# WBE Excavating Business Startup



## coreylkh (Nov 24, 2007)

Hello All! I've been following your threads for some time and need a little advice (or at least a fire put under my rear). 

Here's my story:

I'm a 35 year old female from Chicagoland. I've been in the excavating, trucking and farming industry my whole life and I'm very comfortable in the excavating business. I've gone to college for Business Mgmt., labored in the field (my mother owned an excavating business and she currently owns a trucking business), I've been an estimator for 5 years, use Paydirt daily, and I've been a project manager for 10 years as well. The smallest project that I've bid/managed is a house foundation and the largest was an Elevated Parking Structure excavation at Midway Airport. Now that it sounds like I'm tooting my own horn, I'll get to my problem....

My current employer is about to go bankrupt and I don't want to go back out and find another job with a GC as I don't have a Civil Engineering degree and I have small children at home. I was considering starting my own business as a WBE but I'm scared to death of failure. With the market slump right now it's either extremely opportune or the most stupid thought I've ever had. I don't run equipment and we are all union contractors here so I would need to hire an operator at $41.25 per hour. I can do my own books, estimating and project management but I can't do the field work. Any thoughts? Thank you.


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## rino1494 (Jan 31, 2006)

First of all. Welcome to the site and the E & S&W family. We are always glad to have new members, especially a female perspective on the business. 

I may not be able to help you as some of the other members on this site, but I may offer some advice. You say that your mother used to own a excavating business and currently owns a trucking business. Is it possible to team up with your mother and get back into the excavating business. You can use your mothers equity to go to the bank with a business plan to purchase the equipment. You may be able to start up a company and lease your mothers trucks and equipment to the company. 

If you are afraid of the market, you can definitely sign on with another outfit with your experience. Very few people around here that are in the biz have civil engineering degrees.


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## coreylkh (Nov 24, 2007)

My mom is willing to help me get started financially if necessary but she doesn't want to get back into the excavating after liquidating in '02. The trucking doesn't require the time and babysitting as does the excavating and she is doing better without the excavating anyways. She got out at the time because the WBE status wasn't as lucrative as it's becoming now - BUT - we are saturated with excavators around here. I wouldn't be competitive (I think) unless it is a WBE project and minority participation is required.

I am hoping to apply for a small business grant and minimize the amount I have to borrow. I have a tendency to overanalyze things to death, especially when it comes to my money. I just need a nudge from experienced owners to either tell me I'm nuts or to jump in and try.

Thanks for the warm welcome, I've really enjoyed reading the forums.


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## coreylkh (Nov 24, 2007)

Another thing that I should mention is that I'm VERY vulnerable when it comes to equipment. I know what needs to be used for what (i.e. CAT 330 vs. a JD 160 for excavators, backhoes, etc.) but I really have to be careful when it comes to equipment purchase. I've got "duh" written all over my forehead when it comes to the mechanical side of things. My family is no help since my Dad has a tendency to get the biggest and most expensive (guy thing?) and there are no other males in my family (excluding my electrician husband and 2 boys under age 6). I may look at renting for a few months and if all goes well then lease to own. I'm sure it would be entertaining to watch a salesperson try to sell me an excavator.


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## denick (Feb 13, 2006)

C, 

As rino said, welcome to the site. What type of work are you looking to start with? Can you start up a company with 1 machine and 1 operator?


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## coreylkh (Nov 24, 2007)

I wish I could but I don't think that's possible. Most of the work that I'm qualified for would be with the County DOT, IDOT, Metra (train) and PACE (bus) that all require WBE participation. In order to reach the required 15% WBE participation I would have to be able to perform at least $100 K worth of work in approx. 30 working days. My guess is that I could use a small to medium excavator (Hitachi 200 ish or a Cat 160), combo backhoe, skid steer and maybe a loader. I would sub or rent everything else. I just don't know how much cash flow I would have to support all of this equipment.:blink:


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## denick (Feb 13, 2006)

C,

How do you get to be a qualified bidder without a company?


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## coreylkh (Nov 24, 2007)

Correction.....*IF* I had a company. It's VERY easy to get prequalified here in Chicago and Milwaukee. There's a Women's Business Development Center in Chicago that basically holds your hand throughout the certification. Also, my current employer was prequalified as a WBE and she doesn't know the difference between sand or gravel. I'm not worried, they're giving them away around here.


