side business using new tractor

[Billc]

Del,

That was a great post. You really got me thinking. I don't carry insurance on my tractor. Never really considered it necessary. Looks like I have been wrong about that. Never know when an accident will happen.

Bill Cook

 

[Billc]

John,

Guess we'll just disagree on this one.

I think about 90% of my work is a call back. I live in a rual area, lots of pastures. So most of my jobs are cutting, fertilizing, seeding, plugging, or spraying. I try to steer clear of grading work. Have always thought the contractors could do a better, faster job. The only grading work I'll do is the simple things..."can you move that mound", or "can you make the water drain that way".

One other note, as I said before, very few of my jobs are only an hour...in fact, I can think of only one job that I've done that took me only an hour, and it was around the corner from me. Most of my jobs are several hours to a couple of days long.

Anyway, I do wish you much luck as your business grows, and hope you will be a successful contrator.

Oh, one other thought, and this may help your business to grow. When I'm done with a job I always send a thank you note. Also, because I only will take a job if it's in my immediate area, I'll swing by and see my customers every now and again to see how they are doing. I've gotten a bunch of work from this. Can't tell you how often I've heard them say, "Bill, I was meaning to call you about..."

Good luck to you, John.

Bill Cook

 

[TomG]

Guess I've got to say pretty much the same thing. I ran a sideline sound & lighting company for 10 years. It started out as a service to help community groups with fund raising events etc. However, the service attracted bands that played at fund raisers, and the bands thought they were going to be stars and needed BIG PA. I found myself with over $100,000 in equipment and engineering some pretty big events.

I recognized the potential for serious injuries at my events pretty early in the business. I got insurance to protect myself, and also from a feeling of basic responsibility. The commercial insurance payment took any notion of profit out of the idea. Well, I didn't start out with a profit idea anyway, I also didn't loose much money when I got out and I did have fun. It's probably best to think of a sideline business as a kind of alternative for taking fancy vacations.

What I think I learned is that a sideline business that requires a lot of equipment probably doesn't work very well. The equipment has to be kept busy or it makes less money than savings bonds and a second job. To keep equipment busy, somebody has to spend a lot of time promoting new clients

Basically, once the insurance bullet is bitten, it's really difficult to keep a sideline idea from turning into a full time one. The syndrome starts when you rent a piece of equipment to do a job and then realize 'Gee I've rented that a lot. I'd be better off just buying it.' Of course, farmers know all about expensive equipment that is needed but only works a few weeks a year.

 

[john4nh]

Mr. Cook
I csn see that we just perform two different services, I think that is why we approch it two different ways. 80 OR 90 percent of my work is grading (finish work) So as I said before not alot of call back on that. The note thing is a very good ideal, I will probally try that now that Iam going into the stump-grinding side of this work. I have usaully just made one phone call back to insure everything was still as the home-owner wanted. The type of work you are performing is done around here by strictly farmers with lots of green. (money and equipment) So thanks alot and the very best of luck to you and to every one out there trying to make a niche for themselves and there families..

 

[gordon]

What we do is is two fold, we sell two things TIME and SERVICE. There are a number of different ways to approach this the main thing is to get something you feel comfortable charging for or what not to charge for. I charge for my time involved in a job but I don't feel that I'm honing the customer. Bill think of it as this if you have 10 hours a day to sell in time and you spend two of those hours in driving-loading-unloading time you are now only 80 percent productive instead of 100 percent productive. So in a five day period you are only getting four days of pay---it can add up quick can't it! I can relate to the plumbers charge of travel time for one reason---time is money So so far we have lost 20 percent of productivity for not charging travel time. Now out of our base rate of charge we have machine upkeep-oil changes-grease-tires-filters-and of course fuel. Oh my now we have a tractor payment to consider as well. Hummm did I mention insurance yet. At thirty an hour the above debits add up to another day and 1/2 you have to give away and that is being very light on the figures. So now we are down to $650.00 for fifty hours worked. Now dag nab it I got a job twenty miles from the house and I need a truck and a trailer. Now once again for a cheap payment for truck and trailer figure $150. off the top a week so now we are down to $400. a week for fifty hours worked. oooppppsss just had a break down there goes the profit for the week./w3tcompact/icons/smile.gif

Now lets look at a two or three hour minimun if it's not hidden from the customer and the customer is told this up front I also feel that its a fair charge. Reason being on a productivity scale you load up and do an hours work you get done in an hour instead of four hours because you know what your doing and how to run the heck out of your tractor. Is this costing the customer or actually saving the customer money---this one is a two way street. You have charged a two hour minimun (that is what I charge) one hour actually working and one hour loading and unloading.

