How to Start a Skid Steer Business in 5 Easy Steps
Many of us dream about running our own business. Be your boss? Get paid directly for your hard work? Who wouldn't want that?
Heavy equipment operators have a unique area of expertise that allows them to take charge of their day-to-day should they take the initiative to start their operations.
Skid steer loaders are a versatile piece of equipment that provides endless opportunities to turn a profit. Skid steer work is always in demand for commercial and residential construction and landscaping projects.
Keep in mind, that running your own skid steer business is a lot of hard work, but you don't need a ton of money to get started (especially if you buy your first skid steer used) and you can pace your growth in proportion to your team's capacity as the operation sustainably expands.
Now, here's what you need to know.
Step 1: Get to Know Skid Steers - Make Yourself an Expert
Do you know how to start a Bobcat without a code? What about the best degreaser for heavy equipment? These are must-knows for skid steer owners and operators.
If you don't take the time to make yourself an expert skid steer operator, you'll find yourself losing out on valuable business opportunities, making costly mistakes on the job site, and losing profit to expensive (preventable) repairs. You want to know how to turn out high-quality work safely and efficiently so that clients think of you as their go-to.
Read More: How to Become A Heavy Equipment Operator
There are numerous avenues to learn about skid steers generally. A combination of all of these methods is the most fruitful approach:
Network with skid steer operators
Take a class or training course dedicated to skid steers and heavy equipment businesses
Get first-hand, on-the-job site training
A blend of these skill-boosting initiatives will help you avoid lessons learned the hard way and to spot profitable opportunities others might miss.
Step 2: Time to Talk Money - Make A Business Plan
If you don't sit down to map out a game plan you're business is prepped to fail from the start. One of the biggest mistakes new business owners make is over-spending, assuming that "it takes money to make money" is the right approach to every business problem. Remember:
Income = Revenue - Expenses
Take the time to plan, set clear goals, and create a detailed budget that accounts for all the curveballs you might stumble into. Most new businesses don't break even until at least three years. How will you survive until then? And what can you do to cut costs on less important expenses so that you can invest in quality where it counts?
Just a few startup costs to anticipate:
Business incorporation, licenses, and permits
Professional services (e.g., accountants and attorneys)
Heavy equipment and various attachments (consider leasing or financing)
Safety requirements such as PPE for team members
Fuel and maintenance costs
Transportation and storage expenses
Taxes
And when you're making your five-year plan, don't forget that things like depreciation and maintenance costs are inevitable -- so plan for them now.
Pick the right price point for your startup's services.
In the early days of your starting your own business, it is important to price your services at an amount that conveys that you do high-quality work while also incentivizing new (potential repeat) customers. As you prove yourself, you can continue to lose the deals and increase your prices. This is a balancing act that takes some market research to perfect, which is where having made yourself an expert on skid steers will pay dividends now.
There is an excellent book called The Lean Startup by Eric Ries that can help navigate the tightrope walk between startup expenses and new business pricing.
Step 3: Make it Legit - Incorporation, Insurance, and Business Banking
This is where it gets real.
All of the planning and preparation now leads to taking action. The first thing you need to do is to form your business foundations. These are the steps that separate the business from you as an individual. This is also where the team of ace professionals you budgeted for enter the scene.
Most heavy equipment operators choose to form their company as a Limited Liability Company (or "LLC") because it is relatively easy and low-cost to maintain and also limits the amount that you as the business owner can be personally held liable should someone decide to sue over the work or a job-related injury. You'll want to run the type of business you want to create past an attorney because heavy equipment operation is a naturally high-risk business.
Speaking of liability, business insurance is essential for those running a business built on construction equipment. You won't be able to get quality insurance until you can provide documentation that your business has all the proper licensing and registrations, such as a contractor's license. (These types of licenses also help you to build trust in new customers and get better business loan rates).
Some common types of insurance include:
General Liability Insurance
Property & Equipment Insurance (Skid Steer Insurance etc.)
Workers’ Compensation
Business Auto Insurance
Umbrella Liability Insurance
Another important part of separating yourself as an individual from the business operation is to separate your personal and business finances. Generally speaking, you don't want to "pierce the corporate veil" when it comes to mingling your money. Skid steer income and expenses should all flow through the business bank account. Make it clear when you are paying yourself out for services rendered and when you are making a capital contribution to grow your company. A quality bookkeeper or bookkeeping software can make all the difference here.