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## denick (Feb 13, 2006)

C

All this work requires bonding doesn't it?


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## LNG24 (Oct 30, 2005)

When I was in excavating and doing government work, I was always the sub on the site. The company that won the bid, didn't have any equipment, ALL SUBS!

I do not know the regulations, but any City, State or Federal job will be governed by the minority rule I believe, No? From my Limited Understanding, Everyone gets to bid, but they look at WBE and Minorities first and give them more weight than I would get.

I fyou know what equipment you need, then all you really need is a good mechanic to give the purchases the once over. You could make someone a nice offer, Help Me get Set up and You Get to be Head Mechanic! 

Also, if your running Union, and you don't need to be a Union Shop, just have to pay Union Wage and Bennies, then all you really need is equipment. In that case, Lease the equipment for that job. That is what most of the big companies around here do. They just had a job out at the airport and United Rental not only provided all the equipment, but the pick up trucks the guys needed to go back and forth from Work to Home.


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## coreylkh (Nov 24, 2007)

Yes, the whole gammit. Bid, Performance and Payment Bonds. Thankfully my parents have successfully been in business since '79 so I have them as my credit references and/or co-signers. I have pretty good credit and my Mom has excellent credit so I could use her bonding agency without any problems. I would attempt to use my own assets for bonding capacity but I at least have a backup if needed.


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## rino1494 (Jan 31, 2006)

coreylkh said:


> Correction.....*IF* I had a company. It's VERY easy to get prequalified here in Chicago and Milwaukee. There's a Women's Business Development Center in Chicago that basically holds your hand throughout the certification. Also, my current employer was prequalified as a WBE and she doesn't know the difference between sand or gravel. I'm not worried, they're giving them away around here.


How does one become a excavating business owner without knowing how to do the work ?? My mom's friend owns a very successful excavating and paving business. Her father-in-law started it, then her husband took it over. He became a drunk and druggie and gave it up. She took it over without knowing anything. I have to give her credit. They do alot of gas and water work and paving.


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## denick (Feb 13, 2006)

C,

Would you be Union?

Does your mother have land and a shop that yu can work out of?

Is there a good labor pool to get operators and labor from?


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## coreylkh (Nov 24, 2007)

IDOT does an equipment and financial audit prior to prequalification. You must own or finance at least 50% (not positive) of your own equipment so they can weed out those that only want to front as a Minority company. As far as Union vs. Prevailing Wage you have to weigh the fact that I live near Chicago. There is no such thing around here as Prevailing Wage. If I even thought of trying to contract and not be union my job would be picketed before the bucket hit the dirt. Even IDOT Landscape Contractors have to be Union around here.


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## denick (Feb 13, 2006)

C,

it seems you would need 1/2 a million dollars at least to get going?


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## coreylkh (Nov 24, 2007)

The Operator's Union is soooooo strong here that the employers almost get screwed. Since I've been in excavating the requirements of the Union Operator have gotten to an all time low. They aren't even required to know how to read a print - BUT - if you call the hall for an operator, you WILL get one. 

As far as the land and shop go I'm in a great position. We still own the farm so I would have a place to store equipment and material but the office space is up to me. I have a home office and I'm almost paperless so I don't need much space.


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## coreylkh (Nov 24, 2007)

I would need $245 K to start if I only lease or rent in the beginning. At least that's what I recently came up with at $32K a month in payroll and 4 months before the first payout. Don't get me wrong, I certainly can be light on my estimate but I already have the adminstrative side set up since I used to estimate at home on the side.


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## tgeb (Feb 9, 2006)

Welcome to the site! Glad to have you aboard.

I can't add much to what has been stated already.

To find some work that would payout quickly would be key to getting the cash flow going.

That's the problem with government contracts.....slow pay.


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## denick (Feb 13, 2006)

It's a real logistic problem when you start to look at what you might do.

Join the chat room tonight C, if you'd like


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## coreylkh (Nov 24, 2007)

Thank you, I'm glad to be aboard. It's kinda cool to be able to spout off anonymously without repercussion. Lord only knows how much I can complain (yes, chick thing...:laughing but at least I can get ideas from soooo many different angles. I will be posting often now that I broke the ice. I really enjoy reading up on how the rest of the country plays in dirt.

