side business using new tractor

[fishman]

I have been reading posts on this website for the past 6 months, but just got around to registering about a month ago. I must say that everyone here seems to have a positive, helpful attitude. This board is great!
On to my question, which probably belongs in a generic tractor thread. I have been looking at the prices for some of these tractors and way-hey, they're high! A 3010 with loader for 17,500! A very capable machine, but house payment, truck payment, you know, etc. So: Do many of you do contract work on the side to help pay for your machine? Is this feasible? I know some of you use your tractors every day to bring home the bacon, but I can't do that. I'm talking about driveway grading/dirt leveling/shredding on the weekends or after work on occasion. For anyone that is doing this: What kind of hourly rates do you charge, and what kind of advertising do you do? Have you been able to make your monthly payments or an actual profit? What kind of pitfalls might one encounter?
This may be an off-the-wall question, but I know that if it is, everyone here will respond with all of the grace and tact they have in the past. Thanks in advance for your input.

 

[Thomas]

John,
I found out once people know you have a tractor they well seek you out.

I would suggest some insurance also good contract if your going to be in the side business....protect yourself!!

Today tractors aren't a toy anymore,more like and investment.

Thomas..NH /w3tcompact/icons/wink.gif

 

[Bird]

fishman, I think it depends to a great extent on where you live, i.e., what's the population in your area of folks without tractors who need that kind of work done. I'm not far from you (Navarro Mills Lake) and I do just a tiny bit of paying work for other folks; not enough to even think about paying for a tractor, because most of the people in my area have their own tractors, plus there's lots of folks who own tractors looking for jobs to do with them. So, what little work I do with my B2710, I only charge $20 to $25 an hour (about the same as they could rent the equipment to do it themselves). Awhile back, I was in Ft. Worth and talked to a guy who had just paid $75 to get 3 acres mowed, so maybe if you're close enough to a larger town, you might make a profit at it, but not within 20 miles of me.

Bird

 

[RobertN]

Hey Bird,
What are rental prices like in your neck of the woods? Here in N. Calif, going rate for a B2710 is $225/day, 8 hours. Most are a minimum at that.

RobertN in Shingle Springs Calif

 

[gordon]

The thing you have to figure out what kind of market is out there for tractor work. The next thing the hourly rate in your area. In Birds post he mentioned that $75 for three acres of brush hogging. In this area you would have so much work you couldn't cut it all. So go figure. Here is a link of a discussion awhile back about charges. http://www.tractorbynet.com/cgi-bin/compact/showthreaded.pl?Cat=&Board=construction&Number=1342&page=&view=&sb=&vc=1#Post1342 might head you in the right direction. Do you already have experience running a tractor???

But first and foremost if you do get a tractor and charge for work don't and I repeat DON'T leave your property without insurance!!! You don't want some knucklehead ending up with what you have worked so hard to get.
Good luck
Gordon

 

[Billc]

Fishman, good to have you apart of the board. And yes tractors are expensive...whether they are new or used.

I guess I qualify as someone who hires out but not lots. I pick and choose my jobs based on what I'm doing at my place. We bought this place a little over a year ago, and are turning it into a small, nice horse ranch that will have some cows as well. Anyway, if I am doing something at my place that I truely hate doing, you can bet I'll take the tractor job!

I sold Electrolux vacuums for 19 years door-to-door. I wasn't the type of saleman you saw at your door once, sold something, and then you never saw me again. Rather, I worked the same areas over and over. I wanted everyone to know me, know what I did, and know that I'd give them great service after the sale. I do my tractor work the same way.

As for price I charge $30/hr. That is about the going rate for this area. If you ask around you'll find the going rate in your area.

I've noticed more and more fellas are charging a "destination" fee. In other words a customer is being charged $30 just for you showing up to do the work. Personally I think this is crap. I have some rent houses, they require normal maintenance. My regular plummer moved away. I called a new fella whom I heard was good. When I got his bill he had tacked on $25 as a "destination" charge. This really burned me. I never used him again. Yes, he made $25 exta off me, but he lost a lot of money in the process. So I don't charge a "destination" charge.

Another little exta I see happening is a 2 or 3 hour minimum. In other words, for someone to show up to work for you they have to do at least 2 or 3 hours work. I don't do this either. Most of the time the work they hire me for takes seveal hours. Plus, most customers always find other things they needed done. In the end I usually end up working at least half a day or more.

Most of the work I've been hired to do this year is either brush cutting work, or establishing/maintaining a pasture. The pasture work can be disking, plugging, seeding, fertilizing, or spraying. I've also done some loader work; moving a pile of dirt and smoothing it, getting rid of a pile of rocks, regrading, etc.

