Keys to Success in Excavation and Demolition

Introduction

• Guest: 19-year-old entrepreneur in excavation and demolition.
• Revenue: From $200,000 in the first year to $5 million in the second year.
• Business Model: No marketing team, relies on word-of-mouth and relationships.

Business Operations

• Process:
  • Demolition, cleanup, preparation for new foundation, pouring foundation.
  • Additional work includes pipe work, sewer, water, and footing drains.
• Machine Costs:
  • Invested in machines like the 245 Hitachi ($300k) and a smaller used machine ($160k after payments).
  • Financing often available with 0% interest rates if you have a good credit score.

Background and Influence

• Personal Background:
  • Immigrant background, started with woodworking, then moved into fencing before excavation.
  • Influenced by family, especially a goal-driven mother.

Starting in Excavation

• Initial Projects:
  • Started with grading, landscaping, and small projects.
  • First major project was demolition and excavation for residential homes.
• Customer Acquisition:
  • Initially used Thumbtack and networking.
  • Success in the industry relies more on word-of-mouth and reputation than PPC or door-knocking.

Networking and Credibility

• Building a Network:
  • Key relationships should be with vendors, employees, contractors, builders, GCs, and city officials.
  • Word-of-mouth and reputation are crucial for continued business without online presence.

Financial Growth

• Revenue Growth:
  • Year one: $160k, Year two: $1.9 million.
  • Current projections: $5.5 - 6 million.
• Impact of Faith:
  • Entrepreneurial journey linked with faith, strong support from church community.

Key Projects and Services

• Major Projects:
  • Community developments up to $900k in excavation work.
  • Focus also on high-risk projects like utility work on roads.
• Profitability Focus:
  • Road and utility work are the most profitable due to high risk.

Hiring and Management

• Team Structure:
  • Started hiring from the get-go, currently around 22 employees.
  • Each project has its own foreman; emphasis on training new hires.
• Compensation:
  • Laborers start at $25-$27/hr, with pay increases as skills develop.

Equipment and Finance

• Purchasing Strategy:
  • Prefer buying new equipment to avoid maintenance issues.
  • Leasing options available for those starting out.

Personal Development and Advice

• Mentorship and Learning:
  • Mentors from the industry were pivotal in learning business operations.
  • Building relationships with seasoned professionals for advice and learning.
• Business Philosophy:
  • Focus on building trust and delivering quality work.
  • Decisions were influenced by personal faith and community support.

Challenges and Future Outlook

• Common Mistakes:
  • Over-investing in equipment without maintaining adequate operating capital.
• Future Aspirations:
  • Continue growth, possibly expanding into freeway work.
• Balance with Education:
  • Balances business with pursuing a degree in computer science.

Conclusion

• Entrepreneurial Mindset:
  • Emphasizes risk-taking, problem-solving, and relationship-building.
  • Encourages learning from experiences and leveraging community relationships for business growth.