Cost of Operation for one-man forestry mulching operation

[Tones]

A one machine business won't sustain 2 wages (yours and operators) so it comes down to doing EVERYTHING yourself, finding work, fixing and cleaning machine and operating it. Having a wife or partner who is sympathetic to your cause is a huge plus.
I have been in the mulching game for over 12 years and it's one of the hardest jobs I have ever done and at times the most rewarding. But Boy Oh Boy some days you wonder why you got outa bed. Ive smashed bearings and bearing housings, bent rotors (2), had hydraulic pump fail at less than 1900 hours. Then there,s track wear, rubber or steel,( Iv'e owned both). belts tearing, idler failures etc,etc. I consider myself to be a careful operator but in the mulching game the unknowns on the ground are huge, old truck and tractor parts, farm equipment are all fair game and they usually win, It's like they wait to ambush you and are never seen when you look at the job.
Hummed I'm not trying to put you off buying or renting mulching equipment but to make you awear it's not all beer and skittles and business plans can be blown up in seconds.

 

[Hummed46]

Tones,
I appreciate that. It must be worth it for you if you do it? What's the best and worst parts? If you could do it over what would you do different? What areas would you focus on, and what type of work is your ideal job? Thanks for the input!

A one machine business won't sustain 2 wages (yours and operators) so it comes down to doing EVERYTHING yourself, finding work, fixing and cleaning machine and operating it. Having a wife or partner who is sympathetic to your cause is a huge plus.
I have been in the mulching game for over 12 years and it's one of the hardest jobs I have ever done and at times the most rewarding. But Boy Oh Boy some days you wonder why you got outa bed. Ive smashed bearings and bearing housings, bent rotors (2), had hydraulic pump fail at less than 1900 hours. Then there,s track wear, rubber or steel,( Iv'e owned both). belts tearing, idler failures etc,etc. I consider myself to be a careful operator but in the mulching game the unknowns on the ground are huge, old truck and tractor parts, farm equipment are all fair game and they usually win, It's like they wait to ambush you and are never seen when you look at the job.
Hummed I'm not trying to put you off buying or renting mulching equipment but to make you awear it's not all beer and skittles and business plans can be blown up in seconds.

 

[Tones]

ROW work has been a good earner even though there's alot of hoops to jump through over here. Doing ROW work you are working in areas that have all ready been cleared and for the most part are clear of junk. Looking back the biggest mistake was buying a new piece of junk and hopping that every time it broke down it would be the last. I should have sent it back and spent the repair money on lawyers.
The best is having new client with a new to them lump of dirt that needs clearing and in their eyes looks impossible. I then go in and under state the quality and over state the price and do the opposite. That way the money is always on the gate post and someone else is advertising my business. I love the look on their faces when they see for the first time the land they have purchased.

 

[Hummed46]

Thats awesome...that would be a very cool feeling I imagine. I had a taste of that on one of the house flips I did...I used the same agent for the buy and sell side, and very much enjoyed the look on his face when he saw how the place turned out...I would love to see that on the scale you work on.

How did you get into ROW clearing? Is it maintenance, or the initial clearing that you do? If maintenance, how often do utilities need that work? Assuming here it's every couple years. Do they also ask for herbicide application?

 

[Tones]

Here in Australia ROW maintenance clearing is a hard nut to crack and is let out to a contractor for set areas. Contract period is usually 3 years with the mulching taking about 1 year. I don't do tree work and leave that to others, the main reasons are that I don't have employees, don't have the experience and the public liability premiums treble + I'm to bloody old. Everything you do here requires a ticket of some sort, spraying, chainsaw close access tree trimming, first aid etc etc. I really like KISS.
Some job pics on Facebook, CTC Mulching

 

[Georgia Iron]

Lots of good info in here from guys that know. Most men that own and use these machines have a higher level of skill than an ordinary worker. It takes a lot of common sense and learing the hard way, - not to over do what your equipment is capable of.. Normally getting things stuck, breaking any and everything sometimes every day you use it. I hired a guy that owned a dump truck and a skid steer to help me and guess what. The first day in my truck while I was in the loader he came with in a hairs breath of rolling my truck or just bending the dump cylinders. HE got pissed because I screamed for him to STOP... DONT MOVE THE LOAD UP OR DOWN STOP.. Dont scream at me he says I know what I am doing Get the hell out of my truck or shut up and do it my way...

