Do you want to start a skid steer business? If YES, here is a 20-step guide on how to start a skid steer business with no money or experience.
The Pallet & Skid Steer industry is made up of businesses that primarily rent pallets and skids to downstream markets for the storage and transportation of goods. Following use, pallets and skids are returned to industry operators for cleaning and repairs.
Though pallets and skids differ slightly in their construction and purposes, the terms are largely interchangeable. To start this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you.
Next is to write a business plan for your skid steer business. You will also need to pay a visit to the regulatory bodies in your country to get all the information you need before you can legally open your own skid steer loader business in your city.
You can start your skid steer loader company business from a small town in the United States and if you are good at what you do, it won’t be too long before your brand becomes a nationally recognized brand especially if you go into franchising.
Steps to Start a Skid Steer Business and Make Money
Table of Content
- Conduct Market Research and Feasibility Studies
- Decide Which Niche to Concentrate On
- Know Your Major Competitors in the Industry
- Decide Whether to Buy a Franchise or Start from Scratch
- Discuss with an Agent to Know the Best Insurance Policies for You
- Protect your Intellectual Property with Trademark, Copyrights, Patents
- Get the Necessary Professional Certification
- Get the Necessary Legal Documents You Need to Operate
- Raise the Needed Startup Capital
- Choose a Suitable Location for your Business
- Hire Employees for your Technical and Manpower Needs
- Write a Marketing Plan Packed with Ideas & Strategies
- Work Out a Reasonable Pricing for your Services & Products
- Develop Iron-clad Competitive Strategies to Help You Win
- Brainstorm Possible Ways to Retain Clients & Customers
- Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Understand the Industry
It is important to note that a skid-steer loader can sometimes be used in place of a large excavator by digging a hole from the inside. The skid loader first digs a ramp leading to the edge of the desired excavation. It then uses the ramp to carry material out of the hole. The skid loader reshapes the ramp making it steeper and longer as the excavation deepens.
This method is particularly useful for digging under a structure where overhead clearance does not allow for the boom of a large excavator, such as digging a basement under an existing house. Several companies make backhoe attachments for skid-steers.
These are more effective for digging in a small area than the method above and can work in the same environments. Other applications may consist of transporting raw material around a job site, or assisting in the rough grading process.
The Pallet & Skid Steer industry is indeed a large and vibrant industry. Statistics has it that the industry in the United States of America is worth about $3 billion, with an estimated growth rate of 2.6 percent between 2015 and 2020. There are about 816 registered and licensed pallet and skid steer businesses in the United States and they are responsible for employing about 10,308 people.
In the United States, the companies holding the largest market share in the Pallet & Skid Steer industry are Brambles Limited, PECO Pallet, PALNET LLC, and iGPS Logistics LLC, but even at that, the industry is still very much open for competition from aspiring investors who would want to launch their own skid steer business.
A recent report published by IBISWorld shows that the Pallet and Skid Rental industry has experienced substantial growth over the five years to 2020, benefiting from a rising number of businesses opting to rent third-party pallets rather than maintain their own fleets.
Government regulations and company safety requirements have also forced many downstream clients to use certain types of pallets.
In turn, rather than invest capital in the purchase of new pallets, many companies have turned to operators in the Pallet and Skid Rental industry. Demand for this industry’s services is also largely driven by the volume of freight being transported within the US economy.
As a result, the industry has benefited from improving US economic conditions, which have encouraged consumers to spend. Going forward, the Pallet and Skid Rental industry are expected to fully benefit from positive conditions in downstream markets.
To sum up, it is a fact that the Pallet & Skid Steer industry is indeed a profitable industry to venture in despite the fact that the entry bar for starting the business is not too difficult to scale through.
The truth is that if a skid steer business is well-stocked with a wide array of pallets and skid steer loaders and also well positioned in an environment with the right demography, they will surely attract regular clients and their skid steer loaders will be well hired on a regular basis.
Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who patronize skid steer loader companies cut across players in the construction industry, production factories, shipping and logistics companies, and of course mechanized farmers.
In essence, your target market can’t be restricted to just the construction industry, but all those who need the services of skid steer loader companies.
So, if you are thinking of launching your own skid steer loader business then you should make your target demographics all-encompassing, you can partner with general contractors who are active players in the construction value chain.
