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Bill’s BusinessBACKHOE BILL SEIZES AN OPPORTUNITY. GORD COPE EXPLAINS HOW BILLLANDS A NEW PIECE OF EQUIPMENT AND HIRES HIS FIRST EMPLOYEEILLUSTRATION BY SYLVIE BOURBONNIÈREOpportunityKnocksIt was a beautiful spring Saturday incentral Alberta. Bill Bako had just finisheddigging a basement with his Cat 320CLexcavator and was taking a coffee breakin his F 150. All around the subdivision,the air was filled with the whine of electricsaws and the sharp crack of hydraulic nailguns as construction crewsassembled homes.Bill glanced up as JackArmstrong, the developer,pulled up in his 4 x 4 and gotout. Bill pointed to the rollof blueprints under Jack’sarm. “How are the plans forPhase III going?” Jack noddedtoward a distant cloudof dust rising from the landscape.“The scrapers are justfinishing up with the topsoil.We need to get the crews in tostart the roads.” Bill finishedhis coffee. “Great. I shouldbe done here in time to startbasements once the roads arepoured.”Jack shook his head. “Youmight have to wait. My dozercrew took a job in Fort Mc-Murray. I don’t have anyoneto cut the roadbeds. You knowanybody with a dozer? I can promise eightmonths solid work.”Bill thought for a moment. “Sorry, no.But if I hear of someone, I’ll let you know.”That evening, Bill took advantage of thenice weather, having his buddy Wayneover for a barbecue. He told his accountantabout Jack’s problem. “My worry is that I’llbe idle for a couple of months unless hefinds a dozer soon.”Wayne came up with an idea. “If Jackis guaranteeing eight months work, youmight want to think about getting a D7yourself.” Bill laughed. “Great plan, Einstein.How am I supposed to operate twomachines at once?”“My neighbor’s son, Ricky, just got hiscertificate for dozers and he’s looking forwork.” A smile broke out on Bill’s face.“Give me his number.”Monday morning, Bill went to see Paul,his Finning customer account manager. “Anew D7 would cost $505,000,” Paul said.“A rent-to-purchase contract with CatFinancial requires at least 20% equity toflip. You can build that up with a sevenmonth rental, which is $17,600 per month,plus carrying interest. At the end of sevenmonths, you have $123,200, which is overthe 20% threshold. After that, we can putyou on a 48-month purchase agreement at$9,800 per month.”“What are my monthly expenses?”asked Bill. Paul chewed his pencil inthought. “The ownership payments are$17,600 per month. Fuel is $100 per operatingday, maintenance is going to run you$500, taxes $1,000, salary for your operator,$5,000, insurance $600 and miscellaneousstuff $500.”That afternoon, Bill and his wife Brendalooked at cash flow for the dozer. “It’sgoing to run $26,000 a month until I flipthe contract,” said Bill. “At $1,300 per daygoing rate, I’d need at least20 days to break even.” Heshook his head. “Pretty tight.”“You’ve been doing quitewell this last year with theexcavator,” said Brenda.“We’ve got a nest egg of over$80,000 in cash. You couldput $50,000 on the D7 andreach the 20% thresholdthree months early.” Billsmiled. “You’re right. Afterthat, monthly costs drop byalmost $8,000, and if we geta quiet month, we can usethe interest only paymentoption.”The next day, Bill went tosee Jack with his plan. “Bill,you’re a lifesaver,” said thedeveloper. “You can startimmediately.” Bill closedthe deal with Finning andRicky showed up at PhaseIII to crew the new dozer. “If you ever needmore guys, I got a whole gang of pals dyingto work local,” said Ricky. Bill stared outat the subdivision rising around him, andthen slapped Rick on the back. “I may justhold you to your word on that!”Next Column: Bill starts to expand.www.finning.ca Summer 2005 • TRACKS & TREADS 41