One thing to be aware of is the fact that you need the attachments to do the work. Several times I've agreed to do a job, had to buy an attachment to complete the task, and made no where close to what I spent. But, the next time I am called on for a similar job I'll have the right attachment. Figure I'll come out way ahead in the end.

Another thing to remember is getting your tractor to the job sight. If I'm doing work for someone and they are 5 or 6 miles away, I'll drive my tractor to the job sight. If they are further I put the tractor on the trailer. You may want to check on trailer prices if you don't already have one. Also you need something to pull that loaded trailer.

As to advertising, in Georgia we have a farm paper that comes out once a week and is put out by the Sec. of Ag. It is free to advertise in, and is sent out to those you ask for it free. (Your tax dollars at work). That is the only place I advertise. The rest of the work comes from word of mouth. I learned a long time ago if you have a good product, charge a fair price, show up on time, and do more and better that what you said you would, you'll have more work than you can handle.

You may want to advertise in your local paper, and put out some small signs at buisy corners around your house, put up business cards at local stores, etc. This is sure to get you some work.

Pitfalls? You are cutting an over grown pasture and "find" a large rock. You take on a job, and half way through you realize you don't have a clue what you are doing...this usually involves buying a new attachment or two. You tell someone it will take 3 hours to do a job, but it takes 6 hours instead.

This is probably a lot more than you wanted to know, but hope it helps.

Bill Cook

 

[john4nh]

Gordon pretty good post and good link to read. I have been in the business (part time since i was kid installing septics) I now do not install septic (county regs or getting goofy) But i continue to mow box blade and operate case 580. For the case (bachoe I generally try not to move it for less then 500 a day being an 8 to 10 hour day. On my mowing Its tricky bidding because if you contract on lots as i do they may only take an hour to do one or less. ( I try and take my time) So right now Iam getting 125 a lot. Its a little high but you have to make it worth your while. The other thing to remember is that at least for me I have a 20 foot goose neck with two 7000pound axles and it ways guessing around 3 to 4 thousand pounds. takes about ann hour on average to hook up and get tractor maybe change implements load tie down. Also check all the darned tires on truck trailor and tractor. Also if you are any hting like me and want your equipment to last I grease before every job if its an all day job. Not to lead you to believe I dont any other time but between oil changes it may be 3 months and if your gonna work it you need to grease it. My point is If you do not bid correctly you end up working 1 to 2 hours for free, sure you can charge travel time but how about when you come back and do the above mentioned work in reverse? I can not see working for free. Theres money to be made, but if no one turns your bids down your to darned cheap!!!!

About advertising, I used to make my own signs. Iam now in the process of ording the vinyl signs. They look more professional and besides i hate to paint. I just purchased a stump grinder so I will be getting these new signs to show this new service I have. Also business cards are a most. I think I got 1000 for like $26. Also where ever you work you need a sign with your number. Some people will not stop to talk to you, they would wheter call.

I hope this helps, sorry so long..

 

[john4nh]

Mr. cook good post. But your belief that a (destination charge) is crap is off base. How can you justify putting your tractor on the road for 5 to 6 miles for free? Have you heard those tires dont last long on asphalt? What iam trying to say is your putting lots of wear and tear on your-self on your machine for nothing. Meaning money, Iam sure like my self and others you enjoy the work, for that iam sure its hard to put a price on that. But for those of us who are trying to make a payment, mentality like that hurts us. ALso when you stated buying new attachment(s) to finish a job, I agree thats a good way to upgrade equipment. But I have to disaree whole heartedly with you learning how to operate your equipment on my clock. Its like calling that plumber and letting him learn how to fix your plumbing while your paying him. I bet you would never call that guy back for sure...

I hope you do not take this wrong just trying to show you the otherside of the coin...

 

[Bird]

RobertN, I think everything is higher in California. The nearest equipment rental place to me rents John Deere and a tractor with 5' brush hog is $160 a day (8 hours on the meter) plus $10 if you need their trailer to haul it on. Last year my brother rented a Case dozer (forgot what model) from them for $320 a day and they delivered and picked it up (20+ miles each way). There are a couple of brothers in the area who have some big Cats, big trucks and trailers, etc. and they dig stock ponds, etc. for $60 an hour and they are really good and fast at what they do.

Bird

 

[fishman]

Thanks to all who have replied so far. Bill Cook. . . You obviously have been through this before, thanks for your insight. Insurance is something I had thought of, but I don't really know what is needed. Is the umbrella policy on your home enough? I wouldn't think so. What coverage do some of you have, and about how much did it cost? Sorry for all the questions, but everyone is just so darned helpful here.

 

[ddl]

Insurance is different from your home insurance. It is basically treated as a car insurance. Your home insurance will pay if damage is done on your lot, but if you drive off the lot, you are not covered. Besides you need libility insurance(please forgive the spelling).

I till gardens and such and I charge $30 per half hour/half hour mim.

