How To Start An Excavation Business In 2023 | Dirt Work Business

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Excavation business: Are you the guy who knows everything about construction and in place of working for others, and want to know “how to start an excavation business”. So for starting your own construction company or dirt work business and want to use all your knowledge of construction in growing your own business. then starting an excavating business is the best and profitable business for you.

Business Overview:

what is excavation business?

An excavation business or excavating companies are those, who prepare the land for construction and build the foundations of buildings for their customers.
the excavation business offers some other services also such as grading, demolition of sites, and digging.

Demand for construction works is increasing on a daily basis. That’s why demand for excavation services is increasing on a daily basis. So, to start an excavating business is a great opportunity of new upcoming entrepreneurs who are willing to start their career in construction industry

Facts about excavating industry:

Excavating industry is an $90 billion as of 2023, and it is growing by 5% from the last 3 years
It varies year to year but, till 2030 it is expected that it is definitely going to become $100 billion industry

how to start an excavating business
how to start an excavating business

How To Start An Excavation Business?

Steps for starting an excavating business are as follows:

If you want a complete business plan for starting an excavating business, then you should have some checklist to start. Here we are going to provide you with that checklist so you can easily start an excavation business.

First Step – Research the market:

You have to research the demand of excavation services in your market, where you are going to start your new excavating business and also you have to check what are the services which are highly in demand. It will help you in selecting the services which you have to offer in beginning to get the most of the customers.

Second Step – Create a business Plan:

After completing the market research, you got to know about the services which you are going to offer. Now you have to write a business plan in which you have to write who are your customers, marketing to attract them, expense, sales, insurance and all the other aspects which are required to run your excavating business
Business plan is also required, if you need financing from banks.

With this a good business plan will cover all the aspects needed to run a successful excavating business. So take some time and do the complete research in creating the best business plan for your excavation business.

Third Step – License And Permits:

To run a business requires some permissions and licenses from the governments, So check the rules and regulations of your state and gather all the necessary licenses and permits to start your excavating business.

Excavation business mostly requires the given license and permits:
1. A contractor license
2. License to run equipments for employees
3. A Business License
4. Sales and tax permits
5. An EIN (employer identification number)

Fourth Step – Tools and Equipments required for excavation:

There are multiple pieces of equipment, which are required to run your excavation business.
So the equipment required for excavation are as follows:
1. Excavators
2. Bulldozers
3. Dump Trucks
4. Backhoe Loaders
5. Trenchers
6. Digging fork
7. Edging Spade

These are the equipments needed to start a construction company. There are some more tools available, which you can buy according to your need.
And also you can start your business with a mini excavator in the beginning, if you don’t need the large excavators.

Fifth Step – Hire Employees:

Excavation companies requires a lot of skilled operators, workers and staffs, So hire them with according to your requirement.

And you should also add the employee related expenses in your budget. Expenses like workman’s comp insurance and unemployment insurance are some common expenses which need to be added during your budget formation.

Sixth Step – Network Formation:

Networking in business plays an important role, good networking will make you stable in your business during any problem. So establish a network of suppliers and contractors and build strong relationships which will help you in your future business.

How to get Clients or Leads for Excavation work?

  1. Marketing:
    Every business has their own marketing strategy, So you need to create your own strategy according to your targeted clients and place, to get maximum clients.
    you also have to advertise your excavation business according to your marketing budget.
    Some most used marketing techniques are social media marketing, website development, it is a little bit expensive but I will help you in increasing your online presence.
  2. Business Network:
    In Excavation, the source of Most of the clients are referrals from your network with people of your own industry.
  3. Connection with Existing customers:
    In the excavation business, the customers need regular service And they also refer you for the same work with their friends and relatives, if you maintain a strong connection with them.
  4. Follow the trend:
    By following the trend you will get to know about the places where you can serve your excavation services, so please be updated with time.

Excavation business Insurance :

Insurance For excavation business is very important, just because of its risk factor.
There are several kinds of insurance available for your excavating business, such as

  1. Liability insurance: Here you will the coverage for your property damage
  2. Workers compensation insurance: This insurance covers all the medical expenses and coverage for lost wages for injured employees
  3. Commercial vehicle insurance: I covers the coverage for replacement and damages of vehicles used in your excavation business.

There are some other insurances like equipment insurance, bonding insurance, umbrella insurance.

These insurances help you in decreasing your expenses in business, and you have to purchase the right coverage for your excavation business as per the needs.

Insurance cost:

  • The excavation business insurance cost varies as per its size and the type of insurance, As the general liability insurance cost for mini excavation contractors ranges from $90 to $130 Per month
  • JCB Insurance ranges to $300 to $400 per month
  • Caterpillar Insurance ranges to $350 to $450 per month

Similarly, You can check out the cost of insurance you need in your own state from insurance companies.


These are the checklist or steps or business plan by following which you can easily start a one man excavation company, And you can contact us or comment below, If you face any issues during stating your excavating business. And By following this you can also start an excavation business with no money or little money.

Credit:- Diesel and Iron


Is the excavation business profitable?

Excavation business is a very profitable business due to it’s high demand in the market with high margin. According to market research an excavation contractor earns more than $100,000 per year.

How much money can you make with an excavator?

An average Excavator operator earns approx. $50,000 Per year. in the USA. It varies as per the persons experience.

what is NAICS code for excavation?

NAICS Code for excavation contractor is 238710. This code includes foundation excavations, burials, and land removal.

Do you need a license to operate an excavator?

yes, An employee needs a commercial driver license (CDL) to operate an excavator.

How much does it cost to start an excavating business?

To start an Excavating business, it cost around $50,000 to $100,000 as per the size and location to start the construction business.


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