advice needed on agri contracting

bk1991

hi guys i have posted previous on this topic
i am 18 and am going do year at ag college but have in my head to start doing agri contracting next year 2010.i am kinda limited to wat to do as there is 4 guys doing pit silage ,8 doing silage bales,2 doing slurry,1 doing hedges .

i have in my head cutting hedges,slurry.dung spreading,and have a lowloader for farm haulage ie machinery bales etc
i need to get a business plan done for to get money from any of the banks or credit unions .what machinery would ye recmend i have decided on a jd 6910tls50k for the tractor anyway also what do ye see that would be wort doing that i havent mentioned my competitors doing firstof is under cut there pricies


bk1991

fig mclough

consider buying a digger, clean drains and do drainage!!! anymore of this bad wheater framers might be spending money on drainage if they have money of course.

also no one around me does house hold septic tanks!

maidhc

Just as an aside I was talking to an auctioneer last week who sold a few tractors at auction. Most are making less than 50% of their value.

There sounds like there is a lot of competition in your area, so why bother? Would you not consider offering more general farm relief services? Fencing, looking after farms when people are on hols, spreading fertilizer, even with the farmers own equipment? Just a suggestion.

Undercutting prices is well and good, but not necessarily enough to guarantee success.

Don't get carried away with the idea of buying machines. The quickest way to make a euro is to spend 10 thousand euros on a machine!

locky76

bk1991 wrote: »

hi guys i have posted previous on this topic
i am 18 and am going do year at ag college but have in my head to start doing agri contracting next year 2010.i am kinda limited to wat to do as there is 4 guys doing pit silage ,8 doing silage bales,2 doing slurry,1 doing hedges .

i have in my head cutting hedges,slurry.dung spreading,and have a lowloader for farm haulage ie machinery bales etc
i need to get a business plan done for to get money from any of the banks or credit unions .what machinery would ye recmend i have decided on a jd 6910tls50k for the tractor anyway also what do ye see that would be wort doing that i havent mentioned my competitors doing firstof is under cut there pricies
bk1991

I've a mate i went to college with and he's milking cows but as a sideline he cleans out septic tanks. he charges €200 a go just for the cleanout and extra to rod the lines etc, he is making a mint at it.
you would want to set up properly at it with a licence from your local authority and don't mind pissing about spreading it on land. my mate has a handy sized tank for calling to the houses with a long hose and a big tank that he brings the stuff to the local sewage plant with.
a lot of one off houses have very poor septic tanks/percolation areas and if thats giving grief the lady of the house will spend any money to sort it!
my mate is flying at it because he set up properly to do it, plenty other lads around do it but the key is they don't do it properly.
best of luck anyway!

alleyb

best of luck wuth your plans , but be carefull on a couple of fronts ( a ) try specialise, the silage end looks over supplied but if you have the time for hedge cutting and try your best to do a good job at a fair rate you could pick up business. there is a lot of machines in the country but the problem a lot of people have is being able to have time , while your competitors are wrapping etc you'll have a head start on them doing hedges.( b} dont under cut its hard enough make money , and no point in being a busy fool. (c) choose your customers carefully.a lot of customers aren't worth having. they wouldn't pay for a year or ever (d) not sure on land drainage , there are plenty of idle track machines at the moment who may move in on that market

nilhg

Do your year in Ag college and enjoy it, you're only 18, keep your options open for a while before you decide to go contracting on your own. If you are hell bent on doing it you need to learn how to put some sort of business plan together so you can get finance in place to get your machines (going in to the bank manager and telling him your selling point is going to be undercutting other peoples prices is not going to be very successful).

Consider working for a contractor or a big farmer for a year or two to get some experience, or even maybe travelling abroad and doing something like a harvest with the custom cutters in the USA.

bk1991

nilhg wrote: »

Do your year in Ag college and enjoy it, you're only 18, keep your options open for a while before you decide to go contracting on your own. If you are hell bent on doing it you need to learn how to put some sort of business plan together so you can get finance in place to get your machines (going in to the bank manager and telling him your selling point is going to be undercutting other peoples prices is not going to be very successful).

