Business plans for Mulching

[Robbie Hegwood]

I'm not sure how far apart you would be but there is a TBN member PACO who just purchased a 100 with a fecon head. Look under pics of new rc-100. If you weren't competeing directly I'm sure he would like to have a fan come and see his new toy. He's a good guy and might could answer some questions for you. He has also researched this subject to death also and I believe his efforts have paid off with the most bang for his buck. His tractor IS the complete package. I don't any more attachments or options would fit.
Shoot him a message or maybe he'll chime in and comment.

So you didn't like my renting idea? Robbie

 

[dive2diver]

From who in my area?

 

[kmdigital]

He did ask if I wanted to buy his unit, and he ask mentioned track issues, like I said I believe he does push his equipment very hard. I am going to plan out going out to his job site which is about 20 miles from here so I will see how his equipment and his maintance practices work out for him. I have so much to think about and understand before I make this leap.

I would really question why he wants to sell. Is it because it isn't as profitable as he expected, maintenance costs are eating him up, etc, etc? Again, I still say buy a used machine if you can find one from someone else that can't afford it anymore, changed his business plans, etc. Machines like this depreciate very rapidly, and a 1 year old machine may sell for 1/2 of a new machine, and especially if you can do your own work this is a much better buy.

People that argue for always buying new "because you aren't getting someone else's problems", or "customers don't want to hear that your machine is down" or ect, etc, do so primarily to justify their own proclivities for always buying new. That's like my former SIL who justified buying a new Ford Taurus "because than you don't have to worry about repairs because it's under warranty", never taking into account that Ford Taurus's depreciate faster than almost any other car. (heck, it wasn't uncommon to see these cars that cost ~ $23k new being worth about $5k two years and 30k miles later.) And it certainly was a factor in her bankruptcy and divorce!

If you can buy a good used machine with attachments, a trailer and truck for around $30k-$50k you will be vastly ahead of having twice that wrapped up in new equipment for use on a part-time basis. Personally, I think that is still too high of an investment, unless you are certain that you will get enough work to gross at least 4 times your expected monthly expenses. Any less than that, and you will end up working for nothing or worse when things go wrong, and go wrong they will.

In all honesty, I still say that you don't want to do this on a part-time basis unless you have enough cashflow from your primary job to be able to make all payments for at least 4-5 months or even longer if needed. This is called margin, and will save your rear if things don't go as expected, and helps you to sleep at night!

Always, always, always, have an exit strategy and at least one backup plan that you can live with if things go wrong. Remember, most Americans don't do this when borrowing money, and that is why so many are broke and always living paycheck to paycheck.

 

[Robbie Hegwood]

Hey Dive, I don't know personally about anyone renting mulchers in your area. You'll just have to make some phone calls.

But another route would be to demo one for a day. You might have to "play" the salesman a bit. Seem ready to buy but they should arange a demo for a day. Especially a dealership that doesn' sell a ton of mulchers. They would be more eager for your business.

Also KM mentioned you doing this part-time, do mean starting the mulching business before you quiet your full-time job? This is what I'm doing so it's more like two full-time jobs!!! But were getting there, It's all in God's master plan, don't rush the master.

But he is right, the lower your monthly notes the better chance you have of making it. Cut corners where you can or put things off 6 months or so and aquire a truck and trailer in the mean time so all you'll have to buy is the tractor/mulcher.

 

[John Ryan]

Hey guys,

A friend of mine e-mailed this string to me. It close to home because I'm were Diver is. My plan is made, marketing is in place, videos made the whole bit. It's been a long road to hoe so far, but I'm not giving up. There is no one in my area mulching. I know for a fact that this will work.

Banks in this area (Central & East Texas) don't like start-ups. Once you're up and going, the bankers fall all over them selves to try and give you money. It's back *** back wards as far as I'm concerned.

After reading the string, of which there were lots of good ideas and tips, I see where you guys are saying the RC 100 with forestry package is going for $60k. Is that right?

I've been working with Texas Timber Jack in Lufkin (co-maker of the Tush Hog) and he's giving me a "discount" of $110k. That includes the Tush Hog head, forestry package and cab over pressure.

If you guys can steer me to the dealer in your area, I can drive there and pick one up. A $50k savings will go along way. After reading this string, it's real hard for me to believe that any cutting head costs $50k. Can you imagine what I could do with $50K in my pocket instead of putting in someone else's pocket.

I know this string is old and long now, but if you could, please let me in on some of this info.

John

 

[rox]

You have thoughtit through and made your decision, hopefully your wife is 100% supporting you so the BEST of LUCK to YOU! I hope your dreams come true.

 

[John Ryan]

Oh yes, it's great to have the better have supporting you. In fact she's helped do some of the research and writting. Thanks for the support guys, I'll be here daily reading and asking questions.

