How To Go About Starting Your Own Excavation Business?

The prospect of starting an excavation business can often be exciting especially if you have worked in this industry before. That said compared to other types of businesses the barrier to entry into this one is a lot lower, with perhaps only experience being a major hurdle that differentiates one business from the other. Before you start it is very important that you fully understand the basics of this venture.

One of the keys to success here is solid planning. Many people will also find that the initial startup costs are considerably high and so proper planning will ensure that your money is not wasted in any way. Always start off with a solid business plan so if you need financing from a bank or an investor securing it becomes easier.


Get the funding you need

Starting an excavation business is costly and so if you are like most budding businessmen then you’ll need to secure funding for it. The funding you get will be used to purchase all the required heavy equipment. Alternatively, you can also choose to lease the equipment. If you don’t have the funds required, leasing is the best option when starting out and later on purchase the equipment you need when you do have the funds.

However, once you prepare a business plan as stated above you can get funds from places like Small Business Administration banks or financial institutions that finance small businesses.

Registering your business

Another important step once you have the funds is to register your business. You’ll need to get a business license from the state government and then register to get an Employment Identification Number. This number will be used to pay your income tax, withholding tax and sales tax.

Get the required insurance

You will need to get both general liability insurance for contractors and also auto rental equipment insurance. Both these insurance policies will help to protect you, your business and employees against things like personal injury and you’re protected against damages. You may also want to get worker compensation insurance for all permanent employees. This is mainly because many contractors and or clients may not want to work for you or hire you unless you are insured.

You should start by finding a business insurance agent who will then advise and provide you with a good insurance package based on what you need. Whatever insurance policy you come up with it is very important that you have a safety program in place that safeguards your employees from personal injury and damage to the property they are working on in the event of an accident.

Get the required equipment

The type of equipment you buy will depend on the type of excavation business you want to do. However, the most common equipment needed is a backhoe for digging, a crane is used to lift heavy objects and you’ll need a bulldozer to push large parts of soil, a huge drilling machine which is often used to make holes, a grapple, mainly used to grab objects, a pile driver to pile up soil, a feller bench which you use to cut trees and other shrubs and an excavator scoop to pick up soil.

Some other equipment may also include tunneling and boring machines.

Search for clients

This will have to be done mainly through the existing networks of contractors and construction companies that you may be in contact with. Many of these companies will have no problem subcontracting their work over to you. Also, make sure to join the local Chamber of Commerce, and then come up with ad material like business cards, posters and a website. All of this will help you secure contracts

Hire experienced staff

It is no secret that operating heavy equipment requires experience and drivers need to have a commercial license. Make sure that anyone you hire to operate a vehicle over 26,0001 lbs has a CDL. Those that do not have any experience have to be trained on how to handle these machines. If you’re a more hands on business person then hire a supervisor who is very experienced with excavation machines and processes, so this person can be the person in charge of training operations of the business’ day to day activities.

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Mark is a structural engineer who has over 20 years of experience in the construction industry. He currently runs his own excavation business in Brisbane and advises other startups. 

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