Rent To Start?

BrianHay

Happy fathers day guys. This is my first post so I will introduce myself and tell you a little about me. Name is Brian Hay and I'm from Alberta Canada. I'm 31, grew up around heavy equipment and been an operator in the industry since I was a teenager. Most of my time has been on the bigger iron doing large projects like roads, subdivisions and canals. my wife is an operator as well and travels with me. We have decided to get started on our own now and have been working on getting a Spider hoe (kaiser walking excavator). We have spent the past few months putting a great business plan together and trying to get funding in place. Our lenders love the plan and we have been conditionaly approved. They will give us 30g for startup cost (this was VERY hard to get. my ex made a real mess of my credit) but we are shy 10g in equity to get the full amount to buy the machine. I'm considering using the startup funds to rent a machine (conventional there are no spider hoes to rent) to get started. Any thoughts on this? Would I be out of line advertising for general excavating/earthmoving and then renting whatever machine the customer needs? Or would it be beter to choose a specific machine and then find work for it? Any input at all will be greaty appreciated, thanks.

Chris Johnson

I don't think I would rent, from what I've seen rental rates are almost 4 times the monthly payment for a large piece of equipment. Most equipment manufacturers have there own leasing/financing division, premium may be higher, but it can help you re-establish the credit you need, and the leasing company still holds title to the equipment till the end.

Welcome to the site, and happy Fathers Day to you as well

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Chris

ruskent

Renting cost ALOT.

My company is different then yours as excavating is not how my make money but every job has excavation.

If i need a machine for a week i will rent. If its any less then a week its cheaper to sub out.

firemike

Hey Brian,

Happy Fathers Day, and welcome.

I don't think you customer will care (or even know) where you get the equipment from, as long as you show up and do the job right. Many contractors rent equipment all the time, it doesn't make a lot of sense to have tens of thousand of dollars in a piece of equipment that you can't make a return on. We had a backhoe and small dozer, worked fine for 85% of our work, but when the situation called for it we rented bigger iron as needed.

I have downsized considerably in the last few years, but still rent equipment as needed. Just figure it into the bid. Nowdays I basically rent mini-ex's, skid-steers, and JLG lifts when needed.

It will also open up your options for a while, you won't be limited to only work a hoe could do, or stuck if a project calls for a bigger or smaller machine. When you get enough money saved you can buy the spider, and still rent other equipment as need, but at least you will have a cash reserve in the beginning while you are getting your name out there. Leasing might also be an option, as with the slow economy, I am always getting mail from dealers offering attractive rates.

I've only seen a spider once, a power company up north was setting poles with it, looked really cool.

Your wife being an operator is cool too. Nice having something like that in common. Good luck and keep us posted.

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-Mike-

BrianHay

Kaiser themselves do not offer lease options but Terex markets the Kaiser machines with their paint on it and they do. But their markup is outrageous. Its way cheaper to buy directly from Kaiser and the customer support is way better deaing with Kaiser. I tried for a lease on a good used machine I found but was denied becouse my credit is not strong enough. That was before I had the 30g startup funds in place though so maybe I would have beter luck now.

mdshunk

That's one crazy machine.
http://www.kaiser-fahrzeugtechnik.at...id=297&lang=de

BrianHay

Thanks for the welcome and words of wisdom guys. I like your way of thinking Mike. Maybe its not a bad thing that I got denied the lease/loan for the spider. Renting is expensive but like you say it will let me do a lot more with a smaller initial investment.

BrianHay

I went to the heavy construction show in Abbotford BC a couple weeks ago and met with Roger of Kaiser Canada. He let me try out the new machine he had at the show and his own personal machine in his back yard. It is by far the most amazing machine I have ever been in. Even the old one he has (84) for personal use on his acreage was a very impressive machine.

denick

Hi Brian, welcome to the E&SW forum of contractortalk.com.

Would you want to elaborate on your plan. What is you target market for work? How much work do you already have lined up? How are you set for tools and support equipment? How will you transport your machinery? Are you and your wife going to have jobs outside this work? How long is your season? How readily available are rental units through the entire season? If you could explain the situation and plan there are enough people on here who have gone through this already you could get some good advice.

We've rented machines at times since 1980 when rentals really just started. It is a very difficult thing to rent and make money.

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Nick

"Every day I remind myself that my inner and outer life are based on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received and am still receiving" Albert Einstein

BrianHay

....got quiet in here. I know there are some very knowledgeable people reading this. Good bad or indifferent I realy want to hear from you guys.

denick

Just to add to my other questions.

What would be the average length of the jobs you are looking at?

What is the chance of delay ( for any reason) on the jobs you would be doing?

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Nick

"Every day I remind myself that my inner and outer life are based on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received and am still receiving" Albert Einstein

jmic

Hi Brian, welcome to the forum. I was going to ask you a question or two but I think Denick has covered everything. That's a nice looking machine but looks pretty specialized. Is the work you have lined up in your area abundent for this type of machine? Ok while everyone is away having dinner, tell me, who's the better operator ........you or your wife ?

