Is Owning an Excavating Business Profitable?

Nate Jones
Jun 22
3 min read

If you're considering starting an excavating business, one of the first questions you’re likely asking is: “Is it profitable?” The short answer is yes—but like any business, profitability depends on smart planning, efficient operations, and proper protection like excavating contractor insurance.

In this blog, we’ll break down the startup costs, potential earnings, and key factors that influence profitability in the excavation industry. Whether you're launching a land clearing business, demolition service, or utility installation company, this guide will help you understand the financial landscape—and how to protect your investment.

Startup Costs for an Excavating Business

Starting an excavating business requires a significant upfront investment. Here’s a breakdown of typical startup costs:

Used Excavator: $80,000
Used Skid Steer: $45,000
Used Truck & Trailer: $60,000
Excavating Insurance: $4,000 (Get a quote at Excavating Insurance Partners)
DOT Registration: $200
LLC or Corporation Setup: $200
Marketing & Branding: $2,000

Total Estimated Cost: $191,400 – $200,000

With Financing:

Down Payment: $40,000
Monthly Loan Payment: ~$3,400 (10-year term)

Monthly Operating Costs

Fuel for Excavator: $1,000 – $1,500/month
Maintenance, Repairs, and Insurance: Varies, but budgeting an additional $1,000–$2,000/month is wise.

How Much Can You Make?

Here’s a look at average job earnings:

Basement Excavation: $10,000 – $30,000 (Avg. $20,000)
Land Grading: $1,000 – $3,000 (Avg. $2,000)
Foundation Prep: $3,000 – $4,000 (Avg. $3,500)

Monthly Revenue Example:

1 Basement Job: $20,000
2 Land Grading Jobs: $4,000
3 Foundation Preps: $6,000

Total Monthly Revenue: ~$30,000
Estimated Monthly Profit: $19,000 – $20,000
Annual Profit: ~$190,000

Link to Book

Is It Worth It?

Absolutely. Excavating businesses are not only profitable but also scalable. As demand for residential and commercial construction continues to grow, so does the need for excavation services. You can expand by adding more equipment, hiring operators, and taking on larger contracts.

How to Get Excavating Jobs

Build a Website with SEO: Make sure your site ranks for keywords like “excavating services near me” or “land clearing contractor.”
Use Social Media: Post before-and-after photos, videos, and client testimonials.
Network Locally: Connect with home builders, general contractors, and remodelers.
Use Lead Services: Platforms like Contractor Back Office can help you find jobs.

Don’t Forget Insurance

Before you break ground, make sure your business is protected. Excavating work involves heavy machinery, underground utilities, and high liability risks. That’s why you need excavator liability insurance from a provider that understands your industry.

At Excavating Insurance Partners, we specialize in helping excavation contractors find the right coverage. Whether you're just starting or scaling up, we’ll connect you with top excavating insurance companies to protect your business.

Final Thoughts

Owning an excavating business can be highly profitable if you manage your costs, secure steady work, and protect your assets with the right insurance. With the right strategy, you can build a business that’s not only lucrative but also essential to your local construction economy.