Dan L

 

[bcarter]

<font color=blue> What coverage do some of you have, and about how much did it cost? </font color=blue>

...and where did you get it?

My homeowners insurance will "supposedly" cover the tractor when its on my own property (I don't know about liability though), but I'm sure that my brother and my dad are lining up projects for it, even as we speak...

So where does one go for "tractor insurance"?


Bill

 

[ejb]

I got my tractor insure thru my regular home insurance agent, but it is underwritten my a company called "Inland Marine"..for $40K worth of equipment insurance, it costs me about $300/year...well worth it in my opinion, especially when you consider a total loss like a barn burning down...the size of my tractor is such that it would not be covered by a normal home policy...if you have a smaller tractor, you might want to ask your agent.

BTW: the $300 does not cover any liability, i.e. if I do work for someone (which I don't) and I drive over there septic field and ruin it, that wouldn't be covered, it is strictly to cover the cost of the equipment, wether it is on my propery on in transit (on a trailer, can't drive it in the road w/out plates).

I assume liability insurance would be much more.

 

[Billc]

John,

We probably each approach business a little differently. My approach comes from my years with Electrolux. Though I worked on straight commission I never charged for pick-up or delivery, or a service call fee, or if someone had a vacuum hose that needed unclogging, etc. I learned early on that by not charging these fees I was able to make a lot more money in the long run. My customers were more apt to call me. By calling me more often I was able to prove I offered better service. Because of better service they bought more products and so did their friends. For me, this method has worked very well, and I apply the same principles to my little tractor business. It gets me a lot of call backs. I have always felt the real money was in call backs.

You said that my mentality hurts those that work with their tractor to make a payment. Again, please know that my mentality came from my years with Electrolux. There I sold a $900 vacuum door-to-door on straight commission. My competition was a $100 Hoover that was sold at any and all department stores. The only way I could compete was to give incredible service. I think the same is true in the tractor business. There are lots of people in my area who do tractor work. I see them as the $100 Hoovers. I am able to get jobs that they can't because I don't charge the extra fees. I got probably 12 jobs this past summer because when I met with the customer and they asked me what my minium was, or what my destination charge was, I told them I didn't believe in either. I guess the way I see it the folks that are putting on the extra fees are hurting themselves.

As to learning with new attachments, I agree with you 100%. Please know that the last tractor I used was an old Massey 135. When we sold it we sold all the the attachments with it. So I've been rebuying attachments as I need them. I haven't been learning to use the attachments on the job. However, I have been asked to do jobs that I didn't know how to do. I'll tell a customer that I don't know how to accomplish what they want. I'll ask around and see if I can figure out a best way to do the task. If I figure out a way I do the job, if I can't I try to find them someone who can.

John, hope this explains my thinking in this case.

Bill Cook

 

[Anonymous Poster]

You almost have to have an attorney read your insurance policy these days to REALLY know what it covers. Some policies will cover your personal tractor used for PERSONAL use on your other property with an additional rider to your policy. This would be if it falls off the trailer or is stolen. If you are being paid 10 cents for something and they can prove it, everything is different. A lot of guys kind of piddle around with little jobs and hope or don't know the roof can fall on them. Liability on the job is a completely different ball game. I'm constantly amazed at how many times the free utility locate services are not used. You dig up power lines, water lines etc and you're in the hole for a long time. You crush the miss's prize lawn with your ag tires (that the husband said "no problem" to doing) and you can plan on $$$. One of the county guys said the county had a person's permission to dump dirt and found in court that a husband's permission is not necessarily a wife's permission or some such, now they won't give dirt to anyone, they haul it 20 miles to a pit.

If the customer bangs his knee on your tractor or worse, if you leak oil on his property it can be a nightmare. It just isn't worth it unless you have NOTHING to loose. If you rent your place, have no possessions, your tractor's worth about $300, and you have no plans on earning any future wages that could be garnished I'd go ahead and skip the liability insurance. Otherwise belly on up to the insurance bar fellas.

Many states are requireing any work done that you are paid for to be done AS a contractor, with insurance, surety bond, the works. Those guys that charge $60+ an hour for work are a long shot from keeping much of that $60 for themselves.

IMHO, your prices should be such that you could afford to rent a tractor on a weekly basis, and still make wages, if you aren't you're just giving your tractor away. It's like saying it only costs $1.75 a gallon for gas for your new truck. I suppose on a day to day basis it does, but who's going to pony up with the 30K when it needs to be replaced? Tractors that are built these days seem to be very reliable, but go price a few parts with your dealer, you'llthink twice about letting them wear out for nothing.

There's not much "aftermarket" in tractor parts, each model is just to rare to justify tooling up. The guys I've talked to that have anything happen to their machines are lucky if the GROSS receipts for the day or two cover the repair.