Decide Which Niche to Concentrate On
Most skid steer loader companies tend to provide a wide range of services as it relates to digging holes and trenches in construction sites, transporting building and raw material around construction sites and production factories, and assisting in the rough grading process in construction sites et al.
That is why it seems that there are no niche areas in the industry. But on the other hand, players in the industry may decide to specialize in any or all of the following;
- Digging holes and trenches in construction sites, transporting building and raw material around construction sites and production factories, and assisting in the rough grading process in construction sites et al
- Engage only in pallets and skid steer loaders rental services
The Level of Competition in the Industry
The competition that exists in the Pallet & Skid Steer industry goes beyond competition amongst skid steer loaders companies; you will be expected to compete with other players in the value chain of the construction industry such as heavy-duty equipment and machinery rental companies.
So, it will be right to say the competition in the skid steer loaders line of business is tough. The truth is that no matter the level of competition in an industry if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry.
Just ensure your skid steer loaders and trucks are always in top shape, your workers are well–trained, your customer care services are top notch and you know how to attract and reach out to your target market.
Know Your Major Competitors in the Industry
Here are some of the most popular skid steer companies in the United States of America;
- Brambles Limited
- PECO Pallet
- PALNET LLC
- iGPS Logistics LLC.
When it comes to starting a skid steer company, you just have to get your feasibility studies and market research right before venturing into the business.
Starting this kind of business definitely entails that you raise plenty of capital because you will need capital to purchase the first set of standard skid steer loaders and trucks or at least to finance the purchase of the first set of standard skid steer loaders and trucks.
On the other hand, if you cannot, you may want to consider pulling the resources from family and friends. Depending on the scale at which you want to start from, you might require as much as multiple thousands of dollars to strike this off.
You will be expected to hire experts that will help you with comprehensive economic analysis and the profitability of the business within the location where you intend to launch the business. If you get your economic and cost analysis right before launching the business, you may not have to stay long before you break even.
Decide Whether to Buy a Franchise or Start from Scratch
When it comes to starting a business of this nature, it will pay you to buy the franchise of a successful skid steer loader company/brand as against starting from scratch. Even though it is pretty rare and expensive to buy the franchise of a skid steer company, it will definitely pay you in the long run.
But if you truly want to build your own brand, then you can start your own skid steer company from the scratch. The truth is that it will pay you, in the long run, to start your skid steer loader company from the scratch. Starting from scratch will afford you the opportunity to conduct thorough market surveys and feasibility studies before choosing a location to launch the business.
Please note that most of the big and successful skid steer companies around started from scratch and they were able to build a solid business brand. It takes dedication, hard work, and determination to achieve business success.
Know the Possible Threats and Challenges You Will Face
If you decide to start your own skid steer loader company today, one of the major challenges you are likely going to face is the presence of well–established skid steer loader companies and also heavy-duty equipment and machinery rental companies who are offering the same services that you intend offering. The only way to avoid this challenge is to create your own market by concentrating on startup construction companies.
So also, if you are conversant with the construction industry and of course the rapid advancement of technology, you will notice that construction equipment can become obsolete within a short period of time. Besides, since the service life of a skid steer loader is 5,000 hours, many legacy machines will be due for replacement soon and that is perhaps one of our major threats.
Some other threats that we may likely face as a skid steer loader company operating in the United States are unfavorable government policies, the arrival of a competitor within your location of operations, and of course a sharp drop in the prices of the skid steer loaders that we put out for leasing and rental.
Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
If you are considering starting a skid steer loader company, the legal entity you choose will go a long way to determine how big the business can grow.
Generally, you can either choose a general partnership, or a limited liability company which is commonly called an LLC for your skid steer loader company. Ordinarily, the general partnership should have been the ideal business structure for a small-scale skid steer company especially if you are just starting out with moderate start-up capital.
But if your intention is to grow the business and have clients both corporate and individual from all across the United States of America, then choosing a general partnership is not an option for you. Limited Liability Company, LLC will cut it for you.
Choose a Catchy Business Name from the Ideas Below
Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend to operate from when naming their business.
If you are considering starting your own skid steer loader business in the United States of America, here are some catchy names that you can choose from;
- Grade A® Skid Steer Loaders, LLC
- Kelvin Bright® Skid Steer Loaders Rental Services, Inc.