Step 4: The Fun Part - Rent or Buy A Skid Steer Used or New
Now it's time to get to the good stuff: rent or buy a skid steer loader. A high-quality skid steer is the backbone of your business model so take the time to research which models have a reputation for a long lifespan, low maintenance costs, and user satisfaction.
You will also want to consider:
How and where you will store your skid steers
The various jobs your skid steers will need to be able to handle
Smaller skid steers offer a compact size that is less expensive to store and transport, while large skid steers offer the ability to lift heavier loads. How much will your skid steer weigh?
Keep in mind that compact track loaders can offer a happy medium frame that has the power of larger models and the ability to fit in tight spaces like a small frame skid steer.
Read More: How Much Does A Skid Steer Weigh?
Popular skid steers and compact track loader options among business owners are:
Once you've chosen your skid steer setup, it's time to consider the different attachments needed to complete jobs. The answer depends on whether you are doing excavation work, farm work, construction and landscaping projects, or other tasks.
Also ask yourself whether you want to rent or buy other construction vehicles, like a truck and trailer, for transporting equipment between job sites.
You can shop skid steers and skid steer attachments right here at Boom & Bucket with financing options available to ease your startup costs. We have a wide selection of small frame skid steer options and large skid steers and a team waiting to help you make a smart choice at support@boomandbucket.com.
Read More: How to Find the Best Used Skid Steer for Sale
Step 5: Get Out There - Land Jobs and Build a Loyal Customer Base
Here is where the hustle comes in. You can have the best skid steer on the market, but it won't turn you a profit if you don't build valuable customer relationships.
The first place to start is to create a basic, low-cost website where potential customers in your area can easily find out that you exist. It should be simple and professional -- you're a construction company, not a tech startup so don't break the bank and drive up overhead expenses on a website. It should let people know how to reach you, the types of services you offer, photos of your work, and customer testimonials.
Next, reach out to your existing relationships to let them know your new skid steer business exists. Even if they do not become customers themselves right away, they will spread the word with word of mouth being the most impactful approach to growing a business.
After flipping through your Rolodex, it's time to start shaking hands with a site superintendent, general contractor, or foreman at each job site in your region who can direct you toward the decision-makers they work with. This is also where a professional-looking website will come into play: a company's website is the first place people go to check out how legit a new service provider is.
Now for the most important part: DO GOOD WORK!
Poor quality work product will send your skid steer operation to a screeching halt. Do not let your company get a reputation for sloppy work, unreliable in scheduling, or difficult to work with on a human-to-human level. When you receive positive feedback, ask the customer to leave a positive review on Google or on your company website to help build trust in other potential clients.
Now What? Maintain!
Maintain those new customer relationships, and just as importantly, make sure to maintain your skid steers.
Construction equipment gets put through the wringer completing heavy-duty tasks daily. These machines face all the elements: extreme temperatures, rain and snow, scorching sun, dust, dirt, uneven terrain, and so much more.
You can save yourself a ton of money through regular preventive maintenance. If you wait until your machines need a full-blown repair, you may have to pause your income stream jobs while paying hefty sums to fix your equipment. It also makes going to work every day much less stressful if you can operate your machine with ease.
Follow the equipment manufacturer’s recommendations on what services to perform at specific hour-meter intervals and you constantly stay ahead of potential breakdowns.
In addition to following manufacturer guidelines, make sure to conduct a daily walk-around inspection of your piece of equipment and flag any items that require work. Inspect your skid steer loaders' tyres, but you don't have to reinvent the wheel. There are tons of skid steer inspection form templates ready for use online.
Maintenance work may not be a blast, but it is critical to preventing costly repairs and missing out on valuable jobs.
Read More: 10 Common Skid Steer Issues
Here's a two-column table summarizing the steps outlined in the article "How to Start a Skid Steer Business in 5 Easy Steps":
This table provides a condensed summary of the five steps outlined in the article for starting a skid steer business, including becoming an expert operator, financial planning, legal considerations, equipment acquisition, and customer acquisition strategies.
Good Luck - We're Here to Help!
Skid steers offer an incredible opportunity to flex your entrepreneurial muscles and start your own business. A construction service company gives you the freedom to set your schedule and enjoy the direct results of your hard work.
You can buy equipment to start your skid steer business right here at Boom & Bucket. We have small-frame skid steers, medium-frame skid steers, and larger models for you to peruse.
We can't wait to watch your business grow! If you need assistance selecting the best skid steers, compact track loaders, and available attachments for your specific needs, don't hesitate to reach out to us directly at support@boomandbucket.com. We're here to help!
Visit Boom & Bucket to buy and sell your machinery.