Next, Overhead

[Ryan@OTT]

I'd like to start back up in business in a few years (had a successful run I cut short after making a lot of money (for me) then pulling out). I found a lot of things worked for me, big chipper, big stump grinder, newer equipment. The one mistake I made was buying a 3 year old dodge 5500 with a brand new aluminum dump box. The setup worked! But the truck cost about 60k. The only thing I regret is not buying a bucket truck instead of the dump truck at that price, so many quick tear down jobs that bucket could have been used for. Just wondering if anyone with a 3 man setup (you, two groundmen) bucket truck, large chipper, and a few stump grinders, could give me some insight into their overhead. Is the bucket truck a money maker or a financial drain? I do all of my own climbs, but had quoted at least ten jobs (take downs) a year that would have taken 2 easy hours with the bucket truck as opposed to 8 draining ones climbing the tree and
dismantling it. I felt those alone would cover the extra overhead. Not to mention all the other jobs it could have been used for instead of climbing everything. Is there something cost wise I'm missing? How much a year does your bucket truck make vs cost you?
Thanks in advance!

 

[Haplo]

What's better, a dump truck or a dump truck with a bucket lift on it?

We operate as a crew of 2, one bucket with chip box pulling the chipper. We only pay cash for equipment so there's no loans or interest and we set aside 30-50k a year for expenses and equipment upgrade. If I had to buy all the equipment with loans, I wouldn't want payments to be any more thank 30-50k per year. So overhead would be the same anyway except for the added anxiety and interest payments. Bucket is definitely an asset and not a financial drain.

 

[Ryan@OTT]

Awesome, thank you for the reply! I can definetely see it making me good money (general production, storm work, jobs where customers just want the tree taken down). I just hear about these ridiculous bills for things that seem to be associated with bucket trucks specifically, cable repairs, hydraulic issues, etc. Right now there is for example a 2004 "fully certified" 4300 International with an Eaton Fuller DT466 diesel motor.
Truck has 450000km on it, doesn't list hours. 60ft working height.
Just curious as to what you'd spend, and what type of bucket truck you'd look for, if you were looking long term and had to buy a bucket truck all over again.
Ryan

 

[Haplo]

did you mean 45,000 km or 450,000 km? My bucket was 130,000km for $ 45,000. Spent about 3,000 on replacing hydraulic lines almost right away. It runs great. Sure repairs can be expensive but you budget for that

 

[Ryan@OTT]

Yeah that was not a typo! 450000kms, truck looks mint shapewise, I'm guessing it did its share of travelling but still right? So I figured I'd get a truck for around the same price as yours... hopefully same mileage, would you mind sharing what year it is? May I ask what those expenses that you plan for are? So the 3k in hoses, not really a big deal. But for a year what would you say you budget for bucket truck maintnance? Are there any big periodic repairs you know are coming? If so what might they look like price wise? Sorry I really have no other references for any of this info and it's such a big purchase. I really appreciate the help!

 

[Haplo]

it's a 2005 GMC C7500. The way I think about the budget is to allow enough that in 2 to 5 years you would have enough in the bank to buy another truck. So if the cost of a repair reaches a certain threshold, lets say 40% of the vehicles worth, then you might consider trading it in at that point. In other words, try to have 10-20k in the bank in case something goes wrong with the truck and save more in addition to that to buy other pieces of equipment or another truck in a few years. At least save up enough that you have your 10-20k cushion, and enough for a down payment if you have to replace it. I don't plan for any repair in particular, being mostly uneducated about what could go wrong with the truck, but I want to be ready for whatever does happen.

So it looks something like this:

+ minimum desired pay + taxes
+ regular expenses (payroll, fuel, insurance, etc)
+ savings for future equipment
= minimum yearly gross
/ # of working days in a year
= minimum daily rate

then stick to your rate when your bidding

 

[Ryan@OTT]

it's a 2005 GMC C7500. The way I think about the budget is to allow enough that in 2 to 5 years you would have enough in the bank to buy another truck. So if the cost of a repair reaches a certain threshold, lets say 40% of the vehicles worth, then you might consider trading it in at that point. In other words, try to have 10-20k in the bank in case something goes wrong with the truck and save more in addition to that to buy other pieces of equipment or another truck in a few years. At least save up enough that you have your 10-20k cushion, and enough for a down payment if you have to replace it. I don't plan for any repair in particular, being mostly uneducated about what could go wrong with the truck, but I want to be ready for whatever does happen.

So it looks something like this:

+ minimum desired pay + taxes
+ regular expenses (payroll, fuel, insurance, etc)
+ savings for future equipment
= minimum yearly gross
/ # of working days in a year
= minimum daily rate

then stick to your rate when your bidding

Honestly I really appreciate the break down at the end, you've been extremely helpful! Thank you so much!
Ryan