Oooooo also, I just read about the chat room. My volleyball game this week got cancelled so I'm in!


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## piperats (Dec 11, 2007)

*Mbe Wbe*

I just signed up also and sorry to start off so sour but as for as I'm concerned this whole WBE and MBE is a crock. I mean we put the boxing gloves on along with everyone else these days to secure jobs for our men only to turn around and hand over 10-15% to these people? This is a free country with free enterprise, Sharpen your pencil like the rest of us and let the cards fall where they fall. There is no minority when it comes to bidding!!!! You either have it all covered for XXXX dollars or you don't. Am I alone here or is enough enough?:furious:
Doug


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## coreylkh (Nov 24, 2007)

I have to agree with you.....but, if it's there, I'm going to utilize it. I can sharpen my pencil with the rest of you but for some reason the government thinks that I can't so they are going to hand it over. If I don't take it, someone else will that may not even be qualified enough (I know plenty who aren't) to do the work. I feel comfortable in the fact that I'm at least taking advantage of something that I'm qualified for. 

I do see your point though. I would be ticked too, epecially if I lost work because of it.


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## rino1494 (Jan 31, 2006)

coreylkh said:


> Thank you, I'm glad to be aboard. It's kinda cool to be able to spout off anonymously without repercussion. Lord only knows how much I can complain (yes, chick thing...:laughing but at least I can get ideas from soooo many different angles. I will be posting often now that I broke the ice. I really enjoy reading up on how the rest of the country plays in dirt.
> 
> Oooooo also, I just read about the chat room. My volleyball game this week got cancelled so I'm in!


Feel free to post a pic of yourself :thumbup:


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## coreylkh (Nov 24, 2007)

Victoria's Secret December issue page 7.:laughing:


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## piperats (Dec 11, 2007)

coreylkh said:


> I have to agree with you.....but, if it's there, I'm going to utilize it. I can sharpen my pencil with the rest of you but for some reason the government thinks that I can't so they are going to hand it over. If I don't take it, someone else will that may not even be qualified enough (I know plenty who aren't) to do the work. I feel comfortable in the fact that I'm at least taking advantage of something that I'm qualified for.
> 
> I do see your point though. I would be ticked too, epecially if I lost work because of it.


But it is not the government handing it over. It's the government telling us that we have have to give away 10-15% of our hard earned jobs. Yes our forefathers did some people wrong but that is so far removed from our generations that I say GET OVER IT! It wasn't me.


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## coreylkh (Nov 24, 2007)

I really can't respond to that.... the reason being that you are arguing over something that you (or I, or anyone) can't change. It is what it is....it's there and it's not going away so there's no sense in trying to argue something that we don't have control over.

Truly, I'm not being a feminist or anything. I believe in equal pay for equal work but it's not like it's a government subsidy....it's set aside. No one is taking money out of anyone's pocket it's just being set aside. Again, I wouldn't even consider starting my own business if it weren't for the SBA and WBE. Not because I can't do it, but the government is begging to give me money so I'm not going to turn it away. I pay my taxes like everyone else.

I hope I don't come off as defensive - only informative......:whistling


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## piperats (Dec 11, 2007)

coreylkh said:


> Truly, I'm not being a feminist or anything. I believe in equal pay for equal work but it's not like it's a government subsidy....it's set aside. No one is taking money out of anyone's pocket it's just being set aside.


Who do you think pays for it?? Everyone in this country thinks its free money. Its not free, The rest of us pay for it. And the analogy of "If I don't use it someone else will" *well thats what's wrong with this country. *Take pride in doing it yourself without sucking on the hard work of others.




coreylkh said:


> Again, I wouldn't even consider starting my own business if it weren't for the SBA and WBE. Not because I can't do it, but the government is begging to give me money so I'm not going to turn it away.


Government begging to give me money??? ALIAS = TAXPAYER = ME = OTHER HARDWORKING MEN AND WOMEN WHO VENTURED INTO THIS GREAT FREE ENTERPRISE SYSTEM WITH THE SAME RISK AS THEIR FELLOW AMERICANS.

Do I want to harass you? No.

Do I want to wish you well? Yes

Do I agree with MBE/WBE? NO?

I made it the honest way!

