Earning money with your tractor

If a guy was to retire but wanted to stay active, can you really earn money with your tractor or TLB?
I know some of you guys are already doing that so I would like to know what kind of jobs (besides snow plowing) that you look for?
I'm guessing hooking up with a few plumbers & electricians would be good so you could do trencing for them ... but I'm not sure how hard that is to accomplish.
Once you do get the jobs how do you price them out? By the hour or by the job? Just looking for rules of thumb and how you guys do it.
TIA.

Doc said:

If a guy was to retire but wanted to stay active, can you really earn money with your tractor or TLB? I know some of you guys are already doing that so I would like to know what kind of jobs (besides snow plowing) that you look for? I'm guessing hooking up with a few plumbers & electricians would be good so you could do trencing for them ... but I'm not sure how hard that is to accomplish. Once you do get the jobs how do you price them out? By the hour or by the job? Just looking for rules of thumb and how you guys do it.
TIA.

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Well Doc... let me tell it to you straight: It's year two for me and I am still looking for those very same answers.

Dougster

Doc said:

If a guy was to retire but wanted to stay active, can you really earn money with your tractor or TLB?
I know some of you guys are already doing that so I would like to know what kind of jobs (besides snow plowing) that you look for?
I'm guessing hooking up with a few plumbers & electricians would be good so you could do trencing for them ... but I'm not sure how hard that is to accomplish.
Once you do get the jobs how do you price them out? By the hour or by the job? Just looking for rules of thumb and how you guys do it.
TIA.

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Rule of thumb on pricing;

There is NO rule of thumb on pricing..... What works for ME might not work at all for you. I've learned to be flexable. I price some work by the hour. Some by the job. Some of my mowing is done per acre. No defined hourly rates for across the board publication to customers either. I need the lattitude to adjust according to specific job details.

What makes money;

For me, it's bush hogging large acreage. There is far too much competition in the excavating/landscaping market here to want any part of that. Again, that may be completely different in your area.

Can you make money?

I'm a believer that you can make money poking yourself in the eye with a sharp stick if you can find enough people willing to pay you for the pain. You just have to watch the cost of your sharp stick, make certain your customers pay, and don't expect to get rich on the first poke.

Cover all your bases. Insurance. Administrative cost. Transportation cost. Eventual replacement of equipment. Maintenance and upkeep. Employee benefits (even if YOU'RE the only employee) Advertising. Realize what your cost of opening the doors on day one will be. Then consider if you can add a worthwhile PROFIT MARGIN to that and still remain a viable, competitive business.

There is more to LOSE than there is to gain at first. Make certain you don't fall off the horse while you're reaching for the brass ring. Proceed with caution.

It ain't easy, but it IS do-able.


OR

Get lucky and fall into a veritable gold mine like I did

So Dougster, what type of work keeps you busy the most? It might not have been an easy road but evidently you've had some successes (I hope).

FWJ, thanks for the insights. What you said kinda goes with this quote "Funny, it seems the harder I work the luckier I get". I can't think it's all luck on your part. You did some good work and it paid off for you. Congrats on that. You deserve it.

Doc,

My dad will retire this year, so last year I talked him into buying a Kubota B7800 and mower. It was pretty easy after he came out and used my L2800 for a few hours. He intends to pick up a few church yards to maintain in order to stay busy. We both believe that a sure invitation to the ol' grim reaper is to become inactive before you have to...

I think that you'd need to base your pricing on a few variables:

Competition: Undercut the competition only so much that you get the number of customers you're happy with. Don't work for free, but don't charge quite as much as the other guy. They've already established what the local market will bear...don't delineate too much or you'll either get swamped with jobs and piss off the other guys or get laughed at for your job quotes.

Networking: I pick up a few mowing jobs from guys that don't want the hassle or expense of a tractor...you know, the guys hauling the ZTRs and such. So, get connected with the guys that do lawncare for businesses that have undeveloped acreage.

Your needs: As far as my tractor business goes, I use it as a means to get a tractor payment and spending money for my toys. I don't need the income to survive...it is something I enjoy and a means to other ends. Nothing in the tax code says that you must make a killing to take advantage of the tax breaks that a small business brings.

If you take all this into consideration, you'll work out a good price for your labor.

Good luck!

Farmwithjunk said:

It ain't easy, but it IS do-able. OR Get lucky and fall into a veritable gold mine like I did

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It's clear that from a pure money-making viewpoint, any sort of on-going/repetitive land maintenance work has it all over doing one-off projects. Dan (a.k.a., workinallthetime) and Junk (a.k.a., FarmsWithClassics&Antiques) are clear examples of the financial success that can be achieved with those kinds of businesses.

