Starting a Stump Grinding Business: Real Startup Costs, Buried Traps & Profit Reality

0:00Stump grinding. I can't wait to get into this one and you guys were right. A lot of people really tagged onto the stump grinding and they kind of wanted to know more about it. I can see why. This is very intriguing. I was pretty amazed by this business model. I can't wait to share it. If you're thinking of getting into stump grinding, I decided to put this video together to kind of break down the business sector of what that is. Is it profitable? Is it worth

0:20getting into? Does it have easy entry? But let me just start by actually saying I got pretty excited about this one. I had a ton of feedback across all the platforms on this particular subject. So, if you are in fact starting this business or have been doing it for a while, and I know somebody has been doing it for a while, so definitely bring your knowledge into the mix and

0:38let anybody know if I missed something. So, I'm always going to go ultra-conservative on my numbers. I want to go higher because I'd rather plan on worst-case scenario. I've done that in business for years. It's always kind of kept me above water. So, with what I'm doing here is just knowledge that I've had to research by actually calling a couple of stump grinders and I actually got some information. So, it was very, very interesting and I've got some good stuff coming at you right now. So, first section, as you can see up on the screen. So, we're going to kind of talk about I guess this particular segment is easy

1:06to get into. Uh you've got some licensing and insurance that you have to do, but all overall it's it's easy entry. You have not too much travel time, so you're not looking at going across country. We just have to look and make sure that is it profitable? And I do think it is as long as it's not overly saturated and depending on the time of year. But I've gone through some marketing ideas. I've actually throwing in a couple of different ideas in here that might actually help you if you're thinking about getting into it. So, average residential ticket that I could find based on the people the calls that I had

1:35made and then research basically across the country. So, I'm going to go with kind of unilateral numbers. It might differ in your area, so keep that in mind. But basic median ticket or I guess job price is coming in at about $275. Really not too bad. So, the pricing, [clears throat] and this was interesting. I found this out. So, pricing is $3 to $5 for every diameter

1:56inch. When I say when I first read that, I was thinking exactly the stump. You actually want to quote for the roots as well. So, if you've got a 16-in diameter stump, you want to actually quote for that 20 or 30 in for the roots that are coming up above ground. This will allow you to actually have a decent price every time you hit. And to be honest, I'm going to get into this in a minute, I wouldn't even drop the gate of bringing down that stump grinder for anything less than 120 to 150 for a stop. So, keep that in mind. You are still paying for fuel, your time,

2:26everything else. So, um your minimum trip should be about 150. And I think that by measuring out that flare, as they call it, that's going to be your key to making sure that you bid this properly. So, couple of different things I want to talk about. So, you've got a manual walk-behind stump grinder. And these things look like they were priced anywhere between 3,500 and 7,500 dollars, depending on if it was

2:49used or brand new. There is no shock absorption in this, except for your body. So, you are going to beat the hell out of yourself using that. And especially if you're in where you're around a lot of hardwoods, not only that, it's going to take you a lot longer to chisel down that stump than it

3:03might by having a big mechanical device. The benefits of this is it is small. It can get through regular gates that people might have in their backyard. So, keep that in mind. The other one is going towards a giant hydraulic production. So, this is one that it does get kind of expensive. I looked at some of the pricing, 18 to 38,000 dollars. I mean, you some of these are remote control, uh some of them are driven by you, but you're not going to be beating your body up and you're going to get the job done

3:28in a significant quicker amount of time. So, um problem is they're not necessarily going to fit behind every gate. Now, I could be wrong about that, but I imagine that there's ones out there that I did find that were hydraulic that were narrower that would go behind the path, but you've also got to be cognizant of

3:44running over people's manicured lawns. How are you going to How are you going to [snorts] keep that safe and make sure you're not destroying their yard? So, option A, cheap rig, pay with your own spine. Really, your back's going to your back back's going to be beaten up. Option B, commercial rig, heavy debt, and possibly access is blocked. So, um my rule on this was basically under buying breaks your back, over buying traps you in debt before you've proved local demand. So, worth the risk section two. So,