Good Day


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## coreylkh (Nov 24, 2007)

10-4


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## piperats (Dec 11, 2007)

You know the more I think about this thread the more I want to clarify my thoughts. If you put your focus more on sound business practices than what MBE/WBE can do for you your chance of success will greatly improve. I am new myself but wish you a welcome.


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## coreylkh (Nov 24, 2007)

I appreciate your welcome since this is my 1st day. I'm here to hear from others - good or bad. I can handle it. You must understand that I understand your stance but I'm not going to let some moron build my stuff. I will take the opportunity since that 10-15% will be me, or............some other minority.


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## LNG24 (Oct 30, 2005)

rino1494 said:


> Feel free to post a pic of yourself :thumbup:


 
DOWN BOY


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## LNG24 (Oct 30, 2005)

piperats said:


> as for as I'm concerned this whole WBE and MBE is a crock. I mean we put the boxing gloves on along with everyone else these days to secure jobs for our men only to turn around and hand over 10-15% to these people? This is a free country with free enterprise


You would think, but it is not that simple. Our government is full of people whos sole job is to buy off politicians. This is especially true in big construction projects and, around here anyway, many highway contracting firms participate in this. 

The MBE and the WBE was started because our governmet discriminated against these tow classes for a long time. Don't think it is still going on? Have you rwife or girlfriend approach someone about a contracting project. See if she gest the same treatment as you do.

In fact, I believe they still refer to it as the Men's Club. Just how many deals have taken place on the golf course or health club or over drinks? I personally have been pre hired for jobs that then had to go out to bid even though we had already discussed the full details and bottom line. I was told that the only way I would loose the bid was if an MBE or WBE bid against me. So; Was this a Fair Bidding Opportunity? NOPE! I held all the cards and if your deck was not in the same order as mine, you didn't win.


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## dayexco (Mar 4, 2006)

LNG24 said:


> I personally have been pre hired for jobs that then had to go out to bid even though we had already discussed the full details and bottom line. *I was told that the only way I would loose the bid was if an MBE or WBE bid against me.* So; Was this a Fair Bidding Opportunity? NOPE! I held all the cards and if your deck was not in the same order as mine, you didn't win.


no, that's not a fair bidding opportunity.....you theoretically go in with a properly prepared, fairly priced proposal....have spent time and money to prepare this proposal, only to have an MBE or WBE come in at your price or maybe even higher, so the GC can meet a federally mandated quota? you're paying tax dollars to staff this government entity to take work away from you? this isn't fair. MBE/WBE's are given an edge on financing, bonding, and bidding. i'm of the opinion the playing field is level...let's go head to head and let me lose the job legitimately if you want my respect as a competitor.


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## coreylkh (Nov 24, 2007)

I guess there's really no good answer for this one. Around here I could use the edge because if I go to a bid opening for our County DOT I can be guaranteed to be going up against no less than 10 other excavators. If I were the low bidder around here I would probably starve. At least I could make a fair buck and not have to low ball to get a job.


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## dayexco (Mar 4, 2006)

you as an MBE/WBE make a fair buck, leaving the other 10 contractors to try and feed themselves on the scraps left on the floor, beating themselves to death bidding projects at cost or lower just to keep their operation going. this is fair? a program to help one group of people make others suffer?

know this, i have NOTHING against you, i wish you well. but i still maintain my opinion that i think the playing fields have been leveled. MBE/WBE were a necessity in their day. 

i'll give you this scenario. this last summer at one time, 80% of my labor force were native americans. great people, great workers. one of them suggested that being we had the minority ratio at that level, that we can bid tribal work and go into the bid with the same qualifications as a legit tribal contractor. we could bid on these tribal projects that typically have a substantially "locally anyway" higher profit margin than the other work here available. is this really fair? is this really messed up? we have too many people in washington trying to make things "fair"....sometimes life's not that way

just my .02


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## coreylkh (Nov 24, 2007)

I know that you have nothing against me. This site is here to state opinions and everyone has one - it doesn't mean we have to agree. 

Now, you all realize that the DBE/WBE program is graduated? The whole purpose is to help the disadvanted to succeed or drop out. My mom started in the WBE program and was successful in getting the business going and now she is no longer qualified as a D/WBE. She is a regular business owner like everyone else.

The whole DBE program isn't there to take advantage of being disadvantaged, it's also a learning tool for your industry. Wouldn't you prefer to bid against a WBE that knows what their doing or a moron that bids to get work just to have work? 