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___"Remember You Never Get A Second Chance To Make A First Impression"______________________
Joe

BrianHay

Thanks Denick
Well my business plan is 100% focused on the Spider so if I can't get it I have to re work everything. I have not lined up any work for a Spider yet but have done a very extensive market research. I will be the first in Alberta to offer Spider Hoe services so I don't realy want to market the machine until I know for sure I can get it. If I line work up for it and end up not being able to produce the machine in time to do it someone else will. The jobs we will focus on when we start will be the stuff noone else wants to or can do. The spider can work safely on very steep slopes, 6 feet of water and is capable of getting into very tight spaces. We will market to the ski hills, private land owners and developers. Two ski hills near us are doing some major developing and the largest mountain resort in Canada is being buit here (5 year 1.5 billion dollar project). As for renting a machine my brother has an insulating business a couple hours north of me that is doing very well. He has a very large area he works in and contacts with many commercial and residential developers. He says they are having a realy hard time finding anyone to dig for them. They are often waiting months just to get a basement dug. So that could be a good place to get started. Wife and I are both going to be working just on the business for as long as we can. If money gets to tight though there are tons of empty seats here and we will work for someone else for a while if we have to. The slow season here is between dec and feb. To start with we will be hiring someone to move the machine. For the Spider I'm considering two options for a truck. It will climb into the back of a dump truck on its own no prob. But I also was considering a single axle tractor and small end dump. I found a 96 International cabover with a realy short wheel base. I was thinking about a 22 foot end dump. Given the short wheel base of the truck it would be very maneuverable and then I can also pull a flat deck for other equipment as well as have a little bigger hauling capacity for light materials. Gravel would to heavy to fill it to capacity but on demo jobs and spring cleanup for the town the extra capacity would be great. We are starting from scratch so as of now we have no equipment.....ummm did I cover it all? lol

BrianHay

LOL I'm the beter operator now but I dunno about a year from now. I'm realy proud of how well she is doing, she is a natural. When we met she was an office type working for Microsoft so I wasn't sure how she would take to this line of work but she loves it as much as I do.
The Spider is specialized but it does good wherever you would use a track machine as well. The one I'm looking at is a ten ton machine with 132hp (new ones have 157) 18 foot digging depth and 28 foot reach. It hase five auxilary hydraulic lines for a very large range of attachments.

denick

Brian,

As I think about your situation the question I have is, do you have any experience on the Spider Machine?

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Nick

"Every day I remind myself that my inner and outer life are based on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received and am still receiving" Albert Einstein

mdshunk

Here's a crazy idea... can you borrow/rent the Kaiser rep's personal machine? Have you approached him about that? That would pretty much guarantee him the sale on the new machine when you get a little bit of cash built up.

BrianHay

No I have only got to try them out. I don't have any real experience on them but neither does anyone else. I will be the first in Alberta to have one and there is only a handful of them in all of Canada. But I don't think it will take long for me to be comfortable on it. Except for the leg movements the rest of the controls are the same as Cat. Leg movements on the machine I'm looking at are four levers on each side of you (new ones have them on the joystick). I was litte worried that the learning curve woud be large, but after trying one I was surprised how easy it was to catch onto. I'm not worried anymore. I felt very comfortable in it and it didn't take long before I was moving the legs without having to think about which lever to pull to acomplish what I wanted to do.

denick

Brian,

What work could you get tomorrow? Not an if.

Are you well known where you live?

Do you personally know GC's, PM's Builders, Officials? any one that can help you get a job tomorrow?

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Nick

"Every day I remind myself that my inner and outer life are based on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received and am still receiving" Albert Einstein

BrianHay

Nothing crazy about that idea. I'm sure he would let me if I asked him. Only problems are how far apart we are. Its 14 hours through the mountains if you only stop for gas. As well his machine is realy old. It only has two wheels with no power to them so it very sow moving, you have to pull yourself around with bucket

BrianHay

Yes I am very well known not only where I live but throughout western Canada. I have been working in the industry since I was a kid. I live in the very southwest corner of Alberta next to the BC and US borders. Until recently there realy hasn't been much happening here. Everything has been North of me so I have worked mostly camp jobs as far away as the Arctic circle. In my travels I have met a lot of people and they always remember me. I have never been the type of operator that's just there for the paycheck and don't care. I am very out going and never pass up an opportunity to learn. I pick everyones brain I meet and try to get involved with everything I can. Everyone is always trying to steal me from whoever I am working for. I personaly know several gcs, md and town foremanes, puplic works super intendents and engineers. Before I had my startup funding in place I was approched by a couple different developers here to do some digging for them so I will be talking to them again. As well I will be talking to my brothers contacts, they could likely put me to work right away. All of Alberta is realy booming right now. There is a very serious shortage of contractors everywhere. For me getting the funding is a way a bigger challenge then getting the work.