Consider working for a contractor or a big farmer for a year or two to get some experience, or even maybe travelling abroad and doing something like a harvest with the custom cutters in the USA.

cheers for advice i will hopefuly do the harvest as work exqerence in 2nd yr
have u seen the dvd customcutters or done it
hedge cutting seams a good plan anyway and the septic tanks good 2

Bitten & Hisses

Number1: Don't try to get too big too quickly. You will end up going burst under a mountain of debt and your credit rating will be screwed for years to come.
OK, you've decided on a JD 6910. If I were you, I'd be looking at a hedgecutter and a baler/wrapper combi unit. That way, you can offer a full service with only one tractor/driver and the hedgecutting season is generally opposite to the silage season.

conor2949

Bk1991,

You'd really want to deeply consider how much debt you'd be getting into first off.

If your talking about spending big money upfront just to get the machinery, then you'd be lucky to secure financing for it. you hear it all the time how the banks just aren't lending. even if they do buy into your plan, they'll make you sign a personal guarantee, so if the company doesn't make the repayments, your personal assets can be seized to make up the shortfall.

then there's the issue of getting work locally. It seems fairly well catered for already apart from the hedge cutting which may be an opportunity for you. I think if you sit down with a good accountant and work through the sums, you will find it damn near impossible to justify cutting the rates. Machinery contracting is one of the quickest ways to blow money and make people go bust.

There is also the issue of getting paid. you can do all the work you like but if your not being paid on time then its pointless.

you could be waiting up to six months to get paid from some people.

I don't want to appear totally negative but i've seen so many of my clients go mad spending money and then end up out of their depth, up to their necks in debt and some of them are now facing their own homes being repossessed.

Also bear in mind that the advantage of limited liability when trading through a company is totally removed when you sign a personal guarantee.

and for what its worth, i'd def have the 6910 too. great machine and 50k box makes long spins that much quicker. left hand reverser for hedgecutting is a must.


Best of luck
C.

dryan

Check with the banks to see if they have any reposessions that they are looking to offload.

Heard of a lad looking to borrow money to buy a tractor. Bank told him that they would give him the dosh if he bought one of their machines. Ended up with a great tractor at a knock down price.
After he done the deal, he was asked if he was interested in buying a house!!

bk1991

again thanks for the advice buying a balerand wraper combi woulnt be an option as theres a load guys doin that in my area i have read last weeks farmersjournal abobt thetrailing shoe slurry spreader theres no one with one here so thats another option money is the big thing though
if i set up a limited company how does that work ?
what make and model of hedge cutter for a jd 6910 or jd6810 ???

bk1991

fig mclough

a ltd is a system where you only lose the money you put into the company ie your house or personal assets are not effected, i think?

Suckler

I was looking to get a similiar set up going, not contracting just a good set up for the farm. At the moment I'm working overseas and saving my money so I can buy without borrowing. Over borrowing is what got the country in this mess & I want to be sure that I never owe the bank huge sums of money. You're only 18, I'd do the college course and relax. Try and get work with any of the local contractors to get to know the in's and out's of the game. As previous posters said doing the work is one thing, getting paid is another. Also think of maintenance on the machinery. If the Clutch went on the tractor in the morning, you're income is stopped dead but your outgoings will jump. Having enough capital to cover this is also essential. I'd recommend going to aus / america and get experience out there. At 18 to be getting in to a hefty debt is a lot of pressure you wont be able to reverse over night.

Rujib1

dryan wrote: »

Check with the banks to see if they have any reposessions that they are looking to offload.

Heard of a lad looking to borrow money to buy a tractor. Bank told him that they would give him the dosh if he bought one of their machines. Ended up with a great tractor at a knock down price.
After he done the deal, he was asked if he was interested in buying a house!!

Urban myth I would say. It just does not work like that. If you want to buy a reposessed machine, you have to go through the auction process.

As for a guy going to a bank to borrow money to buy a machine, and the bank saying in this climate "yearra boy, here's a pile of dosh to buy one of this machines out the back there going rusty, and sure while you are at it at all, here's another €200k to take away that aul 3 bed semi in Ballymagash". :cool:

You must be reading too much MAMA ****e:eek:

R1

Bitten & Hisses

Rujib1 wrote: »

Urban myth I would say.

Bang on. It's always somebody a couple of steps removed from the person telling the story, too! I asked my bank manager on several occasions about buying repossessed stuff this year. When I eventually managed to get a straight answer from him, he said that the banks don't want to be seen selling machinery/cars/jeeps direct to customers, as they would be competing with normal machinery/motor dealers, who of course are their customers.

