Snow Equipment Owning/Operating Indulge My Business Idea for a Minute

[Olympus]

I need some professional advise from the more experienced members. I'm currently in the market to upgrade tractors. Right now I have a John Deere 750 (20hp) that I use to brush hog 6 acres and grade a gravel driveway. I've been thinking of upgrading to a comparable size tractor or SCUT so that I can get a FEL and hydrostatic tranny. I've been preparing to spend $13K maximum and I've been researching the obvious choices.

Then I had a thought today that might totally change my direction, and that's where I need advise from the members. Instead of spending $13K to buy a SCUT outright, what if I jumped up to a small compact tractor with a cab? Still keep the FEL and hyrdo tranny though. I would be putting approximately $13K as a down payment and then I would be financing the rest. The reason I would consider a very small cab tractor is that I could every easily get the approval to do snow removal and salt spreading for our subdivision. I could offset the additional cost of the more expensive tractor by putting the tractor to work for me. I would be able to pay off the tractor faster with the funds received from the subdivision snow removal. I live in Missouri and we don't get a ton of snow, but we do get one or two good snows per year. The last few years, we've gotten several big snows. The current landscape guy that does the subdivision doesn't do a very good job. He charges $400 per trip through the subdivision to blade the roads and $600 per trip to salt the roads. We have approximately 2 miles of blacktop roads in our subdivision. I have a full time job, but it is very flexible and I have plenty of time off that I could use to maintain the roads. I could also supplement by driving around neighborhoods and charging homeowners for driveway snow removal. I'm confident I could go house to house and earn a lot. I could charge a lot less than the main companies because it would not be a job for me. Any money I earned would just go toward paying off the loan of the tractor. Once the tractor was paid off, I would have no obligation to continue doing the snow removal for the subdivision if I found out that it was more hassle than I wanted.

So there's my big scheme. Can you tell me if this is a pipe dream or if I should stick to just upgrading my little tractor like I was originally planning on. Keep in mind, when I say a cab tractor, I mean the smallest one model I can get so that I can still use it to brush hog my little 6 acres and grade my driveway. I can't use anything very big for my property.

 

[YardBikeBob]

I need some professional advise from the more experienced members.

Probably don't qualify in either category but opinion/price is right: Sign up to do the job now. Buy a snow suit. Start saving the income for your new tractor. If, a year from now, the only PITA part of the job is the snow suit, buy whatever tractor you want based upon your earnings history.

And if you think I'm a bummer, call your insurance agent.

Bob

 

[dave1949]

Ideas like yours have been beat around on various threads over the past couple of years.

I don't recall anyone reporting back that they actually tried this and it worked out.

Insurance.You will break or damage something eventually. Your homeowner's policy usually doesn't cover the use of your tractor for commercial purposes, or off your property.
All-weather salt and sand storage.
Something to load the salt/sand into the spreader.
Stupid calls in the middle of the night.
Your little tractor is not the equivalent of a pickup truck with plow, you could get hammered and have to hire someone yourself.

 

[smstonypoint]

Just a few things to consider.

1. Ownership and operating costs of the cabbed tractor, including Insurance for business use.
2. The value of your time.
2. Tax issues (Schedule C for self-employment and FICA taxes) versus other income (Self-Employment or Other Income?).

Steve

 

[Olympus]

I guess I could have been more clear. This would not really be an actual business. I would not be getting any kind of insurance. Any damage to my equipment would be my own loss. The subdivision would not hold me liable for any to the roads either.

This would simply be a way to offset the cost of ownership until the loan was paid off.

 

[murphy1244]

Is your brother a Lawyer? You might need him.

 

[vwnotrunning]

The subdivision may not hold you liable, but a neighbor might. Things get moved unexpectedly when plowing snow.

 

[Industrial Toys]

Plus there won't even be anything left of the tractor when the salt gets through with it.

 

[RDrancher]

Not to sound harsh...well maybe...