4:13underground liabilities and legal net. So, let's discuss some of the possibilities that could happen and somebody did mention that it wasn't so much utility lines because they're dug so deep. A lot of times it's other aspects you have to be careful of. So, talk about that here. So, 811 only marks the public utility. So, that's the only thing you're really going to find. You still have to call and make sure that you actually do that. It's key for this business. Um but the things you're probably not going to find are irrigation lines, which you very well could open up. You're not going to find any low voltage, maybe sprinkler system

4:40lines, or even if they're running something out to a shed, something like that. So, I do talk about this later, but having the owner have it sign a disclaimer that they have to point out where they know that any of this is this is actually located underground so that you can avoid having to damage that. So, um but you do have dog, you know, invisible dog fences, things like that with electrical lines, and that's something to kind of think about. Um second, turf priority protection. So, if you are going to go with the hydraulic route and you've got to go over somebody's really manicured yard, you

5:09can't destroy it. So, but you do have to be able to get back there clean enough and be able to actually do the work. And this is where you do have to be careful that you're not going to have additional damage cuz that's just going to cost you money. You've got to also explain that there could potentially be damage based on the fact of where that stump is and that you are not responsible for that. So, in order to get the machinery back there for the job that they're hiring you for, it may have some consequences to it, but your job as a business person is to make

5:34sure that it's actually as clean as possible when you leave and that they don't notice any additional damage. So, state licensing. Uh this is something you really kind of have to look at. So, the myth, I'll get licensed um once and once you hit 50k, that's really not a rule. A lot of every state has a lot of different licensing parameters and you do have to work with the CCB and the LCB rules within your area. So, research those for your

5:59specific town of where you're at. Um there is a threshold of of insurance that you've got to have. So, you've got to look at that. But really $1,000 for job is the law. So, if you're actually making more They don't look at maybe the total amount that you made for the year. They're actually looking at how much you made for a job. At that point, you could potentially be facing fines and you may not be able to be liable to actually join some of the cleanup crews in your local area, especially for storm weathers or depending on where that's

6:24at. Um and geographically, I mean, let's be honest. I mean, stump grinding here in the Pacific Northwest is a lot different than it is over in, you know, Eastern Texas. So, you really got to look at your area, make sure that it is an actual viable thing. Um you got to look at what type of lumber you have growing. So, is it a hardwood or is it a softwood? That's going to help you to decide on which which piece of machinery you actually

6:45want to do. Um So, mandatory 500,000 plus liability to bid anything municipal. So, if you're working with the city, you've got to at least have that type of insurance coverage on you in order for them to put you on the call list for when they have the emergency services come in. I'm sure it's probably unilateral between most places, but double check your local area. So, the hard truth, one shallow one shallow sprinkler um or shattered patio door can erase, you know, literally 3 days of work. So, be cognizant of that. Any debris flying around, you've just always got to be thinking on the defense and make sure

7:17that you leave that property in better shape than when you got there. Section three, worth the risk. So, if you look at the photo right here on the screen, you can actually see that you do need to excavate and you need to be able to actually grind the stump down within, I would say, you know, 6 to 8 inches of where you're actually originally grinding it. So, the expansion factor, as you can see right here, is three to five times the volume of the stump that you're grinding, which means you're going to have a lot of debris that you're going to have to carry out of there, perhaps even more

7:42than a truckload of what you came with. So, you're going to have a surplus, and you've got to kind of make sure you're bidding that in. So, one of the things I would do on here is the quoting expectation, and I would love to hear from somebody else that does stump grinding, but all three people that I actually talked to today, they all do this. So, they actually quote for grind only, and quote, and that's it. So, everything else is left there for the homeowner. Maybe they use the bark or the mulch elsewhere in the garden. Um or you have to make sure that the customer

8:09is not assuming that you've got total removal. So, I would work that into your bid, make sure that it is part of your bid, and be very clear about that aspect. So, um that is something I would have them sign off on, and make sure that that removal is added into your bid total, because your time is not free. All in all, I have to say this is a really good business. Um a lot of things that I looked over, it really kind of gave a cadence that I thought this is something that I would actually think about doing. And so, this one so far already has my blessing, but

8:37I've got a little uh I'll I'll conclude this with my own thoughts after I'm done. So, um the audit rule, define grind only versus clean and haul. So, in writing up front, or manual labor and debris fees, um eraser margin. So, if you're spending 2 more hours at a job site than you needed to, because you're cleaning up, your profits for the day