John

 

[CallChopper]

Hi guys,
DON'T DO IT!!!!

Callchopper.com in the biz 3 years. Nevada County CA. ASV 100 FAE fixed tooth carbide head, Int . Cargostar truck, 325 gal fire trailer.Making the payments, Making ASV dealer rich. Last year replaced tracks @ 900hr. $5400, another $5k for "parts" Made my own forestry guards, put a10,000lb. winch on the stern (you WILL get stuck). I do most of the maint.
How old are you?
ASV will kill you in down time. The ASV is a great loader. It was designed to move dirt, it does this very well. I have a 4-in-one bucket also. BUT when you put a 2000lb. cutter on it. Track life is 1/3rd of dirt movers. Here we have manzinita, a very tough but brittle mini tree. Full power needed to make money clearing this. A day like today in alder, ceanothes, and blackberries is a day on the beach. Unless something blows. Get an ASV up around 2000 hours and things start to go. Bogie bearing seals (have to pull the track, it's 400lbs). second set of tracks, broken axels Yes! Every one breaks them here (5 in the county) except me. For every 4 days working expect 8 hours maint. Oh, be sure to pull the belly pans (10 bolts) to clear the brushy bits every 10 days. Old ASV's in Nevada County don't wear out they burn up. 4 total loss in the last 3 years. Check out how easy it is to ignite track rubber. All fuel hoses in eng' compartment .. should be shielded. But they are not. You WILL have a fire. Nothing comes close to the power for size, but you pay, Engine is a Cat Perkins. Cat Dealers sell Cat loaders, Not ASV's. Your engine (Perkins) is worked on by the generator service division. Love the engine. Cooling... Look for the reversing fan. I could go on...
Check ASV RC 100 Maintenance

Selling everything.

The slower you go the more you get done....
Hasta....
Chopper.

 

[Mark One]

I live near Richmond, VA and I have been researching this business for several months. I just recently found this site. Seems like a wealth of information from many very experienced operators who have paved the way for upstarts like myself. I am just about to fire up this new business and obviously want to make the ideal choice for equipment.

I have looked at and compared about every loader made with the high flow capabilities required to run a Fecon or comaparable cutting head and I have a question. The Rayco or Fecon FTX 90 may have a few less hp than some others, but doesnt it seem logical to run the machine that the factory has matched up with the cutter? Looking at the running gear it just seems to be tough as nails and well engineered to stay alive in the woods and it seems to have better cooling capabilities than the rest. I am very interested in your comments and advice.

Thanks
Mark One

 

[DirtyWorks]

Welcome Mark! I too have been researching everything I can get my hands on and have come down to the Rayco partly because of local service. Good luck on your decision. If price is no object then the Gyrotrac GT18 is definately hard to beat! Just keep the prices high for the rest of us

 

[Robbie Hegwood]

Hey guys. If I'm not mistaken a gyro salesman siad they are doing away with the GT-18, sticking with the 13 and 25. Also I have the current prices on them. Let's see 1 GT-13 or 3 RC-100/heads? No brainer!!! Atleast double the income with 100's.

And yes for dedicated mulching those tractors you described are about the best. But at a price. They tear the ground up pretty bad. Alot of my jobs wouldn't go for that. Some of my pickyer clients even my 100 disturbs alittle much. You still need a tractor for sensitive jobs. I would like to have a 130 for a second machine to complement my 100. Plus after running both I can literally run circles around a tracked tractor. Again it's what bill your trying to fill. That's why there are so many variations of mulching tractors. No one tractor works everywhere.

Another big factor is price. You can shop around and find a 100 with head for around 75's. Tracked tractors go for 100k plus. 25k will fund you for a year. I guess it boils down to budget and customer requirements. Plus a tracked tractor will wreck a trailer deck.

Plus if you factor in the higher price of a tractor your operating cost goes up and so does your hourly rate. It's easier moving up in tractor size after running one awhile and seeing where a bigger tractor would and could fit in.

Robbie

 

[rutwad]

And yes for dedicated mulching those tractors you described are about the best. But at a price. They tear the ground up pretty bad. Alot of my jobs wouldn't go for that. Some of my pickyer clients even my 100 disturbs alittle much. You still need a tractor for sensitive jobs.

Robbie

Hey Robbie,

I've heard rubber tracks are more sensitive to the ground, but I've wondered about that. When I turn my RC100, it "pushes" the ground just as I figure steel tracks would. In straight travel, neither will harm the ground. What is the big difference?

Also, I've seen times when I think I would not have gotten stuck if I was running steel tracks, but who knows?

 

[DirtyWorks]

Rut, Some tracked tractors have single and some have triple grousers. The 87L has tripple so there would be less disturbance than single but more than rubber. One small trade off is traction.One big plus to metal is when you get stuck, and you inevitably will , steel tracked machines are WAY easier to unstick than rubber. also easier to change and less expensive in the long run.

