# Insurance costs?



## zraffz (May 7, 2011)

I've been throwing around the idea for starting a business excavating for a few years now. I wasn't ever in a position financially to do so in the passed. I'm at the point I can outright buy most of the things I need.
I have prior experience and knowledge of the trade.

I am trying to figure out a breakdown of monthly overhead for a business plan. Obviously, fuel can be figured out relatively simple, set aside money for maintenance and repairs, truck registration and insurance. 

My big question is the insurance. I understand it will vary significantly from policy to policy but who can I call to get a rough estimate of a annual/monthly cost if I know which machine I want, an idea of the trucks GVWR and what liability I want? (In case anybody is wondering I am looking for a 56-60k gvw truck, 20 ton trailer and a 26-28k excavator to start out)


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## burntside bob (Sep 27, 2010)

I will suggest that you very seriously consider going to or phoning a local small business administration office in your state and asking to be connected up with an adviser that has much experience in the construction industry (preferably excavation experience). That would be your best move, you will be amazed at what you will learn, and when all done with the conversations; you may walk away from your idea of starting a excavating construction business. Just being realistic with you and your dreams (ideas).
Owning the equipment is one thing but what about cash in the bank to operate the business on until cash starts flowing into the business?
Being in business is not easy, having experience operating equipment does not mean, you can operate a business, two very different animals, two different skill sets, both needed to own/operate a excavating business (or any business).
My two cents worth of advise to you.
Contact your local small business administration office, finally get some of your tax dollars value back.


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## dayexco (Mar 4, 2006)

burntside bob said:


> I will suggest that you very seriously consider going to or phoning a local small business administration office in your state and asking to be connected up with an adviser that has much experience in the construction industry (preferably excavation experience). That would be your best move, you will be amazed at what you will learn, and when all done with the conversations; you may walk away from your idea of starting a excavating construction business. Just being realistic with you and your dreams (ideas).
> Owning the equipment is one thing but what about cash in the bank to operate the business on until cash starts flowing into the business?
> Being in business is not easy, having experience operating equipment does not mean, you can operate a business, two very different animals, two different skill sets, both needed to own/operate a excavating business (or any business).
> My two cents worth of advise to you.
> Contact your local small business administration office, finally get some of your tax dollars value back.


well put, i'd also advise you to hire a good CPA...and meet with him at LEAST once a month. i think in the long run, he's made me just as much money in my biz as i have by his advice.


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## zraffz (May 7, 2011)

I appreciate the advice but I have already thought about that but don't consider my cost of living into this. I will be waiting until the 2016 season before I actually start doing this as a business (which will give me more time to bank money away for myself). A rental house needs a septic and for the cost of the septic I can buy the machine and take out a home equity loan to cover materials and the paper end. 
If I find the truck and trailer I want before I start I will obviously buy it but I am by no means in a rush. I've factored into consideration my cost of living and it's rather low since I own everything outright... this is not the first business I have started (in 2011 I started a garage that is still in business and although profitable I took a job with a local town because once I factored in benefits I was ahead of splitting my end of the profits from the garage). I made do on a much smaller startup budget and way less money in the bank on that business too.


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## EthanB (Sep 28, 2011)

You're most likely going to need a few different insurances, GL, WC, maybe E&O or vehicle, so I'd just contact an insurance agency and have them price it for you based on your projections. That way you have the real number.


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## dayexco (Mar 4, 2006)

once he sticks a bucket in the ground, he'll need xcu


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## jhark123 (Aug 26, 2008)

There is very little chance you will buy a reliable machine for the cost of a septic.


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## dayexco (Mar 4, 2006)

jhark123 said:


> There is very little chance you will buy a reliable machine for the cost of a septic.


kinda what i was thinking. that or septics cost a huge pile of money in his area..


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## zraffz (May 7, 2011)

dayexco said:


> kinda what i was thinking. that or septics cost a huge pile of money in his area..


Yeah... I know when we did them, going from a cesspool to a 3 bedroom septic was anywhere from 20-25 grand. In NJ they are so expensive you can't get a mortgage on a house if you don't have a septic that is in good shape.


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## jhark123 (Aug 26, 2008)

I do septics here in one of the most regulated counties in the nation. That 25k septic is going to have at least 10k of parts and you are going to need a specialty license to do it. I have been renting for years because I don't want to buy a cheap machine.


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## elecbysullivan (Dec 15, 2013)

zraffz said:


> My big question is the insurance. I understand it will vary significantly from policy to policy but who can I call to get a rough estimate of a annual/monthly cost if I know which machine I want, an idea of the trucks GVWR and what liability I want? (In case anybody is wondering I am looking for a 56-60k gvw truck, 20 ton trailer and a 26-28k excavator to start out)


Where are you at in NJ?

This guy is really good for insurance, he is the dude whom you see at the plumbing and electrical exams. http://franchinoinsurance.com/new-jersey-nj-excavation-contractors-insurance

Here is the NJ SBDC. They hardly update the thing anymore, but find your local chapter.
http://www.njsbdc.com/


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## Fouthgeneration (Jan 7, 2014)

Here he could rent a larger mini-hoe, ~250 a day, or 2250 for a month, add about 13% if he doesn't have machine insurance....

many rental houses have rent to own schemes to keep their inventory fresh.


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