So you want to take over the work of a guy that's doing this for a living? Maybe married with kids and feeding his family? And you said you have a job, right? How would you feel if someone cruised on in to your work and took over your job...as a sideline?

Nothing ticks off full time contractors more than guys who have a full time job and do work for cheaper "on the side".

 

[dave1949]

It is very easy to break or damage things in other peoples' driveways and yards when plowing snow.

If you get into any kind of accident while off your property, you will wish you had insurance. A light bump to a plastic bumper can cost $2000. You need the proper flashing strobes and such too.

Don't minimize your risks.

 

[Olympus]

The subdivision is a small number of homes all on 3+ acres. There is nothing to get damaged on a neighbors property. There are no vehicles parked anywhere near the road.

And we are a small, rural area. Nobody would scream "lawyer" unless all other options had been exhausted. And I can literally see no reason anyone's property would ever get damaged in the first place.

 

[smstonypoint]

Is your brother a Lawyer? You might need him.

Any CPAs in the family?

Steve

 

[/pine]

Go for it...!
Just get a good umbrella (liability) contract with a reliable company and see where it takes you...it will be a learning process that you can't get at any school/college...

Good Luck...

 

[CDN Farm Boy]

It's an interesting area where you live if you don't have to have liability insurance to plow a road. It's not the damage to your equipment that is the problem, it's when you hit a car or house and have to fix that or damage their asphalt driveway. The biggest issue will be when someone else gets into a tangle because the road wasn't cleared properly. You can bet your ***** that their insurance company will be knocking on your door.

If you can afford to cover those costs out of your pocket, just buy whatever tractor you want and leave the snow clearing to someone else.

(By the way, I'm one of several Supervisors for my areas biggest residential snow removal company serving about 4400 homes)

 

[murphy1244]

Any CPAs in the family?

Steve

Yea might need one of them too. Already adding to the family you might want to do a bigger subdivision.

 

[CDN Farm Boy]

It appears that several of us were typing similar thoughts at the same time.............

 

[Olympus]

I guess it all sounds like a bit of overreacting. If I decided to only do the snow removal in our subdivision, that's $1k to $4k per winter that could be put straight toward the loan on the tractor.

 

[Olympus]

It's an interesting area where you live if you don't have to have liability insurance to plow a road. It's not the damage to your equipment that is the problem, it's when you hit a car or house and have to fix that or damage their asphalt driveway. The biggest issue will be when someone else gets into a tangle because the road wasn't cleared properly. You can bet your ***** that their insurance company will be knocking on your door.

If you can afford to cover those costs out of your pocket, just buy whatever tractor you want and leave the snow clearing to someone else.

(By the way, I'm one of several Supervisors for my areas biggest residential snow removal company serving about 4400 homes)

Shoot. The current guy rarely does any kind of good on the road. It has been a solid sheet of ice most of this winter.

The road is privately owned by the subdivision. I would not be getting anywhere near private driveways. There is zero chance of hitting a vehicle or home in the subdivision.

 

[Industrial Toys]

Your insurance may not care if you do this one project or do it full time. I have found it is becoming increasingly costly to try and just "dabble" in such things. My friend is a condo manager and it has been a real eye opener as far as contractors and liability.

I undertook a mowing job at a (security) customers this last summer because the old guy doing it, well just got too old, maybe in his eighties. First time there, my canopy caught their expensive volleyball net!

My intention for hiring myself out with various equipment was never so much about making money but just to be able to expense the equipment through my business.

 

[murphy1244]

Your insurance may not care if you do this one project or do it full time. I have found it is becoming increasingly costly to try and just "dabble" in such things. My friend is s condo manager and it has been a real eye opener as far as contractors and liability.

I undertook a mowing job at a (security) customers this last sumer because the old guy doing it, well just got too old, maybe in his eighties. First time there, my canopy caught their expensive volleyball net!

How much does a Net cost?