Starting a skid steer business is an exciting venture that combines hands-on operational skill with sharp business savvy. The market for these versatile machines is a multi-billion dollar industry, with steady demand for services like grading, excavation, and material handling across construction, landscaping, and agriculture.
This guide will take you through the practical steps of validating your business concept, securing funding, acquiring the right equipment, and obtaining the necessary permits to help you launch a successful skid steer business in the U.S.
Step 1: Validate your business plan
Research your local market
Start by identifying your target customers. Talk to general contractors, property managers, and landscaping companies in your area. Ask them what services they hire out and what rates they currently pay. This direct feedback is more valuable than generic online data.
You can also review public records for construction permits at your county clerk’s office. This shows you who is building and where. A common misstep is assuming demand exists without confirming it. Your goal is to find a specific, unmet need in your local area.
Estimate your startup costs
A realistic budget is foundational. Your initial investment will likely range from $35,000 to $70,000. Many new owners make the mistake of buying a brand-new machine, which adds unnecessary financial pressure. A reliable used machine is a smarter start.
Here is a typical breakdown of initial expenses:
- Used Skid Steer: $25,000 - $45,000
- Heavy-Duty Trailer: $5,000 - $10,000
- Basic Attachments (bucket, forks): $2,000 - $5,000
- Annual Insurance Premium: $3,000 - $6,000
- Business Registration & Licensing: $500 - $1,500
Here are 3 immediate steps to take:
- Call three local contractors to discuss the services they need.
- Create a spreadsheet to budget for your specific equipment and administrative costs.
- Get a preliminary quote from an insurance agent specializing in commercial equipment.
Step 2: Set up your legal structure and get licensed
Choose your business structure
You should consider forming a Limited Liability Company (LLC). It protects your personal assets if something goes wrong on a job. This separates your house and savings from business debts and lawsuits.
An LLC also offers tax flexibility. Profits pass to your personal tax return, which simplifies paperwork. A mistake some owners make is operating as a sole proprietor, which offers zero liability protection for your personal assets.
Secure the right permits
Once you file your LLC with your Secretary of State (costs are $50 to $500), get a federal Employer Identification Number (EIN). It is free from the IRS website and takes just minutes to obtain.
Next, get a state business license. You should also check if you need a contractor's license for excavation or grading. Your state's contractor board website will have the specific rules and financial thresholds.
Finally, your city or county requires its own business license. This usually costs between $50 and $200 annually. Start this process early, as approvals can take several weeks.
Here are 3 immediate steps to take:
- Register your LLC with your state's Secretary of State.
- Apply for a free Employer Identification Number (EIN) on the IRS website.
- Check your state's contractor licensing board website for specific license requirements.
Step 3: Manage your insurance and risk
Your first priority is a General Liability policy. Most contractors will not hire you without at least $1 million in coverage. This protects you if you damage property. A $2 million policy offers more security and is often preferred for larger commercial jobs.
Next, you need Inland Marine insurance. This is not for boats. It covers your skid steer and attachments while they are on a job site or in transit. A common mistake is to assume your commercial auto policy covers the machine on the trailer. It does not.
You will also need a Commercial Auto policy for your truck and trailer. If you plan to hire help, you must have Workers’ Compensation insurance. This is a legal requirement in nearly every state and covers employee injuries on the job.
Find a specialized insurance provider
You might want to work with an agent who focuses on construction. They understand the specific risks of skid steer work, like striking underground utilities. A general agent might sell you a policy with exclusions that leave you exposed during excavation or grading work.
Annual premiums for a comprehensive package typically run from $4,000 to $8,000. Consider getting quotes from providers like Next Insurance, The Hartford, or a local agent known for handling contractor policies. They can bundle the coverage you need.
Here are 3 immediate steps to take:
- Request quotes for a $1 million general liability and an inland marine policy.
- Contact an insurance agent who specializes in construction or heavy equipment.
- Ask a few potential clients what their minimum insurance requirements are before you buy a policy.
