Looking for advice to ponder while thinking about starting a tractor side gig

[Fallon]

They say no man ever buys a drill because he wants a drill, what he really wants is a hole... When I bought my tractor it was because I wanted a dam tractor.

I'm happy with my normal IT job & well paid, but I keep thinking I want to spin up a side gig doing tractor stuff. I enjoy working on the tractor & am interested in in making a few extra bucks, probably resulting in being able to upgrade from my base L3200 to a grand or something with a cab.

My Tacoma is maxed out with the tractor, tilting deck trailer with barely enough capacity for an implement (6,500lbs towing capacity). It hauls fine, but I don't like pushing things to the limit. A "farm truck" as a backup vehicle & something for my father-in-law to drive while in town in addition to being a better tow vehicle for potential side job stuff is also in the plans. Until then the Tacoma should take care of business.

I'm not interested in doing work for chump change and only covering may time & not equipment costs or what not, but all my implements are paid off & the tractor mostly paid off (covered by my day job at least). I've been scrounging at auctions a bit for some extra implements to use around my place with this gig lurking in the back of my mind as a good way to rationalize ferreting out great deals on new toys. I missed T-6 Harley rake listed at $3k, and have been kicking myself for not quite being able to afford it or quite close enough to starting a gig to be able to justify it.

Not sure if I'd go with hourly or bid rates on jobs. I'm sure I'd end up taking a bit of a bath bidding for a bit until I got my estimating skill up to snuff. I can afford to pay for that bidding education though.

My gear
Kubota L3200 with loaded R4s & a TnT kit
Loader (bucket & pallet forks)
16' tilting deck trailer + more than enough chain, ratchet straps & binders
72" box blade
72" back blade with skid shoes & hydraulic angle
5' rotary cutter
5' tiller
6' flail mower in need of a fair bit of work (paid $100 for it, but it's in pretty decent shape for the price, need some new hammers & TLC though)
8' x 4' chain harrow

From what I've gleaned lurking around TBN for a while, the most important aspects to consider in order of importance are:

Insurance
Insurance
Insurance
Having a tractor
Advertising or otherwise getting & keeping clients
Logistics
Knowing how to use your tractor & implements

I saw a post or two mentioning insurance was in the ballpark of $1,500 a year for a commercial policy. Is this about what i'd be looking at? Anybody know if the rates are variable based on the amount of work you expect to do? Any recommendations for insurance agents to talk to?

Do most people do this as sole proprietor? Its been years since any business classes, but I remember some good things about a LLC.

Anybody use a contract to cover themselves & help limit potential liability? Mind sharing?

Am I missing anything or anybody have any suggestions? Any better threads or other info on the internet I can dig into for some more info beyond some of the ones below?

Some good related links I've dug up & read already:

http://www.tractorbynet.com/forums/owning-operating/58452-tractor-business-advice-info.html
http://www.tractorbynet.com/forums/owning-operating/199703-new-member-starting-tractor-business.html
http://www.tractorbynet.com/forums/owning-operating/22666-new-tractor-business.html
http://www.tractorbynet.com/forums/owning-operating/297932-my-tractor-business-website.html
http://www.tractorbynet.com/forums/owning-operating/65105-part-time-tractor-business.html

 

[Kenneth in Texas]

no to the sole proprietor, best to form a LLC and i always have the customer sign a contract that i had my attorney draw up releasing me of liability and putting responsibility on the customer for things such as informing me of any dangers, septic tanks, wells, obstacles, etc etc. I usually do and prefer to do jobs by the hour, that way i tell the customer they can stop me anytime (after my 3 hour minimum) and just pay for the hours ive worked rather than me bidding a job and it taking much longer than i anticipate.

Far as advertising, some ads in the local newspapers seem to work best, i keep small standing ads in most within a 25 mile radius but after a few years in this business most of mine comes from word of mouth now.

Looks like you have all the necessary attachments and i know you have an excellent tractor, so go for it.

Only thing ive changed in my part time tractor business is that i dont do mowing anymore, i hate mowing, very boring and with just a 6' mower i cant compete with the guys with the large mowers plus most of the mower jobs i was getting were places that havent been used for years and they tended to have junk dumped on them, no fun running over a bunch of wire or car batteries in high grass, so now i just concentrate on dirt work, minor land clearing, driveways and things like that.

Good luck if you take the plunge, like you i started doing it because i really jut enjoy working with my tractor, either on my place or others long as im paid :thumbsup:

Any questions feel free to ask.