I guess I'd say I agree with both fellows. It's nice to be the nice guy and not charge delivery, or have a minimum. If you don't mind working for next to nothing. I've done that for friends and neighbors and don't regret it with the small jobs. Part of life. But the general public? The general public can be a fickle cost conscious bunch. We all have to figure what's gouging and what's giving away the store, somewhere in between is where I'd like to be be.

And learning on the job, I've done it, but only on jobs where by my ignorance I'm not causing a bigger problem that someone else has to clean up. If I run long I would charge what I knew I could do the job for next time.

Some people are so happy it makes up for everything. I saw this guy I don't even know about a 1 1/2 miles away, they had put in a house, the contractor had left a bunch of stumps piled up with dirt around it and burned what they could leaving a big mess. I drove by and saw the guy swinging a pick trying to loosen these stumps out of the ground that were half submerged. I jumped on the tractor, (trusty Ford NH), went down, easily pushed them all out of the ground into a couple of piles, in a couple of passes cleared bare ground around them, probably was there 45 minutes. He was so shocked. His wife said they were just barely getting into the house as it was, and I replied I wasn't invited here I was just there to get some exercise and if she wanted to say thanks she could may cook something or take some food to the senior center rummage sale. I'm pretty sure they did, the guy always waves to me and smiles. I smile back and it was an hour I feel paid off.

He has told people about my visit and I have had to turn down a few jobs that were too big or complicated for me, but I've been able to "pass them up the food chain" to a couple of contractors that I have used that are nice guys and will treat them right.

It all comes out in the wash.

Or so we hope!

Dig on

del

 

[john4nh]

del wanted say that was a very informed post, and yes you did a very noble deed. I myself have drove my deere through flood waters to get people out in 94 and pull cars out of flood waters for free.. Of course as you said good deeds or returned and I was giving jobs later and more importantly looked upon differently in my community.. My point to mr. cook was that only if he thinks your making 30hr and only charge 30minutes or 1 hour your probally only making 10 bucks. You know in this business other then mowing if you do the job right the first time theres not much call back. My experience. Word of mouth the best advertisement in my opinion.. And I will be the first to tell you that what I charge still is not enough, we Havent even touched fuel prices..heavey haulers dump trucks ups every body has had to increase rates.. I just finished a job aprox 30 miles one way from my home, I did not figure fuel cost and ended up spending about 175 on fuel. Iam sorry but thats alot of money to eat. I will not make that mistake again..

Mr. Cook again I feel different to you on your interpertation of vacs. I see low ballers as the 100 dollar vac. i myself am not a 900 dollar vac but in the middle, i reserve the 900 dollar title to the contractors. I myself am working up a business to get out of the chemical industry, then god willing I will be the 900 dollar vac..

One thing about insurance you gotta have it in this lawsuit crazy society we live in.. Look at florida...

thanks

 

[Jag]

DEL darn good post........

 

[Anonymous Poster]

John, I agree, as many small business owners know, if you REALLY add all the hours you aren't fishing, watching TV or whatever, if you add every hour you are fooling with the government, working on your stuff etc, it's REAL EASY to be making minimum wage, or worse if you don't watch what you charge. My state in particular (Washington) has decided to run a pole up anyone dumb enough to work for themselves (or have a job without health insurance provided) in this state you don't have to take responsbility for yourself by having health insurance in advance, you can just wait until you get sick, they threw out the waiting periods for all those people, so you know what that means! The do gooders get to feel good while the insurance for the idiots is placed on the backs of the responsible folks that have insurance BEFORE they need it, which is the only way insurance really works. Typical family policies can run $600-$1000 a month. I'm thinking of convincing myself I'm mentally ill so I can take a nice rest in the state nuthouse and get some of that money back! I'm hoping they'll give me a room with a view so I can see the guy maintaining the grounds with his Kubota/NH/JD or whatever!

 

[john4nh]

Well i totally agree with that.. There are alot of us out feeling the same way..That is why if you caught what I was saying that iam in the middle of being part time to full time. I work a regular full time job with benefits retirement etc. Probally if you add it up some where in the neighborhood of 75 to 100 dollars an hour. good job but not what I really want to do the rest of my life..So now as you brought up to make your premiums insurance etc. I gotta make double the cash I make a year now to come close to maintaining the lifestyle we have come accustomed to.. Thats probally while it will be a while be fore i can leave. Unless its up to the big house with you.. You think theyd let us sit on there JD NH or Kb?

 

[john4nh]

thomas that is very true but there are lots of subdivisions where i live where these people are insulated from people like me who still live outside town. So in this situation you have to advertise. I dont know how many time I have heard, I didnt know who to call and then I saw your sign bla bla bla.. So I know it works...At least in this part of the country

John
TX.