Unfortunately for me, the idea of maintaining lawns and pastures holds no personal appeal at all. A project has to actually interest and challenge me at some level or I see no point in pursuing it. If it were only about the money, I'd be back in another jail cell office doing mechanical engineering work again in a heartbeat.

On the other hand, I need to advertise heavily ($$$), pay a staggering amount of money for grading & excavation liability insurance... and then fight tooth and nail for every single viable job. While I may be getting some job satisfaction, much lower job stress and an improvement in my overall health... the money is not exactly rolling in.

I fell far short of my 2007 goals. I have lowered my revenue expectations for 2008 and plan more... and more effective... advertising this year. Still, I may not make it past Thanksgiving 2008 without heading back to another one of those hideous office jail cells I despise so much.

Man does not live by job satisfaction alone. Go into any Starbucks and see what you can buy with job satisfaction, lower job stress and $1.57 (net) per working hour.

Dougster

mobilus said:

Doc,

Your needs: As far as my tractor business goes, I use it as a means to get a tractor payment and spending money for my toys. I don't need the income to survive...it is something I enjoy and a means to other ends. Nothing in the tax code says that you must make a killing to take advantage of the tax breaks that a small business brings.

If you take all this into consideration, you'll work out a good price for your labor.

Good luck!

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I'm over 5 years from doing something like that, but I gots to plan. And the TLB talk got me wanting a TLB even more than I did before. I wouldn't need to make a living at it. I'm thinking if I could pay the TLB payment and get time to play with the hoe I'd be happy.
I also agree with the staying active mentality. I do think it is much better for you ...keeps you from rusting.

But ... with a TLB I was hoping for more hoe work. Maybe that is harder to get nowdays. I'm just trying to justify the hoe for me to play with on my place. Instead of a TLB I now would also consider a little excavator. In another thread someone helped show the advantages of those over a TLB. So, I'm all over the board right now because I can. Just something I'm considering and I knew you guys could shed some light on it for me.
Thanks to all!!!!

Doc said:

So Dougster, what type of work keeps you busy the most? It might not have been an easy road but evidently you've had some successes (I hope).

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Some success for sure... but not nearly enough to pay the bills steadily.

My biggest mistake last year was in advertising. I choose the wrong place to put my advertising money. I'll leave it at that. I am in the process of correcting that huge... perhaps ultimately fatal... mistake as we speak.

My market is nearly 100% do-it-yourself homeowners... helping them with my tractor, backhoe and dump trailer to complete their various specialty and property improvement projects... some big, some small. I try to fit in between the capabilities of lawn maintenance companies and limited-capability landscape contractors... and full-blown excavation contractors. I position and represent myself as the "guy for you (i.e., homeowners) to call when you don't know who to call." I believe that one line sums up my business better than anything else I could say.

I never did crack the small contractor/small re-developer market and I don't think that's going to happen this year either. It is highly cut-throat and mostly just a complete waste of my time. Even when I give out lowball, money-losing bids... I am still turned down. I've explored possible reasons for this with several friends and business consultants. To make a long story short, my high-end, value-added, homeowner-targeting business model just does not seem to appeal to contractors who want cheap, fast, quiet and gone. Licenses and insurance??? What are those???

Doc said:

FWJ, thanks for the insights. What you said kinda goes with this quote "Funny, it seems the harder I work the luckier I get". I can't think it's all luck on your part. You did some good work and it paid off for you. Congrats on that. You deserve it.

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Don't encourage the Junk like that! It only makes him tougher to deal with!

Dougster

Speaking of advertising, what is best? If you are looking for work with local contractors do you advertise in the local buy sell and trade paper, or do a direct mailing? I've had my best luck with direct mailings then following up with a phone call (but that was for a completely different line of busiiness).
I would also be on the lookout for new businesses that don't have all their connections yet and try to get in with them. I would prefer contractor work to working for home owners. I'm sure it's harder to get, but once you get it, they do the advertising and get the jobs. You just take the call from them, show up and do the work. Maybe I'm dreaming though. All speculation so far.

Doc said:

Speaking of advertising, what is best? If you are looking for work with local contractors do you advertise in the local buy sell and trade paper, or do a direct mailing? I've had my best luck with direct mailings then following up with a phone call (but that was for a completely different line of busiiness).
I would also be on the lookout for new businesses that don't have all their connections yet and try to get in with them. I would prefer contractor work to working for home owners. I'm sure it's harder to get, but once you get it, they do the advertising and get the jobs. You just take the call from them, show up and do the work. Maybe I'm dreaming though. All speculation so far.

