trailer in NC that has a GVWR of 10,000# or more will require a license greater than a Class C, PERIOD! Since Dive2diver was formulating a business plan in NC that involved a 14,000# trailer I felt that he should be aware of the licensing requirements.
After reading a later post it was clear that he wasn't.

Have a good one.
 

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