I would never ever buy this type machinery for the large amounts of money you are considering spending just stepping into this. IF your experience level is what I read as in none, I would bet you $1000.00 up front that you will not be able to turn a profit and it will cost you to own it.

It takes learning the equipment and growing into the equipment. It takes years and years to get to the level you are considering and it also takes the ability to preform all the tasks that go along with it. Most dont have it all down. They might be able to sit in the seat but they cant fix it... This means you will need a mechanic and he will be your new best friend and you will just need to start an account with him.... You will also have to wait for him to show up which will slow down your profit making abilities. And rain and machines dont like to mix and you will loose more time and it goes on... And the guys that really make it dont do this 8 hours a day, the day goes on until you are ready for the next day.. Like it could be a 16 hour day or you miss the next days work and so on... And if you get serious you get a backup for all the trucks and machines to not miss work and to pull you out and to recover the broken bits ... and then you cant sleep because the back up is now on the front line.. every lost hour is one you dont get back ..

As in providing any useful information for your pricing.. What happens when a 20k repair hits and it will. I am looking at 2 15k under carriage jobs i need right now... And you say let me get a few more hours out of this garbage because it is all garbage and it all wears out and it all breaks and even the paint wears off.. to shiny steel that is then eaten by rust..
I am good with numbers but I could not put down a spread sheet with any value to it. It is just a guess. And there will be so many hours spent by someone other than you, moving the machine, fueling the machine, greasing the machine, fixing the machine, finding parts for the machine, crying about the machine ( well maybe only in my case) cussing the machine and then wondering where is the next job and when... and then wondering when can I get a month off to catch up on every thing that goes into running the machine...

But when it all comes together it can and does make money but I would guess 30 to 40 dollars an hour for machine operating cost and that is if you fix it yourself.... and that is not even for a mulching machine that thing must run at WOT and it is just waiting to break itself...

 

[ianjoub]

So, one more question:

You weren't interested in the diversity that a skid steer provides. You want to focus on mulching. Why are you planning to buy a skid steer and mulcher head? Why don't you just buy a forestry mulcher?

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[ianjoub]

Doesn't need to be that big ^^^^^^^^^^^^^^^:

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[AzIron]

lots of really good info here

where i live you will never see a mulching head there is no use for them so take this opinion for what it cost you.
your going to need to be busyier than 500 hours your first year or you wont break even especially if you hire a mechanic for breakdowns. you need to look at some kind of diversity as far as skid steer work outside of mulching that will help with cash flow and if you think mulching is a big market i bet doing small cleanup or other skid steer type work is even more abundant, its not full time just enough to make ends meet.

by the end of your second full year in you will be doing well if your making wage for yourself or a little better. these type of business is not for the faint of heart and you have to be prepared for a major set back maybe 2 or 3 in a row. its like crane op said its not that your going to make more money working for yourself over working for someone else its the long game your playing that 15 years down the road you have something to show for it. 10 hour days will be your normal. You will also need tools a compressor all the support stuff somewhere to store everything when its not used, it all adds up really fast.

when it comes to spread sheets and projections assumptions and speculation until you personally have some miles under you to answer those questions it wont be accurate for your operation. as my dad has always told me figures always lie and liars always figure. its a great target but dont take that spread sheet as gospel truth. i use excel to figure hourly break down for expenses but i am always updating the history of it. as for as billing and getting paid whats your plan to charge by the hour by the acre or by the job will the money be up front upon completion or net 30 and what happens when someone is 2 weeks or a month late paying you or doesnt pay you at all can you afford that (and it will happen) can you afford to hold 2 months worth of operating expenses with out money coming in.