Box09

My advice would be not to go anywhere near contracting. It is a huge risk owing the bank lots of cash coupled with farmers owing you a lot of cash that cannot afford to pay you. You are only 18 - go to college and get a good job.

maidhc

Bitten & Hisses wrote: »

Bang on. It's always somebody a couple of steps removed from the person telling the story, too! I asked my bank manager on several occasions about buying repossessed stuff this year. When I eventually managed to get a straight answer from him, he said that the banks don't want to be seen selling machinery/cars/jeeps direct to customers, as they would be competing with normal machinery/motor dealers, who of course are their customers.

I know of stuff that didn't make it to the auction floor to be honest. Both were high end mercedes cars (a Brabus and GL to be precise)

JohnThomas09

bk1991 wrote: »

again thanks for the advice buying a balerand wraper combi woulnt be an option as theres a load guys doin that in my area i have read last weeks farmersjournal abobt thetrailing shoe slurry spreader theres no one with one here so thats another option money is the big thing though
if i set up a limited company how does that work ?
what make and model of hedge cutter for a jd 6910 or jd6810 ???

bk1991

i dont think you understand how the business world works.The banks ain't going to lend you the money until you have custom built up and you wont be able to build up enough custom with all the competiton in your area.In all good business plans you have to name your competitors.When the bank here of all the competiton they will decline.Also you have to consider your local bank may have loaned the money to some of the existing contractors to set up,what makes you think there going to take custom away from someone who already has a loan with them.e.g.If one of your competitors gets his finance through BOI they aren't going to give you money to set up and take custom form this guy.The banks would rather have one customer able to make their payments than have two customers cutting each others throats to be the cheapest and then not able to make their payments.Have you considered any of this?

Bitten & Hisses

maidhc wrote: »

I know of stuff that didn't make it to the auction floor to be honest. Both were high end mercedes cars (a Brabus and GL to be precise)

What route did they take from the bank to the customer?

Claasman

Suckler wrote: »

I'd recommend going to aus / america and get experience out there.

Dont mean to drag this off topic but you cant get into the states at the moment legally to work on a farm as Ireland has been struck off the list countries of applicants allowed in on the H2A visa, http://combineforums.proboards.com/index.cgi?board=employment&action=display&thread=11899

so your best bet in Australia, spent 10 months there working with big gear.
As for going contracting, i think you should get some more experience before jumping into a load of debt, there is no rush, is there...

maidhc

Bitten & Hisses wrote: »

What route did they take from the bank to the customer?

A scenic and poorly signposted one.

levallat

bk1991 wrote: »

firstof is under cut there pricies bk1991

This attitude is what'll be the main downfall of your business plan as the established contractors in your area will be in a much better position to undercut you for the couple of months that it'll take to send your fledgling operation to the wall, I started in agric contracting in the late 70's as my father had died and as eldest I had to keep the family and I decided that I was better off charging slightly more than the others but offering a better service as well such as lending the farmer my hay turner for the meadow I had just mowed for him and would be back in a couple of days to bale.
This principle has worked for me right up to present day and with 4 very different types of business.

JohnBoy

Bitten & Hisses wrote: »

What route did they take from the bank to the customer?

AIB have a yard in dublin for high end stuff, they dont send it to the auction houses. afaik anyone can walk in and make an offer on stuff, they just dont really advertise it.

search over on octane.ie, there's a thread somewhere about it, gives details and the yards location.

levallat

JohnBoy wrote: »

AIB have a yard in dublin for high end stuff, they dont send it to the auction houses. afaik anyone can walk in and make an offer on stuff, they just dont really advertise it.

search over on octane.ie, there's a thread somewhere about it, gives details and the yards location.

This is correct, they also have one in Belfast cause my bank manager was dealing in Bmw, Mercs and Audi's which he got there at very good prices using a loan from the bank to pay for them then when anyone came into the branch for a car loan for a top end motor they were offered a good deal as he was able to sell these at approx 6k under book.

John_F

just wait and ask yourself is it to make money or to drive tractors you want to do this, theres a fair bit of competition by the sounds of it, and by under cutting the other contractor may get you work but not too many friends where you need them e.g. mechanics or parts people looking for money and hear your working for half nothing???

not too into the machinery side of things so i could be wrong, good luck though