- Leverage© Skid Steer Loaders, LLC
- Peter Panders™ Skid Steer Loaders Rental Services, Inc.
- Joab Stanley® Skid Steer Loaders Rental, LLC
- Blue Strides™ Skid Steer Loaders Group
- Terry Moore© Skid Steer Loaders Rental Services, LLC
- Alpha Plus® Skid Steer Loaders Rental, LLC
- Andrew Ownes® Skid Steer Loaders Rental Services, Inc.
- Jon Hensen® Skid Steer Loaders, Inc.
- Red Star© Skid Steer Loaders Rental Services, Inc.
- Don Pedro® Skid Steer Loaders Rental Services, Inc.
Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here are some of the basic insurance policies that you should consider purchasing if you want to start your own skid steer loader company in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers’ compensation
- Commercial Hull Insurance
- Physical Damage Insurance
- Uninsured or Underinsured Motorist
- Motor vehicle insurance (comprehensive insurance)
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
You can contact the following leading insurance companies in the United States of America to purchase the needed insurance policies for your skid steer loader business;
- Allstate Insurance Group
- Liberty Mutual
- Progressive Insurance Group (PGR)
- Health Care Service Corporation (HCSC)
- New York Life Insurance Company
- Lincoln National Life Insurance Company
- MassMutual (Massachusetts Mutual Life Insurance Company)
- Northwestern Mutual Life Insurance Company
Protect your Intellectual Property with Trademark, Copyrights, Patents
If you are considering starting your own skid steer loader company, usually you may or may not have any need to file for intellectual property protection/trademark.
This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties. But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
Get the Necessary Professional Certification
Aside from the results you produce, professional certification is one of the main reasons why some skid steer loader companies stand out. You are strongly encouraged to pursue professional certifications; it will go a long way to show your commitment to the business.
These are some of the certifications you can work towards achieving if you want to run your own skid steer loader company;
- Level I Professional Operator Certification
- Level II Professional Operator Certification
- Level III Professional Operator Certification
- Skid Steer/Bobcat Training Certification.
Please note that in most cases, certification is earned through the demonstration of skills by completing established operational tasks to Caterpillar standards.
Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentation. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Business License
- Skid Steer Loaders Operator’s Registration
- Appropriate driver’s licenses for drivers (Commercial driver’s license (CDL)
- Assistant’s licenses for assistants
- Proof of ownership, proper identification, and vehicle license
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
Raise the Needed Startup Capital
Starting a skid steer loader company is indeed a capital-intensive business hence entrepreneurs willing to start the business ensure that they raise the required startup capital from all available legal means. When it comes to financing a business, one of the first things you should consider is to write a good business plan.
If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors, and your friends to invest in your business. Here are some of the options you can explore when sourcing startup capital for your skid steer loader company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank
- Source for soft loans from your family members and your friends.
Choose a Suitable Location for your Business
Choosing a location for a skid steer loader company can be in two phases. Firstly, it must be located in a city that has a need for such services and also in a city that has ongoing construction works. So also, you are expected to secure an administrative office in a visible and busy location.
It cannot be overemphasized that the location you choose to open your skid steer loader company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and organization with the required purchasing power and lifestyle.
If you make the mistake of renting or leasing a facility for your skid steer loader company in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more on promoting the business and perhaps giving direction to potential clients.
It is important to note that a business facility in a good location does not come cheap hence you should be able to allocate enough funds for leasing/renting in your budget. If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor.
Having said that, these are some of the cities in The United States of America where you can locate your skid steer loader company;
- San Francisco, California
- New York City, New York
- Nevada, Las Vegas
- Seattle, Washington
- Dallas, Texas
- Oregon Florida
- Washington, District of Columbia
- Boston, Massachusetts
Hire Employees for your Technical and Manpower Needs
On average, there is no special technology or equipment needed to run this type of business except for well-equipped skid steer loaders (soundproofing, adjustable controls, rearview and/or backup cameras, sealed and pressurized cabs, digital readouts and interfaces, adjustable seats, heated seats, hands-free capabilities for making phone calls, and software applications.