also one other thing to consider is travel time to and from jobs and mob costs as well as what you will be using to haul your equipment with the big skid steers are not light and if you have one or 2 attachments you can end up overweight or needing a cdl and that creates another area of attention

i have 2 backhoes out everyday and a miniex part time if we run 5 days a week i have to work 6 just to service and thats not because anything broke thats just to b ready for the next week 10 to 14 hours a day is the norm for us. and i will say this if i didnt do most of my own wrenching i couldn't afford to be in business and i have almost as much money in trucks trailers tools and the shop type stuff as i do backhoes

 

[catwelder]

in my area a guy does this his been doing it for two years. out of the two years he has had 5 months without work and it dint look good for him but through some miracle he was able to pull through just bought a new excavator also. one way you can do this is take on a partner and both of you work it when you can that way you do it 50/50 you can keep it busy plus if you start they can buy into your company and give you some sort of capital.

 

[Hummed46]

Hey guys,

Thanks for all the replies...been very busy with a number of things so haven't had a chance to check the website, and for some reason I stopped getting notifications to my email that the thread had been updated.

Georgia Iron...It's just a machine. Skill required yes, but not rocket science. I've been running skid steers for about 5 years helping out around the in-laws business. Not perfect, but not bad. Can't be any harder than landing a jet on an aircraft carrier and I have just a little experience doing that, so I'm not too concerned about the operating part. Re: Operating costs...At 5gph fuel consumption looking at $18/hr in diesel alone. The all-in cost I figured for fixed and variable costs per hour of operation is about $100/hr in year two. Higher if renting in year 1.

Mechanics...Been rebuilding engines my whole life, wrench on all my vehicles, and my best friend's been a Cat mechanic and welder for 14 years and we've already worked out a deal. Could I turn wrenches in a pinch? Sure. But I have a couple options there.

AzIron...Great advice, thanks for that. No matter which way you slice it you need a CDL A for these machines...Trailer's used for commercial purposes and it's more than 10k pounds so a CDL A is required. T770 comes in at 10.5k without attachment alone. No way around that one. I need a CDL, and anyone driving the truck/trailer needs one too.

Ianjoub...I've been thinking more and more about other uses. There are a lot of fence companies around me. A 12" hi-flow auger would do some work! I've used the std flow augers and you can drill some holes with those. Possible to partner/sub out to them for the holes if they dont already have machinery, or market to homeowners wh owant to do their own fences to save money (which is what I did with my 700' of split rail). Father-in-law's trucking company has a few commercial snow accounts and looking to expand, so there might be space for a snow blower attachment for the smaller commercial lots. The other factor is price...The large frame CTLs with attachments are just less expensive than the purpose built forestry mulchers. I can throw a stump grinder on there and make a few bucks as a value-add service for residential customers. I'm warming to the idea of being more flexible although I still think its important for a business to really focus on one core product line initially. Better to be known as THE guy in the area for at least one thing before splitting off and being that guy that does a little of everything somewhat decent.

Catwelder...I found an owner/operator that got sick of the business, sold all his stuff, and works for a golf course now doing their maintenance on the course with their own machines. We talked a lot, and I think if I did it I would partner with him. He offered to work a couple days a week for $23/hr. Doesn't want too much because he likes his free time but he used to work for a land clearing company before buying his own stuff, has a CDL, and knows how tough it is to keep machinery running. If I partnered with anyone, it would be paying him for his experience on the operations side. Mutually beneficial - He pulls my ass out of some sticky situations, and I keep feeding him sidework on my machine. As far as a money partner, no way. I've got that one all figured out and I don't think I'm going to find someone that goes into the business numbers better than I can. I knew a guy that was way smarter than I was at this stuff and his whole point when he talked to people was to ask How do you know if you need a partner? His answer: If you can do it all yourself, you don't. But I probably can't, so it would be great to find someone that knows what theyre doing that would be interested in helping out for a side job.