Truthfully guys....if I were to approach any of you about excavating you would probably scratch your head and wonder why I would want to be in an industry typically run by men. If I approached you as a WBE you would at least know I'm qualified to be in an industry typically run by men.


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## coreylkh (Nov 24, 2007)

Another point to be made is that the WBE program is only for municipal work which makes a very small majority of contracted work anyways. I'm not leaving scraps for the others' to clean up when the housing developments, strip malls, Target, Wal-Mart, etc. couldn't care less about my status. There's PLENTY of work out there for everyone. I haven't heard of anyone going out of business because a DBE took all of the work.


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## dayexco (Mar 4, 2006)

coreylkh said:


> Wouldn't you prefer to bid against a WBE that knows what their doing or a moron that bids to get work just to have work?
> 
> 
> > *typically morons do not last in the business world. are we talking about an individual with an IQ of let's say 90, knows lots and performs well in the field, but falls on his face in the office? or the individual with an IQ of 140 that is at home in the office, but no clue on their own how to bid, implement, or complete a job? particullarly a difficult one? we're all morons in our own rite*.
> ...


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## coreylkh (Nov 24, 2007)

You're right. Let's just let it go. Thanks for your well wishing. Have a good day.


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## LNG24 (Oct 30, 2005)

One of the reasones that WBE and MBE is in place is to stop a situation I was just in this afternoon.

I simply accompanied a woman to the building department. I was wearing my Realtor Hat for this meeting, Not my contractor hat! The woman is smart, well organized and professional. To be exact, she is an attorney. We met with the Building Inspector, The Zoning Code Enforcement Officer, and the Engineer for the project she is heading up. 

I did not ask questions, I was simply there to answer any that she might not have answers for. Afterall, this is my client doing a project in my town. 

So, I can't tell you how many time these men spoke to me as opposed to her. They were all standing at the table, I simply sat in a chair on the same side as she, yet they constantly spoke to me (looking at me as they speak, not her) they directed their questions to me; Questions she had the answers for , not me.

It was so obvious that they were uncomfortable dealing with her as a woman so they chose to spoke to me instead. As long as this is how business is conducted, we MUST have these programs in place.

Lets Face it guys. If We (not us personally, but I am sure we all know someone who does it) did not discriminate based on Sex, Race, Religion, we WOULD NOT need these programs. BUT WE DO...SO THEY EXISIST. 

Now, As Long as THEY EXISIST, why woudl we beat her down for using it?

Have any of you ever taken advantage of any Governement Program? Low Interest Loan, Community Improvement Program, SBA, anything.

I can not believe as SMART BUSINESS PEOPLE we would simply NOT take advantage of a program out there to help us. Even if it dosn't help all. 

If I build in a certain area, the goverment will subsidize my costs, if I farm a certain product, they will pay me, These are not fair to other farmers or builders, but the programs are there so we take advantage of them.

If you disagree with WBE and MBE, then your BEEF is with the LOCAL, STATE and FEDERAL Government, NOT this woman or minority. Petition your legislators to change it. Don't Beat Down those that use the program as intended. 

BEAT DOWN THOSE that abuse and take advantage of these programs. Like the local contractor that files for a new business name and puts his wife or daughter as President so he can use these programs for himself. That is where the issue is.

So since we can not change this right now, lets get back to her question about starting this business. :thumbup:Her answers and her plan will show whether or not she knows what she is doing.

So far we have helped others, including myself, who have less experience than she does.


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## denick (Feb 13, 2006)

Corey,

Only seven weeks until March 1. Better get off the fence or have to wait until 09'


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## coreylkh (Nov 24, 2007)

Very true. I'm taking my sweet time on this one. If I can't get something going this year, that's fine. I'd rather be prepared then- than broke then. I will at least have all of my paperwork on order, just without the financing. Give's me a little time to get creative, ya know? It is still nice to have a goal in this certification. Gives me something to do in this winter down time.


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## rino1494 (Jan 31, 2006)

How about your current employer ?? Does it still look like they are going under ??


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## coreylkh (Nov 24, 2007)

Oh they are definitely going under and it's well deserved. They've pilfered all of the company money on themselves and it's finally caught up with them. Words of wisdom.......Don't run all of your personal finances through the business! Feds don't like that too much!


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