Pros and Cons of Excavation Companies
December 16, 2021
by a searcher from Brigham Young University in Boise, ID, USA
Does anyone have experience owning/operating excavation companies? What are the pros and cons of these types of companies? What is the average life of excavators? Does the initial capital expense keep competitors out of the market? I currently own and operate a shower manufacturing company that delivers to the commercial and residential construction space.
from Franklin University in Richmond, VA, USA
Pros:
1) First trade on a project; first to complete scope of work (typically).
2) Opportunity to enhance margins by moving dirt between projects.
3) Easier" to recruit employees to operate equipment compared to manual labor trades.
4) Market seems to be more localized compared to other trades.
Cons:
1) Can be dangerous & high risk work (ex. deep trenches for utilities, employee struck-by equipment, striking existing utilities).
2) Equipment-intensive work. Lots of maintenance on equipment. High capex compared to other trades.
3) Higher cost to mobilize (or remobilize for call-backs) for each project compared to other construction trades.
4) Can work long hours, but that goes for all construction trades.
In my experience, I haven't ran across a bunch of site contracting startups. There are guys that start with a dump truck and pull a backhoe around to dig out swimming pools, but I wouldn't imagine competing against someone like this.
Excavators last as long as you maintain and how often you run them. I would expect at least 5 to 6 years out of a good piece of equipment that you are running year round.
Does this help?
from Brigham Young University in Boise, ID, USA