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You need to go back to the roots of my business (i.e., the Florida hurricane recovery work) to understand my business model and why the appeal to (and targeting of) homeowners. This is a rather personal decision for me far more than an intelligent & logical business decision.

Advertising will all depend on the particulars of your local market. What works great in one location is useless in another. My big-dollar advertising "worked", but the majority of calls for quotations came from outside my competitive geographical range and were ultimately useless to me. Yes, my bad. I blew it bigtime. At least I know what I did wrong and am aggressively working to correct that mistake as we speak!!!

Dougster

Doc, hand out business cards like crazy. Not just one, but three orfour to everyone that you think can come in contact with future clients. I have gotten most of my jobs this way. Word-of-mouth, coupled with a business card passed on by a satisfied customer, has proven to be the best advertising route for me.

I also put cards and flyers (in bright colors, yellow, green, or orange) up on the boards in the local Tractor Supply and Atwoods farm stores.

I think I'll try to break into the oil field business soon. Most of the tanker drivers are driving pretty, expensive rigs and don't like to get them scratch up going down long-overgrown trails. With the increase in crude oil prices, they're opening up old well sites all over. So, putting a handful of cards in the oilfield supply stores would be my advertising.

If I were trying to make a living at it like Dougster, I'd do all the above and put ads in the paper. Oh, Doug, how about a website? Nothing fancy. And use Craigslist...they have a free small biz ad section. I have gotten a few calls from that.

Good luck.

mobilus said:

As far as my tractor business goes, I use it as a means to get a tractor payment and spending money for my toys. I don't need the income to survive...it is something I enjoy and a means to other ends. Nothing in the tax code says that you must make a killing to take advantage of the tax breaks that a small business brings.

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This is a far more realistic and achievable view of post-retirement compact tractor and TLB work. This does not push the envelope, drain you with high advertising and insurance costs... or leave you depending on it to meet your everyday financial obligations. If you can treat it as a hobby that happens to pay for itself and give you some tax advantages as well... you've done it right!

Dougster

Thanks, Dougster...

I resemble that remark.

mobilus said:

Doc, hand out business cards like crazy. Not just one, but three orfour to everyone that you think can come in contact with future clients. I have gotten most of my jobs this way. Word-of-mouth, coupled with a business card passed on by a satisfied customer, has proven to be the best advertising route for me.

I also put cards and flyers (in bright colors, yellow, green, or orange) up on the boards in the local Tractor Supply and Atwoods farm stores.

I think I'll try to break into the oil field business soon. Most of the tanker drivers are driving pretty, expensive rigs and don't like to get them scratch up going down long-overgrown trails. With the increase in crude oil prices, they're opening up old well sites all over. So, putting a handful of cards in the oilfield supply stores would be my advertising.

If I were trying to make a living at it like Dougster, I'd do all the above and put ads in the paper. Oh, Doug, how about a website? Nothing fancy. And use Craigslist...they have a free small biz ad section. I have gotten a few calls from that.

Good luck.

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All very good advice! And I sure wish we had some of them oil fields up here in Taxachusetts!!! Sounds like a wonderful opportunity with crude between $90-$100 per barrel.

I do hand out and post my very colorful business cards. There are not a lot of boards we can use up here without paying a fee, but I think I've got all of the free ones covered. Only recently has our local post office stopped tearing down and throwing away private business cards. I believe that's already helped me.

Only in snowplowing have I had some client-to-neighbor references lead to new business. It is very tough in the tractor and backhoe area where one-off projects are few and far between.

Sadly, my suburban residential zoning prevents me from having a posted sign. I'm not even supposed to have one on my truck, but I use a magnetic sign during snowplowing season only. Not sure if it has hurt or helped. For similar reasons, I have not done fliers or door-to-door selling.

The worst advertising problem I've got (after last year's very stupid decision) is that we don't have a little free town or area classified publication like most towns have. We have a free weekly community newspaper, but it is extremely costly to advertise in and... rather amazingly... most of the actual ads end up appearing in sister newspapers given away well outside my geographical area.

Dougster

Doug, you sound like a good candidate to become a "damn Yankee", and move on down here to Texas. Sure, it might not be as pretty, but we sure don't put up with as much B.S. as you do up there...

