5 Things You Need to Know Before Starting an Excavation Business
Starting an excavation business is a rewarding challenge, but it's not without its hurdles. With nearly a decade of experience in the excavation and utility sector, I’ve learned a lot of lessons along the way that I wish I’d known when I first started. If you’re considering taking the leap into the excavation world, these five crucial points will help you set the foundation for success.
1. Find Your Purpose
Before you jump into the excavation business, take a moment to reflect on why you want to start it. Are you in it for the flexibility, the opportunity to work for yourself, or are you looking to build something for your family or community? For me, the purpose behind starting Sy-Con was to create a company that not only did great work but also built a strong, positive culture that supported our team. This purpose has driven me every step of the way. If you don’t have a clear purpose, it’s easy to lose sight of what really matters when the challenges hit.
2. Sales Is Everything
The easiest part of running an excavation business is the actual work—digging, grading, laying pipe. But the real challenge? Sales. Without sales, your business won’t grow. You need to be out there building relationships, securing contracts, and keeping your backlog full. A lot of contractors think they can get by without focusing on sales, but I’ve learned the hard way that this mindset can hold you back. Having a steady flow of work coming in is essential to building a strong foundation for your business.
3. Know Your Costs
Knowing your costs is critical. Many new business owners, myself included, get excited to take on jobs without fully understanding what the job will cost them. Understanding your overhead, fuel consumption, equipment wear and tear, and labor rates is essential to staying profitable. If you don’t know your costs, you’re going to run into problems down the road. Even if you’re new to the business, you can avoid costly mistakes by paying attention to every little expense. I learned this lesson the hard way, but now I’m able to make better decisions and avoid losing money.
4. Pick the Right Equipment
Choosing the right equipment is a fine balance. You don’t want to over-invest in machinery that’s too big for the job, but you also don’t want to undershoot and be stuck with equipment that can’t handle the workload. When I first started, I didn’t fully understand the impact of choosing the right equipment for the job. You have to think about the kind of work you’ll be doing, whether it's residential or commercial, and the equipment that will suit those needs. Picking the right equipment will save you time, money, and headaches.
5. Focus on Profitable Work
It can be tempting to take on any job that comes your way, but focusing on profitable work is what will keep your business sustainable in the long term. Not every project is worth your time, and sometimes it’s better to say “no” than take on work that’s going to eat into your profits. Look for jobs that bring in a good margin, and don’t be afraid to focus on areas where you know you can excel. Over the years, I’ve learned that you need to be strategic about the work you take on. Doing profitable work, even if it's not glamorous, will set you up for long-term success.
In Conclusion Starting an excavation business is no small feat, but with the right mindset, sales strategy, cost understanding, equipment selection, and focus on profitability, you can build a strong foundation for growth. These five lessons are what I’ve learned through years of experience in the field. The road to success is paved with hard work, sacrifice, and continuous learning, but by following these tips, you can avoid some of the pitfalls I faced early on.
If you’re ready to get started in the excavation business, keep these key principles in mind. Don’t forget to subscribe to our channel for more behind-the-scenes content, and check out our resources on the Blue Collar Business Podcast for even more tips on scaling your business.