Robbie said it right, it depends on what your goal is.

 

[Robbie Hegwood]

Hey guys.
Rut, I know what you mean about turning, but a tracked machine does it far worse. Our rubber tracks being thicker and contured (spell) on the side will not grap as bad. Metal tracks have a sharper corner and would rather dig than float. You can manuver carefully with a 100, I just didn't see not tearing up the ground with the C-130 I demoed. But at the point where you are using a 130 that isn't an issue. It's a tradeoff for being able to clear larger material.

As far as getting stuck. The tracks on a 100 are really designed to float over the ground. The track luggs don't really help. When in mud the pack smooth with mud anyway. It's just a floatation issue. I have not been in mud with metal tracks but can definitely see the advantages there.

But it's not just a track issue in the comparisions. It's the total packages and the prices they carry. Also the ability you need. We of course all "need" bigger tractor but it's that darn monthly reminder that's a bummer!!! Then there's always the hauling aspect. Bigger tractors require much bigger trucks. It's a snowball effect big time.

Robbie

 

[Mark One]

Thank You all for the advice and comments. I will be making a decision within a couple of weeks and will stay tuned here. I have studied this business, the variety of equipment and have compiled what I believe is a thorough business model. I am definately getting in as there are only a couple of other guys into it within a 100 miles and all are steady at $200+ per/hr. I feel confident the work is there and that with careful decisions and aggressive maintenance I can profit at that rate. The next step is the "Big One" in writing the check.

One thing that really sealed my deal was mentioned earlier by someone else. My wife is 100% ready to get this moving. We did a demo on our farm with the FTX 90 and she ran the machine most of the time. This will help greatly having her committed to the cash outlay and willing to share in the work.

I will be glad to share any of my research with anyone who it may help. I have a couple of other questions. Are any of you marketing your business through a web site with video of your work and before & after pics? What advertising has gotten you the best results?

Thanks Again
Mark

 

[Robbie Hegwood]

A husband and wife running a pair of FTX 90's. I can think of nothing better. Our wives involvment is crutial. My wife knows more about these tractors than some salesman. She put the poor gyrotrac salesman thru the ringer. She knew when he was qouting unrealistic numbers. I was quite funny.

With the hourly rates your area is supporting and the background work you have done you sound set. Plan for the worst, enjoy the adventure.

Have a look at our web site Trinity Mulching - Atlanta Georgia Mulching Company The best advertising money we spent. Have a knockout web site and let your other media refer back to it i.e. truck logo, newspaper ads, flyers, etc. Then have your web site with video and good before and after pictures. It has worked extremely well for use. Oh Yea. Most important, We are faithfull and it was God's plan. Were just enjoying the ride and doing his work along the way!!! Robbie

 

[Mark One]

Very Impressive web site. Thank You very much for your suggestions and advice.

I hope I can return the favor somehow, someday. This will definately help us getting started.

Mark

 

[rox]

You know what Mark,
"No guts o Glory."
"No Pain No Gain"

You have the most important asset to your success, the Love and encouragement adn support of your spouce. God forbid if you go down flaming at least you don't go alone, you have your partner at your side. No matter what happens in life you can always always recover. You never need to stay down for long. The worst is when you don't see eye to eye and one holds the other back. Sometimes with good reason, and sometimes simply do to Risk Aversion. You have the backing of your partner and that is the most important thing. She got your back...

Everyone here wishes you MUCH MUCH Success. No Guts No Glory, Mark.

 

[Mark One]

Thank You for the kind words and advice. I have a few remaining questions. When you contract to do work for a client, Do you have them sign any waiver of damage or injury caused by the machine? Do you have them sign anything acknowledging that they are responsible for the property they are having cleared? Do you get any deposit or payment up front? and.....last but not least, do you charge for transporting the machine to the job?

Thanks in advance for your help with these questions.

Mark

 

[LoneCowboy]

I don't have a mulching business, but here's what I think, both as owning a small business and a customer.
1. i hate deposits. If I special order something (seed, a furnace, a hot tub), then I should expect to put down a deposit, but for just labor? no, i hate it and I don't do it to my customers. You should be big enough to survive waiting out a couple thousand dollar job, otherwise I'm going with a competetor. Now, if it's a really huge job, I do think it's reasonble to have some payments. Maybe 20% upon 25% completion (or so many acres) or something like that, because it's not fair to you either to be on a job for 2 to 3 weeks and not get paid.

2. Damage or injury is why you have liability insurance, you do have liability insurance right?

3. No, I don't charge travel time. In a regular job, do you get paid to travel to work? of course not. If i'm working by the hour (and generally I don't, most people like a direct bid), my time starts when I arrive and ends when i do the bill. I'ts your responsibility to get there, so bid correctly for how far away a job is.

BTW, good luck on your new venture, very exciting.