Now lets talk about service which this all boils down to. If you get the job done when you told the customer you would. A follow up call or stop by---this gets you alot more work in oh by the ways. Charged a reasonable fee for the work. Above all make sure that the customer is 100% happy and if he is not make sure you do what it takes to make him that way. But service above all is being able to run the tractor at its peak preformance---and what ever you have on the rear of it.----Nothing better than a customer saying---your done already wow thats great. It makes you look better (word of mouth work down the road) and it costs the customer less.

Man this is sounding like I could make a killing at runnin a tractor---Once you start adding up the little stuff it sure takes off the gross and puts a dent in the net./w3tcompact/icons/frown.gif

Depending on the work I charge between 30-80 an hour.
I tell the customer of all charges up front and the customer makes the final decision about using me to get his job done or if he is unhappy with my charges he can call someone else.
My two cents about tractorin work
Many different ways to approach it
What ever the market will bear.
Ok ok I'll shut up for now./w3tcompact/icons/smile.gif
Gordon

 

[Bird]

All this talk about charging for travel time - or not - reminds me of the '89-'90 Christmas/New Year's season when we returned to Dallas for the holidays in our travel trailer and had an ice storm and record low of 1 degree above zero. The couple in the RV next to us had their furnace quit working and he called a service company. Two men in a truck showed up in less than an hour, in spite of the icy roads, had their furnace working in less than 10 minutes, and charged $35 total. And the guy complained about the high price for a 10 minute job./w3tcompact/icons/laugh.gif/w3tcompact/icons/laugh.gif If it had been my furnace and they had charged $100, I'd have considered myself very lucky.

Bird

 

[gordon]

Guess that goes to show that sometimes you can't put a dollar value to a job at times. Here are two guys who know their way around furnances and get the job done real quick and don't charge but pocket change to help the guy out of a jam. Some people are never happy--sad but true!

I would have hated to see if those two guys didn't know squat and bumbled their way around for two hours or even three hours and charged the guy $100. Shame of it is the guy would have probably have said man those guy's sure worked hard on my furnace but finally got it going for only $100.00 out of pocket.

By the way Bird at the shop it costs $60.00 just to say hello to me plus a travel charge of $50.00 flat fee if I have to go on the road. To me like yourself $110.00 to get that furnace going I would have been happy but for $35.00 I would have tipped those guys a twenty spot each!!!

 

[Rowski]

Great post Gordon.

Time=Money

Money=Time

This is from a business veiw. If you are doing it for fun on a Sunday for a little pocket change, go for it.

As you mentioned, it all comes down the customer being happy with the finished product and paying the bill. I wouldn't even think of doing work for someone if I knew that they would put up a fuss with the bill. It's a shame that some people get upset when some one makes some money.

Derek

 

[Billc]

Fishman, this thead should give you some good info on the tractor busienss. As is common with this board you have gotten varied opinions with lots of good information.

Rowski, don't know if your statement "It's a shame that some people get upset when some one makes some money." was directed at me or at the customer griping about the bill. If it was at the customer I agree with you 100%. Have only had that happen twice. I'll never do work for them again.

I think a person has a right to make as much as they can. IMHO Bill Gates deserves every dime he makes. Don't think he or anyone else should pay one dime in taxes either. I don't think someone gets rich because they are fortunate. Being fortunate implies that they are lucky. Luck has very little to do with it. Hard work and not quiting even though you can't see the light at the end of the tunnel has everything to do with success. As my mother always told me, "Rich people are rich because they do the things rich people do. Conversely, poor people are poor because they do the things poor people do. For the most part being rich or poor is a matter of choice.

