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Discussion Starter · #1 ·
Hello. I'm new to the site but see their are plenty of helpful contractors with a lot of knowledge. I have worked in excavating for about 15 years. I would like to start my own small excavating business on my own with no employees for now. I have a few questions and would be very happy with your feedback. Is it worth talking to a lawyer before getting started? Is it better to be an LLC or just use social security? What permits do I need and when do I have to contact environmental services? What information do you need for a legal contract? How much are you allowed to get down before work starts? Do I have to have a PA1 or a call before dig service every job? I have experience in the seat but obviously just learning behind the desk. Thank you in advance for your feedback and information.:thumbup:
 

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An a s corp will give you a bit better protection liability wise. To set mine up I basically filled out the forms from the Secretary of State and sent them their fee of 90 bucks at the time and I had a corporation. I didn't need to get any lawyers for that. It was pretty easy.

Find a good accountant I have one that knows the same accounting software as I use so I can sent her periodic a file occasionally and she can see if we need to up our taxes or buy something at the end of the year etc.
 

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Step One: Find your first client.
Everything else you can put into place pretty rapidly (LLC, insurance, license, etc.) If you don't have at least one client willing to hire you the 'everything else' doesn't matter.
 

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Also you will never go out of business bidding too high. You may not have much work. But you won't have risk either
I don't agree with that at all. You can go out of business bidding too high or too low. Know your expenses, overhead & % of profit you want to make & stick to that.

Too many guys bid on a curve. Low bids when they have little or no work & higher bids when they have plenty of work. I always try to stay consistent.
 

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The point is that if you bid too high and you don't get the work you don't have risk. I do mostly utility work. Water and sewer. If you bid too low and miss dewatering or too many utilities in the way and you hurry to make time and you rip out a fiber optic. It would have been better to be too high and not have the risk
 

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Stud
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HUI,

I know what you're saying but if you know your costs and the info is there then dewatering is a cost that you would have accounted for. Also, since I mainly do residential work I always have a list of contingencies that are not covered (water, ledge, etc.) if there is not info calling those issues on plans.

I understand it is different on municipal work where low bid wins. I never understood how guys will approach high water table jobs and not account properly for them. Of course, that's why I steer clear of that type of work. I don't think I would ever get low bid. especially now a days.
 

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In my neck of the woods, you can have a 1000' of dry digging, then hit a 1000' stretch where you have a 6" thick sand lens down 4' that water pours out of. I'm of the opinion that underground contractors deal with far more variables than other types of construction.
 

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I would agree that the underground side of construction has the most variables. The worst part is your dealing with an engineer that has a spec book thicker than the bible. And the engineer that fresh out of college and knows everything. Oh and of course it is always contractors responsibility.

Also with costs so high you miss something or have a delay where your employees are on site getting paid waiting on an answer from the engineer can really hurt. For example i just bid a directional drilling project that operator were making 68 bucks an hour and laboratory were 50 something an hour. Good old union scale for a freaking concession stand at a school.
 

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You may also need a home improvement license to enter into residential contracts with homeowners, check with the state. Even the excavators and driveway guys in md need one to do dirt work for ho's.
 

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Discussion Starter · #18 ·
Do you guys use a clause for rock, dewatering, no maintenance, etc. Bid switch to hourly when you get into unsuitable conditions?:thumbup:
 

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Yes, put conditions in your bids. Rock, dewater and anything out of your control as long as you take the correct steps to avoid them. You can get a list together for t&m stuff for things above contract or do change orders.
 
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