You will also need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
When it comes to choosing between renting and leasing an office space, the size of the skid steer loader company you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a standard skid steer loader company, then you should consider the option of leasing a facility for your office; when you lease, you will be able to work with long-term planning, structuring, and expansion.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision.
Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Skid Steer Loader Rental Manager, Professional Skid Steer Operators and Drivers, Skid Steer Loader Operator Assistant, Accounting Officer, Business Development Executive/Marketing Executive, and Customer Service Officer or Front Desk Officer.
Over and above, you would need a minimum of 10 to 20 key staff to effectively run a medium-scale but standard skid steer loader company.
Please note that you would need the services of servicing and maintenance engineers. If you are just starting out you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you. Hence you are expected to contract out some roles.
Service Delivery Process of the Business
On average, the way skid steer loader companies work varies from one company to another company, but ideally, a skid steer loader company is expected to first and foremost hire highly skilled and licensed skid steer operators and drivers with commercial driver’s license, get their skid steer loaders and trucks and services available for hire and then once a client rent or book their services, they deploy both men and resources to the site to carry out the contract.
Please note that skid steer loaders are usually involved in operating, leasing, and renting a wide range of skid steer loaders that are used in place of a large excavator by digging a hole from the inside in construction sites and also services such as transporting raw material around a job site, or assisting in the rough grading process in construction sites and plowing snow et al.
It is important to state that a skid steer loader company may decide to improvise or adopt any business process and structure that will guarantee them, good return on investment (ROI) efficiency and flexibility; the above-stated business cum services process is not cast on stone.
Write a Marketing Plan Packed with Ideas & Strategies
As a skid steer loader company, you would have to prove your worth over and over again before attracting high-profile clients, especially in the construction industry. So, if you have plans to start your own skid steer loader company it will pay you to build first build a successful career in the pallet and skid steer industry.
People and organizations will hire your services and skid steer loaders and trucks if they know that they are going to get value for their money.
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience in Pallet & Skid Steer industry, it is important to clearly state what you have been able to achieve in time past.
This will help boost your chances in the marketplace. Here are some of the platforms you can utilize to market your skid steer loader company;
- Introduce your business by sending introductory letters alongside your brochure to construction companies, production factories, shipping and logistics companies, mechanized farmers, and players in key industries amongst others with your location of operations
- Advertise your services in community-based newspapers, local TV and radio stations
- List your business and products on yellow pages ads (local directories)
- Leverage the internet to promote your skid steer loader company
- Engage in direct marketing and sales
- Encourage the use of word-of-mouth marketing (referrals)
- Leverage the internet to promote your business
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing for you.
Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you offer your services and rent out your skid steer loaders at a price that is highly attractive is to ensure that you source your capital from sources that will give you reasonable interest and payment plans and also purchase cheaper and reliable skid steer loaders and pallets.
Another strategy that will help you offer your skid steer loader services at the right price is to ensure that you cut operational costs to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save costs, it will also help you get the right pricing for your products and services.
So also, if you are able to secure a business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course, maximize profits from your business.
Develop Iron-clad Competitive Strategies to Help You Win
The Pallet & Skid Steer industry is a competitive industry, and you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to continue to provide highly reliable skid steer loaders and highly trained staff members.
Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always.
If your customers are satisfied with your products and service delivery, they can hardly source alternative service providers.
If your services and customer service fluctuate, you are likely going to struggle to get your customers to retain your services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeat sales from them and also attract new customers.
Part of what you need to do to achieve this is to track progress, results, or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk SMS and customized emails and above all, you can easily receive compliance and feedback from them).
Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever society portrays your business to be.
One of the secrets of larger corporations is that they are willing to spend good money year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand-boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage to boost your brand and create a corporate identity for your skid steer loader company;
- Place adverts on both print (newspapers and construction-related magazines) and electronic media platforms
- Sponsor relevant community-based events/programs
- Leverage the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your skid steer loader company
- Install your Bill Boards in strategic locations all around the locations where you operate
- Distribute your fliers and handbills to target areas
- List your skid steer loader company in local directories/yellow pages
- Advertise your skid steer loader company on your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the locations where your skid steer loader company operates.
- Ensure that all your staff members wear your branded shirts and all your skid steer loaders, pallets, and trucks are well branded with your company logo et al.