Opps, got a little off the point. Anyway, I am against trip charges and minimums because I don't like it when I get charged with them. I understand the point of why others charge thoses charges, I just don't agree. Going back to my original example, when a plummer shows up to do some work for me, I don't think I should be charged for the time he took to get there. Rather, I should be charged for the work he did. When I first retired I worked at Home Depot for a bit. The store was 30 minutes from my house. They didn't pay me for the time it took me to get to the store. My wife works for her dad two days a week. He is 1 hour away. He doesn't pay her for her commute time. To me getting to work is the workers responsibility. I would, however, be in favor of charging a doctor a "waiting fee" if I have to stay in the lobby for over 15 minutes waiting on my appointment. Anyway, that's why I don't like trip charges.

Now I understand the reason for minimums, and after reading this thread I have changed my mind and agree with y'all. Again, almost every job I've taken involved at least several hours work so its not something I thought about. Thanks for the lesson on this.

Bill Cook

 

[Rowski]

Bill,

The statement was not directed at you. It was at the gripping customer(s). The quote from you mother about rich and poor people is so very true. It would be pretty cool to charge my boss a "trip charge" to got to work!

Derek

 

[scruffy]

Back in the days when I ran a mobile auto repair business, I charged a trip charge, and waved it if the repair reached a preset minimum. Same basis when I had a TV sales/service outlet. In my current line of work, I charged 31 cents per mile for my daily transport from home to work, which was 76 miles on my last contract. Previous contract, I did not charge mileage, as it was within my 25 mile radius.
Who says you can't have your cake and eat it too? The contracts ran at 50 to 75 per hour, depending whether or not benefits were included.

 

[gordon]

Bill, you crack me up---waiting fee charged to the doctor wouldn't that be great!!!

Bill in my post I just wanted to show why I charge what I charge and how the little things add up quick. Not to say it's right or wrong but I do believe it's fair to both the customer and more importantly ME.

Now I also do jobs that are close to the house and drive the tractor, most of these are repeat customers so the minimum is waived. Then again most of these jobs are longer than a couple of hours as well. On bigger jobs that last for days it varies on how I charge. So there are many different ways to get paid. I also do alot of estimate work so all fees are figured up front of course. It's the changes that make the good money. Skidding logs is where I can charge the most per hour but alot of that comes in the winter months under the lights. I cut during the day on weekends and skid out the logs under the lights during the week. I'll do this when I can't keep up just cutting and skidding on the weekends or if the weather is bad.

The main thing to consider when doing tractor work is to add up all the small stuff and charge accordingly. Remember this if you charge to low per hour your only selling yourself short!!! Life is to short and I would like to retire at a young age so if I can't make money at it I ain't gunna do it!!! Good luck to all in tractor land and may you all have full pockets with no breakdowns!!!/w3tcompact/icons/smile.gif

 

[Billc]

Derek, yep, my mother is pretty smart. She never let me blame someone or something when things went wrong. Can't tell you how many times she said, "Quit griping about the problem, start thinking about the solution." One heck of a woman.

Gordon, cutting and skidding out logs is hard [censored] work! ESPECIALLY when working at night! And it's cold! I hope you charge a lot 'cause you deserve it.

I remember a story that goes well with this tread. There was a manufacturing plant manager that had one of his main assembly line machines go down. He called the service man, told him that his production line had stopped, and he was loosing money every second the assembly line wasn't producing. The service man came right out, looked at the problem, told the plant manager he could fix the problem right then, and it would cost $5,000. The plant manager agreed. The service man went to the broken machine, turned a screw 1/2 of a turn, and it was good as new. When he presented the plant manager with his bill, and the plant manager got very angry. He told the service man he wasn't going to pay him $5,000 for simply turning a screw 1/2 of a turn. The service man told him he wasn't being payed $5,000 for simply turning a screw 1/2 of a turn, rather he was paying him $5,000 for knowing which screw to turn and how far.

One last thing, talked to a friend last night and asked him how he charged folks for tractor work. He said with small jobs instead of minimums he charges a flat rate. He used the example of one customer who needed a pile of rock moved. He said he'd do it for $175. The customer thought his price was a little high. He asked the customer if he had any idea how long and hard it would be if the customer did the job by hand. The customer agreed to the $175. The job took about an hour and a half. This way of charging made sense to me.