 

[Georgia Iron]

Georgia Iron...It's just a machine. Skill required yes, so I'm not too concerned about the operating part. Re: Operating costs...At 5gph fuel consumption looking at $18/hr in diesel alone. The all-in cost I figured for fixed and variable costs per hour of operation is about $100/hr in year two.

Mechanics... Could I turn wrenches in a pinch? Sure. But I have a couple options there.

CDL

Ianjoub...I've been thinking more and more about other uses.

Catwelder...I found an owner/operator .

As I read through your posts. It seemed that you stated you would be buying a nice new machine and equipment to start a mulching business that you were going to pay someone else to run it for you. You have your "Day job". And will you guys check my numbers and give me a few pointers.

Now. I see you have your mechanic picked out, and your operator and driver ready and your check book ready. Are you planning to start a company to put all this in so if your new driver plows over someone going down the road you don't loose all your personal wealth? So I guess you have your company ready also...

Your comment on operations tells me all I need to know... Who is driving this now? YOU or you new driver. Maybe both. You have discounted the importance of that. Who provides the training for driving this potential rolling killing machine. Your not concerned about someone else operating your machine? You better be.. it WILL make you loose sleep at night.

Maybe you missed the part about an experienced owner/operator trying to roll my dump truck on the first week at work right under my nose. I dont know to many guys that do this that are working another job relying on someone to do this for them. Now that I think about it I dont know any.. Most owners are directly and heavily involved. Maybe not in the seat but working to keeping it/them working.. Even the ones that are so rich and they have 1000's of machines, they have men watching every crew.. I guess if you find the right worker it could work, but more than likely he will require you to make him a partner.. so then you now become the bank and your funding this project..

If you said I am going into this 100% and I am going to do it all myself I would think your odds to succeed would increase greatly. I would think it is a great idea but I still would recommend used equipment to hold you operating cost down. Based on your current idea, I would find something else safer to invest in...

The short and the long of it is this. You will figure it out and if your math and understanding of how it works is off it more than likely will cost you $10 of thousand of dollars. I just put simple math to buying equipment. How many hours will I need to sit in a machine before it is paid for? Then anything after that is profit... In your plan it will take years.. A lot can and will happen.. If you can net $50.00 per hour on your rig. 150,000/50 = 3000 hours / 40 hours a week is 75 good weeks of running.. before you start making money.. That is a lot of seat time and that would scare me... Be sure to update us on your venture as you move forward. I wish you the best of luck.

 

[catwelder]

id like to add new is not the only way to go you can buy something used with everything on it for half the price

 

[crane operator]

.It's just a machine. Skill required yes, but not rocket science. I've been running skid steers for about 5 years helping out around the in-laws business. Not perfect, but not bad. Can't be any harder than landing a jet on an aircraft carrier and I have just a little experience doing that

The difference between this and landing on a carrier: The hundreds of hours of training that taxpayers all paid for, then coupled with the fact that if anything breaks, uncle sam doesn't mind paying to fix it.

Anything your employee breaks, they don't worry about it, any more than you worried about uncle sam paying for something.

I guess we're just trying to be upfront with the potential costs involved with equipment, and that things do go wrong, and all the spreadsheets in the world mean very little.

But it sounds like you're getting everything lined up with mechanic and operator. So good luck.

Just because I'll throw this in as food for thought:


https://www.heavyequipmentforums.com/threads/is-this-a-good-deal.73496/



When you read the ebay ad, it burned in 2014, he's been paying off the note since then, or the insurance company finally settled. Reading between the lines, he ate the cost.

I went and set up a rented mini ex several years ago, inexperienced operator rented it (landscaper), boom up too steep on a sidehill and laid it over, the rental company charged him the full damages to the machine and he took a bankruptcy over it. He's still working as a landscaper, but I'm sure it wasn't easy.

 

[Hummed46]

And will you guys check my numbers...