They might prevent you from placing a sign on your truck, but they can't tell you what to wear (can they?). Have some caps and shirts stitched with your business name and phone number on them. I was in Bass Pro Shops in Dallas awhile back and picked up one of their caps...and promptly put it back. If you wear caps, why pay someone to advertise for them? Pay a few more bucks to have your own advertising and wear it everywhere.

And don't give them away, unless to a big customer. I never understood cap collectors...they're the scourge of advertising on caps.

mobilus said:

Doug, you sound like a good candidate to become a "damn Yankee", and move on down here to Texas. Sure, it might not be as pretty, but we sure don't put up with as much B.S. as you do up there...

They might prevent you from placing a sign on your truck, but they can't tell you what to wear (can they?). Have some caps and shirts stitched with your business name and phone number on them. I was in Bass Pro Shops in Dallas awhile back and picked up one of their caps...and promptly put it back. If you wear caps, why pay someone to advertise for them? Pay a few more bucks to have your own advertising and wear it everywhere.

And don't give them away, unless to a big customer. I never understood cap collectors...they're the scourge of advertising on caps.

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You are too funny! The fact is that I did have a sample baseball-style cap made up with my company's name and logo on it. I wore it a few times, but really didn't like the particular hat style... and the company name ended up kinda hard to read. I dropped the idea and went on to other things. I will re-visit the shirt deal in the spring.

For now, that one company hat is considered a collector's item!!!

Dougster

I dont have any personal experience apart from the odd job (not a business) but a friend of mine recently started up in the excavating/odd job business.

He has found alot of word just through word of mouth, last I spoke to him he has work lined up at 4 houses in a row, one had hired him, then the next had come to speak to him about some work, and then the next....

I dont think you'll ever match the speed of a mini-excavator for trenching, but mini-excs cant load unlike a TLB. Driveways might be a good one to go for, or landscaping around new homes.

I think the hardest thing is finding customers that realize the costs involved, and are willing to pay the price. I've been asked about doing a couple of jobs with my TLB (very small, so it'll fit some places you couldn't get a normal size one) but for what they want to pay me, its cheaper to stay at home.

Mith said:

I think the hardest thing is finding customers that realize the costs involved, and are willing to pay the price. I've been asked about doing a couple of jobs with my TLB (very small, so it'll fit some places you couldn't get a normal size one) but for what they want to pay me, its cheaper to stay at home.

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It's funny Mith. You'll quote one job and the homeowner thinks it's highway robbery. You'll quote the next guy an identical price for identical work... and the guy looks at you quizzically and says: "That's all"???

Sometimes ya just can't win!

Dougster

Doc said:

I would prefer contractor work ... once you get it, they do the advertising and get the jobs. You just take the call from them, show up and do the work.

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Doc, I spent many hours in the offices of earthmoving subcontractors, auditing to verify that they had real payroll and equipment lease costs to support time n materials billed to a Large Government Agency. (The successful subs all checked out ok. On a few of them we recovered unsupportable claimed 'costs' from the prime contractor then he went and had a talk with his sub). ALL of these subcontractors without exception told me the prime defines what he is going to pay for earthmoving when he prepares his original job bid, then when its time to do the work he shops it around until he finds a hungry sub willing to complete the specified task for near nothing. The sub is never asked to prepare a bid, he is offered take it or leave it terms with an inference he won't be invited next time if he doesn't go along.

I saw many instances where the prime contractor bid a contract item at a huge profit then had a sub perform that same contract item for far less - and of course he kept the difference. I recall one instance of emergency work, a flood or earthquake or something, where the contractor was paid a huge premium to get the infrastructure back in operation as quickly a possible. The subcontractor qualified to share in the huge bonus but I couldn't persuade him to claim his share from the prime, he said he would never get a contract again if he did. I had to get our contract attorneys to interpret ambiguous wording in that emergency contract. They ruled that the prime could keep the entire bonus for himself, he had no obligation to incur a cost for paying the bonus to the sub in order to qualify to receive it.

Your plan may work with mom and pop contractors but I expect larger ones run on the model I've described here.

A point I think I learned from the State's study guide for my contractor's license: bidding a job, include your own labor at journeyman, foreman etc rates, fully loaded with all benefits costs. Then don't forget the part that has buried so many wannabe contractors: add yourself in again for an entrepreneur's profit on top of the standard costs. Beginners don't think to do that, so they never prosper and accumulate capital. Years later they're as poor as when they started. The whole point of running a business as I see it, is to accumulate savings because your income exceeds your cost of operation.

If you don't have the profit margin in addition to your own wages and benefits fully covered, then running the business, the managerial side, is just a nonprofit hobby.