Step 4: Secure your location and equipment
Find a suitable yard
You will need a place to park your truck, trailer, and skid steer. Look for a small yard, around a quarter-acre, zoned for light industrial or commercial use. This prevents issues with city ordinances. Many new owners try to save money by parking at home, which can lead to zoning fines.
When you negotiate a lease, you might ask for a one-year term with an option to renew. This gives you flexibility if you outgrow the space or find a better location. Also, confirm you can store heavy equipment on the property.
Purchase your core equipment
Beyond the skid steer and trailer, your attachments determine what jobs you can take. A grapple bucket for clearing brush ($2,000-$4,000) and an auger for digging post holes ($2,500-$5,000) are good additions. You can find these from suppliers like Titan Attachments or Skid Steer Solutions.
A mistake is to buy every attachment you think you might need. Instead, rent specialized attachments for your first few jobs. This lets you confirm there is a market for that service before you commit thousands of dollars to the purchase.
Here are 3 immediate steps to take:
- Search online commercial real estate listings for quarter-acre industrial lots.
- Contact an equipment dealer like Titan Attachments to price a grapple bucket.
- Identify a local equipment rental shop and get their rates for an auger attachment.
Step 5: Set up your payment processing
Define your payment terms
For smaller residential jobs, expect payment upon completion. With larger commercial clients, Net 30 terms are common. You might want to require a 25-50% deposit before starting any major project. This helps cover your initial fuel and material costs.
Many new owners make the mistake of only accepting cash or checks. This can cost you jobs. To appear professional and make it easy for customers to pay you, you should accept credit and debit cards, especially for on-site payments.
Choose a payment solution
For a skid steer business that needs to accept payments on-site, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and you are done. Other providers often charge 2.5% to 3.5% plus fees.
At just 1.99% per transaction with no hidden costs or extra hardware needed, it is particularly useful for collecting a deposit right after you win a bid. You can also secure final payment the moment a job is finished, right there on the spot.
Here is how you get paid with JIM:
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available right on your JIM card as soon as the sale is done. There is no waiting for bank transfers.
Here are 3 immediate steps to take:
- Decide on your standard payment terms, including deposit amounts for large jobs.
- Compare JIM’s 1.99% rate against other mobile payment options.
- Download the JIM app to see how it works on your phone.
Step 6: Fund your business and manage finances
Secure your funding
An equipment loan is often the most direct path to your first machine. Lenders typically offer rates between 7% and 15% for qualified buyers. The skid steer itself serves as collateral, which can make approval easier than for an unsecured loan.
You might also look into Small Business Administration (SBA) programs. The SBA Microloan program offers up to $50,000 and is great for startups. A good business plan and a personal credit score over 680 will improve your chances of approval.
Some new owners make the mistake of using personal credit cards to cover startup costs. This approach mixes personal and business finances and comes with high interest rates. It is better to establish separate business credit from the start.
Plan your working capital
Beyond the equipment, you need cash to operate. This is your working capital. It covers fuel, insurance premiums, and maintenance for the first few months. It also ensures you can pay yourself before client payments start rolling in.
You should budget for at least $15,000 to $25,000 in working capital for your first six months. This financial cushion allows you to be selective with jobs and avoid low-profit work just to generate cash flow, especially while you wait on Net 30 payments.
Here are 3 immediate steps to take:
- Contact your bank to ask about their equipment loan requirements.
- Research the SBA Microloan program on the official SBA website.
- Calculate your estimated operating costs for six months to find your working capital number.
Step 7: Hire your first operator and set up operations
Hire your first operator
When you are ready to expand, your first hire will likely be a Skid Steer Operator. This person runs the equipment, performs daily maintenance checks, and communicates with clients on-site. Expect to pay a qualified operator between $22 and $28 per hour, depending on their experience.
Look for candidates with an OSHA 10-hour construction safety certification. Some new owners hire based on a resume alone, only to find the operator is not familiar with their machine's controls. Always include a hands-on skills test as part of your interview process.
Set up your daily operations
To manage your schedule, you might want to use software like Jobber or Housecall Pro. These platforms help you track jobs and dispatch your operator. When you are just starting, a shared digital calendar can also work perfectly well to keep things organized and avoid double-bookings.