That's really what I was looking for and some guys gave some numbers, but it doesn't seem like there are very many people out there that can say "it costs me $86.72 per hour to run machine x on average"...Or are willing to. What I've found all around on the other forums is that guys know they make money, or they know they're having a tough time making money, but it seems like not a lot of guys really have a good handle on how profitable their businesses are or maybe they're just not willing to share.

id like to add new is not the only way to go you can buy something used with everything on it for half the price

That's one of the things I'm thinking about...Renting for a few months and then buying the piece of equipment used. Where I'm at, 10 days of work/month would justify a monthly rental...Would give me time to get things going before a major commitment. The other thing about buying used that's good is that at least with CTLs, the machines lose about $10k in value the minute you drive them off the lot. Everything else is very closely related to year and hours (unsurprisingly).

If you said I am going into this 100% and I am going to do it all myself I would think your odds to succeed would increase greatly.

I've heard it both ways right here in this thread...Some guys say go out and find someone who knows what he's doing and use him for an operator, someone else said find someone who knows what he's doing and let him tell you how to do things, and you're saying I'm better off doing this 100% myself. Just goes to show that there's more than one way to skin a cat and if you ask three people for their opinion, you'll get three answers. Also just want to clear this up...I'll be running the machine primarily, with someone filling in when needed. There's no plan to be an absentee owner, or the bank, or just funding this project.

I guess we're just trying to be upfront with the potential costs involved with equipment, and that things do go wrong, and all the spreadsheets in the world mean very little.

I appreciate what you're trying to do because that's what I asked for. What I'M trying to do here is plan for those things. That's not me saying "Well I'm going to set aside $8k for a crane to come out and right my machine, and 15k for the repairs to the dumptruck, and 10k for whatever"...It's me saying "Alright, three people spent about 11 grand on big things, so I'll add 11k to my yearly costs as an allowance for major F ups." Then I'm going to take all the quotes and hard numbers I have, add in all the maybes/buts/allowances/ and divide it all up to get a cost per hour. That's really all I'm trying to do...boil this stuff down to a cost per hour to figure out if this is a profitable business or if I should just use my money for something else. Please don't get hung up on the spreadsheet...It's just a way to put all the information in one spot.

 

[John C.]

Time to stop talking about it and just go do what you want to do.

 

[Hummed46]

I think you're right about that.

 

[catwelder]

I went out and did it on my own I rent all my stuff since the hurricane is here ive got a mini and a skid rented and a dump truck rented. I got about 20 calls for jobs which I figure I might get about 5 of them which will pay for the rental. honestly no risk no reward im gonna be buying a used mid size excavator next year plus the dump truck. I might be full time into it or might be part time still it just depends on how this year goes and how next year starts. guessing your number on paper and your actual numbers two very different things. I assumed id make a certain amount this year and ive went over that and still have 3 months left. writing it on paper doesn't mean it will happen might make you wanna jump into faster but paper is just paper you gotta go out and work for it.

 

[Brown Dog L M]

It will be interesting to see how reality matches up to your projections.
Let me know how it goes, as I'm looking at going a similar route, but for work on my own property.
Good advice here, even if your root question was not answered. Consider talking with some of the operators near your area, see if they will share their rates as you don't want to undercut them, and rates are seemingly very location dependent. How heavy is the competition in your area? Talk with some local contractors - how do they get lots cleared and can you save them money by avoiding hauling, burning, etc. Work the other facets of your business plan while filling in the equipment blanks, and maybe accept that nobody can tell you because it changes so much from month to month as Murphy visits. Do you have a significant other, and what is their risk tolerance? Are there any operators in the area getting on in years and looking to take on an "apprentice"? Maybe YOU are the weekend $25/hour guy for a year or two while you learn the ropes. Check on the bulletin board at the local builder's supply (the real one, not just the consumer one). Ask around, as a well known, skilled operator might not feel the need to advertise. If you are on YouTube check out Clevinger Forest Services - he was a helo pilot so you might talk the same talk. Good luck.
(Change, adapt, improvise and overcome!)

 

[Birken Vogt]

Also if I did not mention this before, the answer might be to find the right 80 year old guy and buy him out, machine, client list, phone number and whatnot. Or even help him out as the sort of apprentice that will take over the business eventually.