8:55are shot. So, make sure to quote that. Section four. So, let's get into work the risk on the actual item itself. So, consumables, the teeth. These are expensive. Uh I was actually really surprised. I mean, depending on the grade that you want to buy, you're between 250 and 450 for teeth on that grinder. Now, this thing

9:15is a machine, so it's pretty impressive. But, um tooth strikes. So, buried rebar, concrete, or even curbs. Um that's a hundreds of dollars in in just seconds. So, you've got to be really cognizant of that when you're actually grinding, and try not to get too carried away. Um you do have a monthly nut on this, and that's something you really have to kind of think about. So, your general liability for your insurance, $1

9:37coverage, $2 million liability on that. I believe that that was how it worked. Um 100 bucks a month easily. Now, if you have a good credit score, that bond aspect is actually pretty good. I think that's what it was. Was a $1 million, $2 million bond on that. Um if you got a good credit score, you're probably going to only be about $100 a month on that. And And it does vary on credit score. So, that's what they're

9:59looking for. Um the other question is setting this up with an LLC or being sole proprietor. So, um this is one I would go either way on a little bit, especially when I'm starting. I'd probably just stay sole proprietor for a little while. Try to be cognizant of the jobs that I was taking. Maybe smaller jobs are more, you know, rather than the larger jobs just to get a feel for it. Um Island Marine, which is the equipment basically insurance in your travel time. So, this is uh and I'm sure many of you may have used this before or heard of it, but it is something that really kind of insures

10:26you in your commercial use of that vehicle and that machinery while you're traveling. So, there's a fee with that as well cuz if something does happen, you want to make sure that's insured while you're actually on the road. Um commercial auto and trailer, 200 bucks. I mean, you're probably dealing with that as far as just commercial fees. Uh tooth wear reserve, I would be sticking

10:44away at least $250 a month out of that. So, um fuel, you know, tow truck and grinder. I mean, you're probably at least $300 a month on that depending on your miles that you're actually driving, but that's pretty normal in something like this because you have to you have to relocate to do the job every time. So, $950 to $1,300 a month is what I'm seeing as far as a cost if you're going to decide to do this full time. Weekend warrior-ing, this is probably a perfect scenario to start as a side hustle to then turn into something if you can really make this work. Now, the key the

11:18caveat to that is really what kind of machinery are you going to buy? You don't want to have a huge debt sitting there if you're only going to be using this one or two days a week. So, keep that in mind. So, the true hourly rate, the illusion, and this is paper money. So, paper math I think is what I wrote down. So, the

11:33illusion, $250 an hour for a stump. The reality is maybe just for the time that you're standing there grinding that, but you have got to calculate for your time of loading it, cleaning the trailer, getting the trailer hooked up, the drive time to and from. So, if you're not careful with traffic and depending on where you're at and as far as even maybe you have winter conditions and you're going to do this, you could easily drop down to $25 an hour after

11:58all said costs. So, is that worth it? $25 an hour is not worth it. Um not to me anyway. So, I would not want to really be running this unless I was easily sitting between $45 and $65 an hour or maybe more. Um that would be probably the main key, but I would definitely get in contact with your municipal areas. I would really work to get on their list and as far as marketing goes, I wouldn't do much paper marketing on this. I would actually look at utilizing both YouTube and maybe even Facebook and doing what's called geo-fencing and try to find those homeowners and actually advertise

12:31directly to them via the social media. The only reason I say that is paper advertising has kind of gone by the wayside and you and you know it has too just because you have a pile of mail sitting there by your door. You don't [snorts] want to really look at it. You actually just wait long enough to throw it away and never have

12:46to look at it. But, if you market this properly by contacting landscaping companies, maybe those that don't have a stump grinder and you let them know that you are available as well as working with your local city so you can be on the call list and the more that you show up on those lists, the more you're going to be

13:01called. So, you got to make sure that the marketing is in place and that the jobs are there. You don't want to go and buy this expensive piece of machinery and then start your marketing process. So, I'm going to get into that next. Okay, so my conclusion with all of this. Um let's just start off with business-to-business marketing. So, we were just talking about that a second

