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/biz/ - Business & Finance

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315858 No.315858[DELETED]  [Reply] [Original]

/biz/, what are the realistic pros and cons to investing in heavy machinery?

I have about $100k that I would like to use to purchase a Bobcat S590 and maybe something else similar to use in a business to clear land, etc.

Anyone have any experience with this? They cost about $40-50k each, but the going rate in my area for this kind of work is $100-150/hr. I think I might be able to make some cash this way but would love to hear some opions.

Thank you.

>> No.315863

Heavy machinery, like any capital goods investment, you kinda need to know what the fuck you are doing to try this.

If you buy one enormous fucking bucket-excavator doom machine, you drastically impact the world market in such a thing immediately, as every single potential buyer of such a product will know the status of every single widget of that type in existence in the entire market.

Ok, so I'm off topic, I love the capital goods market, but the thing you have barely counts. You have a piece of equipment you can easily buy or sell. You might consider leasing or renting that thing.

>> No.315873

>>315863
>have to know what you're doing
I own a couple of tractors right now, but they are for agricultural use, they wouldn't be efficient enough to turn a profit when it comes to clearing brush, construction sites, etc.

However, like I said, about 15 years experience with heavy machinery.

>Consider renting/leasing
I would, however the cost to lease from the local companies that do this is pretty high. I would have to work my ass off and in the end it would net me about 30% of what I would make owning one.

At $45k for a new model, I could probably put down only 20k and finance the rest, easily making the payments from the profit the machine itself earned. At least that's how I have calculated it.

I would also be looking into purchasing a second bobcat or a bull dozer so that I could be doing multiple jobs at once or complete the same job in less time if the need arose, but that would be after maybe 5-6 months of testing the waters and getting the original machine finished.

I have taken into account creating a website, hosting that on my own server, the upkeep, advertising, etc.

What exactly is the capital goods market? I've never heard this term, as I am pretty uneducated.

>> No.315907

>>315858

The only heavy machine someone like you should buy is a semi-truck.

Plenty of work, consistent as shit, paying well, all while requiring little actual knowledge about how to build shit or clear waste.

Heavy machines are for people who can afford employees, anyone else just rents their tools.

>> No.315922

>>315858
Get a machine that drills wells

>> No.315927

>>315907
I thought about that but the trucking business kind of sucks to do.

>>315922
What machine would do that?

>> No.315939

>>315858
>I bought this thing. What do I do with it.


You should probably approach your business venture from the reverse perspective.

>> No.315946

>>315939
I haven't purchased it yet, I'm wondering if there are any people in the business with advice.

>> No.317012

Don't go out and buy something with this half-formed business idea in mind.

rent a bobcat and work a dozen jobs. Do the numbers still work out? Do you have the customers? How loyal are they? Do you have the work to make a living at it?

>> No.317043

>>315873
>However, like I said, about 15 years experience with heavy machinery.

If you can operate the thing yourself and do contract work with it, then that makes this much less risky. If you can get insurance on it that will allow you to rent it to others (without eating up all the money you've made with it), I say go for it.