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How Do I Start an Excavating Business?

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  • Written By: Karyn Maier
  • Edited By: Bronwyn Harris
  • Last Modified Date: 29 July 2014
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    Conjecture Corporation
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Starting an excavating business can be a rewarding and lucrative career. However, this endeavor is not without challenges and risk. For one thing, it involves hard work, long hours, and specific skills in order to run and maintain various pieces of heavy equipment, such as bulldozers, backhoes, and cranes. In addition, market competition will depend on how much capital is invested at start-up, as well as the reputation earned from the first few contracts completed while establishing the excavating business.

The first step in starting an excavating business is to take an inventory of current skills, experience, and equipment. If you’re reading this article because you’re interested in starting a company of your own as an independent contractor, but you lack any on-the-job training and experience, then you may want to consider working for another company for a year or two first. This would help to provide a background in understanding certain logistical components of negotiating excavating contracts, such as making bid proposals and project planning. It would also offer a firsthand glance into how to work with other professionals, such as construction engineers and environmental conservation consultants to ensure compliance with local and federal laws. In other words, it takes a lot more than just knowing how to move the earth to successfully operate an excavating business.

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In terms of equipment, it’s best to start out with a few primary pieces. Obviously, this will take some layout of cash or the ability to finance equipment with a reasonable payback structure. However, the most important piece of equipment to start out with is a backhoe since the most common job called for is to dig out the space where construction is planned to take place. In addition, a lot of small jobs using this single piece of equipment can quickly add to the repertoire of contracts and referrals. For instance, homeowners frequently turn to a small excavating business to dig out trenches and improve drainage around residential foundations, to excavate land to create a man-made pond, or various other landscaping projects.

It will be necessary to research any mandatory licensing requirements that must be met in order to start an excavating business in your area. At minimum, a general business license is typically required, and it can be expected that licensing will be necessary to run specialized equipment, such as a backhoe or bulldozer. In some areas, it may be necessary to obtain a residential contractor’s license, depending on the services you plan to offer. In addition, most contractors purchase liability insurance to protect personal assets as well as those of the company.

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