13:23ago. So, I would skip the door knocking. Um partner directly with the local landscapers and any municipal aspects that you have in your county. That's I keep pounding that one in because I think that's crucially important. Um, you could do something like one of those mailer ads that you do, but you know, what are the odds of hitting out of, you know, the 2,000 that go out, somebody that might have a stump that they want to have grind out, right? So, usually it's going to be more of a front yard nuisance than it is going to be a backyard piece that you don't have to

13:50think about. So, the value, um, by partnering with these people, they may not have a stump grinder and the leads can kind of come to you really pretty good because this is directly with the people and maybe you do have to kind of, you know, do a spiff or maybe buy a case of beer for some of those guys every now and then, but get on the municipal access, the storm cleanup, and the vendor rosters. Key, I would do that immediately, but you've got to make sure you've got the right insurance, so check with your local, um, municipal area. Um, the zero capex strategy. So, this is where I'm going to

14:19bring in my two cents on business. I would not be buying a machine out of the gate. I just wouldn't. What I would do is I would probably start a marketing campaign and I would contact a local rental place that actually has a stump grinder. This way I can actually get the right grinder, so whether I need a big hydraulic one or I

14:34need a small, you know, manual one. I would actually be renting the grinder in the beginning for the jobs that you actually are able to coordinate. The reason I say this is because if it breaks, it's their responsibility, not yours in the beginning. You're also identifying, is there enough work to make this tangible for me to go do? Because let's be honest, if you're looking at this as a side hustle, you eventually want this to turn into something. That's where that gate leads, correct? And that's kind of how I feel

14:59whenever I'm looking at something. If you're looking at just diving into this and doing it full-time, give yourself 30 to 60 days of renting the unit before you go buy a unit. And not only that, you've also developed a relationship with that rental place and you never know what kind of deal you're going to get directly from them after you get to know them after 30 or 60

15:15days. You can also work in the rental fee into this piece. So, if you look at the fact of your overhead and what you're having to buy, I didn't even calculate that if you have a payment of a, you know, let's say $25,000 stump grinder and trailer. If you're renting this, it's going to come with the trailer, it's going to come with the stump grinder, and more than likely it may even have that same insurance on it that you may not have to

15:35actually carry while you're driving. It's kind of a win-win. The only difference is you don't own the machinery, and you've got to hope that the availability is there. So, I would look at possibly week-long rentals, or I would look at month-long rentals, or I would stack up the jobs, make sure they're all on a Saturday and Sunday, and rent that unit on Friday, and make

15:53sure you have that thing reserved. That will kind of help you decide whether you need to go forward and buy an actual stump grinder. So, keep that in mind. That's my two cents. That's the direction I would go with it. Um just do the market test. Return the rig when you're done. If it breaks down, it's on them, it's not on you. You're not having to replace anything. You're just paying the rental fee. So, really let the customer's payments prove the market demand before you go and make any large

16:17investments and put yourself into debt. So, this is kind of my cadence of the stump grinding. Overall, I definitely give it I I give this I give this probably a B minus. And a B minus is pretty good. Um I would do this, but I would start off with the rental to make sure that I actually had the business there, and I was able to learn the marketing and kind of my atmosphere first. So, you don't really know how much demand you have until you actually start putting yourself out there to figure out if somebody wants to try to pay you to actually come and do this job. So,

16:48you guys feel free to screenshot these, grab them. I mean, look at them. And if you have any questions, just let me know. Just leave a comment on the video, and uh best of luck. If you end up doing this, I want to hear about it. So, my whole goal here is to try to digest some of this information so that you guys

17:01don't have to and give my two cents. Now, obviously, the way I go about it's probably going to be pretty conservative because that's how I am. I just don't want to go dive into something because I'm trying to look to fix something. I would rather stay where I'm at for a bit longer to

17:14make sure I have everything underway. Some of you may have already found that you have a huge need for the stump grinding business. And if that is true, then I would definitely dive into it, but maybe not put yourself in total debt yet, and maybe not go buy a machine that's just going to break your back in the first 60 days. So, I'm 50, I'm old, I don't want to go out there and actually just be grinding myself down as quickly as the machine is that stump. I want to make sure that I'm actually not killing myself for a while, but I would 100% do this business B minus. I would do it. I

17:44think it's got real legs, and I think it's got potential, and I think you can start this one as being a weekend warrior, not have to dive in with both feet. So, good luck to you. Let me know how it goes. I can't wait to hear about it.