Bill Cook

 

[Wingnut]

Fisherman .... I bought my L3710GST strictly for playing on my 8 acres. It's used to maintain the horse pasture, brushhog, clean off snow so my wife can get back to the barn in the winter (I walk, she uses the golf cart).
Fortunately (or un- .. depending on your point of view) I can't afford to use it to make money. My tax rate is already high enough ... so it's just a toy. (and already paid off, thank goodness ... I hate that Prt-ownership-with-bank stuff)
That said ... having done some work for others back in Alberta ... I'm a BillC point-of-view guy. I have benefited from having people do stuff for me that I felt unqualified for ... and I try and spread that joy around myself. If I recovered my fuel and supplies costs ... I was happy.
I used to have a sideline, back in Alberta, of building, fixing, and caring for PC's ... and made enough money to qualify for tax status (i.e. not having the IRS (or Canadian equivalent) disallow my expenses), My main reason for having the business was to give the poor newbies someplace to go where they weren't being gouged by the unscrupulous businesses out there. I charged enough that it wzsn't free ... but the charges were tailored to the customer ... some got charged nothing, some got charged a little ... and some "abusers" got charged full price. But I liked the fact that I could make up for the dolts that worked in the stores and gave advice like "oh, that error message means the system can't read the hard drive and your only solution is to do a full format" (I managed to recover 95% of the files anyway).

I might feel different if I had to scratch to make payments for the tractor ... but I doubt it. Guess I'd make a terrible small businessman!

too bad that common sense ain't

 

[john4nh]

Well it would definately be nice to have some of you guys around. I myself have no problem paying a person for a job well done. It would be nice to go around doing charity but I do not believe moost of us can.
Biilc brought up about hard money bidding, i would like to give whom-ever posted this thread a piece of advice. When you give a home-owner a hard bid on a job, just like was written here earlier they will come to you and say hey how about just pushing that over there.. Or while your waiting on me could dig me a trench over there? Of course I can, But the real question is are you gonna pay for it? For these reasons I have shyed away from hard money bids..The customers think that well it would only take you couple minutes, which typically is true. But what if i bust a tire, a hose or anything. That little minute would kill any amount of profit you hoped for. On big jobs I like to charge by the day. Smaller by the hour, because they know your on the clock and if they ask you for something they are paying.. Dont misunderstand me though Iam not saying be rude or discortious, Iam not. BUT YOU GOTTA RUN IT LIKE A BUSINESS, SIDE-BUSINESS OR NOT.. UNLESS YOU HAVE UNLIMITED RICHES AS OTHERS..

 

[Billc]

John, hadn't thought about that with a hard bid job. You are absolutely right. With most jobs I do the customer usually has one or two other things that need done too. When I'm working by the hour I don't mind. If I had set a firm price for a job I would mind. We'd have to renegociate the job's price. Thanks for the tip.

Bill Cook

 

[msocko3]

I've been reading this whole thread with great intrest, there must be more of a need for tractor work in other areas than in the area I live in (NE Ohio). I know a guy with a 5000 series 70 hp Deere that has a loader, rotary cutter, box scraper and other attachments. If this guy had to rely on side work to pay for his tractor he would be in deep ****, most folks around here either know someone who will do it for free, or they go out and buy what they need to do it. I would never buy a tractor counting on side work to make the payments, unless I had lots of money to throw around, or an established buisness.

 

[john4nh]

msocko3 Hey I think your absoultely correct not to buy a tractor thinking your gonna make payments with side work. For one I know a guy who convinced his wife he would do just that and never made one attempt to get work. For one thing you gotta be a go-getter it just aint gonna all come to your door. Where I live it has really been an explosive rate of growth and development.. I have no problem(knock on wood) maintaining some accounts generally just mowing for bills and the other jobs right now or going into my house. (remodeling) All though I did just get a stump-grinder. I try to broaden my area of making money to include as much as possible. I have two separate accounts where i purchase grass (sod) from at a discount. Any way to your orginal thoughts you probally live in a farming community so it sounds like, and as I stated before there are lots of subdivisons and new mini-farms going up faster then I can get around.. So theres plenty of work.. Good Luck to All