How To Start a Backhoe Business

If a service business that provides excavation work for the construction industry sounds interesting to you, consider starting a backhoe business. Backhoes are one of several heavy duty pieces of equipment that are essential for any construction project that involves the movement of ground or earth in order to level the site and remove any existing landscaping or obstructions. A backhoe performs two different functions, utilizing a digger at one end of the machine to unearth the existing ground; and a front loader at the other end, which can carry the dirt away as well as level the area.

There are several different ways to start a backhoe business.  You could purchase a fleet of machines and lease out backhoe equipment to other contractors, purchase backhoe equipment that your own employees would use on construction projects, or purchase just one backhoe for your use as an independent backhoe contractor.

Equipment such as backhoes can easily run tens of thousands of dollars to purchase, so be sure before you start your backhoe business that you are securely funded with a bank business loan.  You can also approach the Small Business Administration about getting an SBA loan to begin. Don't forget to include in your start-up expenses money to pay for liability insurance for any employees utilizing your backhoe equipment.

Legal requirements for starting a backhoe business include registration with both the IRS and your state's department of revenue, along with getting the proper city or county business license. You will also need to secure a contractor or subcontractor license from your city or county government.

Decide what services your backhoe business will offer those in the construction industry.  The more services you can offer, such as soil testing, boring and environmental remediation, the busier your business can become.

Once you undertake any digging or excavation project, be sure you are familiar with digging rules in your area regarding underground power lines to avoid accidents and fines.  Make sure that every employee or associate working with you has the proper license needed to operate a backhoe to avoid litigation or fines down the road.

Because a backhoe business is a specialized area, target your marketing to the construction industry through their trade publications and professional associations.  Send direct mail advertising to general contractors in your area advising them your company is available to provide backhoe services at excavation sites.

One of the best ways to promote your backhoe business is through word-of-mouth referrals, so if you go the extra mile in providing excellent service to your initial clients, you can count on new business referrals as well as repeat business from satisfied customers.  Other promotional methods can easily be learned through online business classes.


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