 

[breadtrk]

Fallon,

We are in the same boat, I'm in IT, like it, make decent money, got the tractor because I wanted a **** tractor.

I'm looking into stuff like food plots, light bush hogging. Surprisingly several neighbors have approached me about water lines to their barns and whatnot when they see the backhoe. I just don't know what to charge and how serious to get into the legality of it. I mean it is a ditch and some food plots for crying out loud. Some in here will tell you to get commercial insurance, CDL's, DOT numbers, carbon fiber chains, insure the air in the tires.... on and on. When does it just become too much hassle to use the darn thing?

 

[Fallon]

What to charge to some degree can be the easy part. I think my operating costs for the machine are about $12/hr + depreciation + implements. Add in the tow vehicle & trailer (already had the trailer, already have other needs for a farm truck as well). And things move to somewhere over $20 an hour by my reckoning. I haven't priced out insurance yet & that may throw a real monkey wrench in the works for the moderate part time hours I can do. I don't think I'll operate outside of for friends until I can get insurance sorted. I'll probably end up charging $50-60 an hour or using that as the basis for my calculations on per-job bids.

I'm thinking I'll be doing up a LLC to help shield the house & what not if insurance fails or things get really ugly.

My gear shouldn't weigh enough to need a CDL.

I'm probably still a little ways off. Just collecting information & mulling things over for now, so when I'm ready to move I can do it right. The slower I go, the more things that I find out & can work our in the back of my head or research when I have time.

 

[JJZ 109]

I own a sole proprietor business. My accountant told me to make sure that I have a good liability policy (which I do). He advised against the LLC in my situation. He stated that any good lawyer can poke a hole in an LLC, so it wasn't really worth it to pay all of the initial fees to set one up as well as the yearly LLC fee in my state. Better to spend the money on insurance, he said. But that may vary from state to state. That's why it's best to get advice from professionals.
If you're going to have graphics on your vehicle to advertise, might want to check in with your auto policy company. Some will let it slide and others will deem it a commercial vehicle and want you to get a commercial policy. I have a commercial policy for my bucket truck. But my auto insurer is OK with the fact that my pickup truck graphics are solely for advertising. The pickup isn't really used a lot for the business. DOT numbers can be an issue in some areas where the enforcement is a little more zealous. Especially if you have the truck lettered or logoed. I have them on the bucket truck but not the pickup. In 5 years, haven't had an issue yet.
You really should sit down with an accountant to sort out tax ramifications and maybe an attorney for legal particulars. The insurance premium will likely depend on the business. I know that I'm in the $900 area, but it can be more expensive for businesses like roofing or tree work.

 

[vulcancowboy]

Count me in as another IT looking to use my tractor to make some $$, the possible difference it that I HATE my IT job and would love to retire early and use income from the tractor to supplement my other income. I have an L3400HSt with a FEL & backhoe along with a bush hog, finish mower and rear blade. I just got my first paying "job" yesterday digging a 50' x 24" deep trench for a friend. It will be interesting to see how long it take me as I've not used the backhoe very much yet. I'm anxious to hear what advice others have to offer.

 

[RDrancher]

Sole proprietor here too.

Besides having liability insurance, keep in mind that things get sketchy when a backhoe bucket hits the ground. Insurance companies want to make sure what depths your going to. The depth clause varies. You don't want to get into the "explosion, collapse, underground" area. Remember...no matter what depth your grading or excavating to, be sure to call you local dig-alert service to have utilities marked. Cable companies are notorious for burying line less than 6" deep.

Don't forget commercial insurance for your towing vehicle and trailer. You won't be covered if you get in an accident while working.

 

[breadtrk]

I have found Insurance is the most complicated part of this. Quickbooks will do the taxes part if you do the data entry part. Insurance agent is my good friend, I have been with Liberty Mutual for 30 years. It gets really complicated about when you are and are not covered. Don't fall into a sense of false security because you have some umbrella policy. That umbrella is full of holes.

 

[alia176]

Just wondering if Fallon made any progress with his side business since this post, about a year ago! I too am thinking along the same lines and enjoyed reading all the inputs that others have shared.

 

[Fallon]

Nope, no progress at all. I may come back to it, but the idea is shelved for the moment. To many projects around the place & I'm not ready to put a pile of effort into the insurance research, not to mention the pile of cash. The little bit of research I did indicated that doing it as a side gig would cost similar amounts to doing it full time & that's not to cost effective.

Also I'm trying to avoid sitting for now due to a herniated disk in my back being a bit aggravated as of late.