As you grow, aim to keep your operator payroll between 30% and 40% of your gross revenue. This is a healthy benchmark for profitability. Also, create a simple daily pre-start inspection checklist for your machine. This small step helps you catch maintenance issues before they cause expensive downtime.
Here are 3 immediate steps to take:
- Draft a job description for a Skid Steer Operator with a pay range of $22-$28 per hour.
- Check the OSHA website for details on the 10-hour construction safety course.
- Review scheduling software like Jobber to see how it could organize your jobs.
Step 8: Market your business and get customers
Establish your local presence
Your first customers will likely come from your immediate area. You should set up a Google Business Profile right away. Get it verified, upload photos of your machine, and list your services. This is the modern phone book for local service businesses.
You might also create a simple one-page website. It just needs to show your services, contact information, and photos of your work. This gives you a professional link to share with potential clients and adds a layer of legitimacy when you bid on jobs.
Use direct outreach to find work
Do not just wait for the phone to ring. You should visit active construction sites and introduce yourself to the site foreman. Have business cards ready. This direct approach builds relationships that lead to jobs. Your initial customer acquisition cost is just your time.
You can also join local Facebook groups for contractors and community members. People often post there looking for excavation or grading help. A quick, professional response can land you a job the same day. Many new owners overlook these free lead sources.
Here are 3 immediate steps to take:
- Set up and verify your Google Business Profile with at least five photos.
- Visit two local construction sites to introduce yourself to the site foreman.
- Join one local contractor or community group on Facebook to monitor for leads.
Step 9: Set your pricing strategy
Determine your pricing model
Most skid steer work is billed hourly. A typical rate is $85 to $125 per hour, with a two-to-four-hour minimum. You can also offer a day rate, around $600 to $900 for an eight-hour day. For larger projects like lot clearing, a fixed-price bid might be better.
Many new owners simply copy a competitor's price. This is a mistake because you do not know their cost structure. You must first calculate your own breakeven point to ensure every job is profitable. Your pricing should reflect the value you provide, not just the time spent.
Calculate your costs and profit
Your hourly rate must cover all expenses plus profit. Add up your operator's wage, fuel, insurance, and a fund for maintenance and repairs. For example, if your total hourly cost is $65, a rate of $95 per hour gives you a $30 profit, a margin over 30%.
To find competitor rates, you can call them and ask for a quote on a small job. Also, check their websites or profiles on service directories. This gives you a baseline for your market, but your own costs should be the final guide for your pricing.
Here are 3 immediate steps to take:
- Call three local competitors to ask for their hourly rates and minimum charges.
- Calculate your total hourly operating cost, including fuel, insurance, and maintenance.
- Create a simple rate sheet with your hourly, daily, and minimum service fees.
Step 10: Maintain quality and scale your operations
Establish your quality standards
Define what quality means for your business. This includes leaving a job site cleaner than you found it and completing a final walk-through with the client. These small details build your reputation and lead to referrals.
To measure your performance, you can track your callback rate. If you have to return to fix work on more than 5% of your jobs, it is time to review your process. Also, monitor customer reviews on your Google Business Profile for direct feedback.
Know when to grow
Growth should be data-driven. Some owners get ahead of themselves and buy a second machine too soon, which strains cash flow. A good benchmark is to wait until your skid steer is booked over 80% of the time for two consecutive months.
Once you are consistently scheduled 3-4 weeks out, it is time to hire another operator. This allows you to take on more work without turning down profitable jobs. As you add people, software like Jobber or LMN can manage scheduling for multiple crews.
Here are 3 immediate steps to take:
- Create a simple job completion checklist for your operators to follow.
- Track your machine's utilization hours for the next 30 days.
- Review the multi-crew features on a platform like Jobber or LMN.
You now have the steps to build a successful skid steer business. Your reputation for leaving a site clean and communicating clearly will win you more jobs than any advertisement. You have a solid plan, now go make it happen.
And when you complete that first job, make getting paid simple. JIM turns your phone into a card reader, so you can accept payments on the spot for a flat 1.99% fee with no extra hardware. Download JIM to get started.
