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Veteran Contributor

Shop? Or no shop? Help please

Just need a little  advice other than from my father and banker. I am 34 years old farm with my father who is 62 we run 1800 acres of ground and run 25,000 head of our own hogs a year. I came back to the farm 8 years ago and had no desire to own my own hogs so I have started a few side line businesses. I run a commercial snow removal business, also conduct prescribed fire operations for private land owners and government agencies. Here's the dilemma, I would like to put up a shop this summer and was wondering from others what I should do. 

The side jobs have grown substantially over the years, I am currently working out of a heated three stall garage. We try to do all of our own repairs both farm and the side line equipment. Our "farm shop" is not heated hardly any lighting and can't get the newer combine in without dropping the tank. 

Here's the comments I have received so far:

The shop will never pay for itself

why dump money into a shop when your at a age that you could be putting that aside for land

you can bank roll it, but do you really want to?

I am in need of a larger area to work, the larger the side jobs get, the more equipment. We typically get our fire equipment ready at this time of year but with the last two years we have had all the fire equipment and snow equipment packed into that three stall garage, because winter doesn't seem to want to leave early. My father has no desire to have a shop which in turn has no desire to help put one up, which I can see being at the age where retirement is coming.

My question to you

What made you put up a shop?

Did it make financial sense?

Would you do it at an age when land is a big concern, and don't want to position your self not to take that extra money from the side jobs and save it for land purchase / rent?

Tired of thinking, ready for spring!!!!

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27 Replies
Frequent Contributor

Re: Shop? Or no shop? Help please

You seem to have a great skill in making repairs and are willing to do those repairs. A big savings when you look at the cost of keeping up equipment with the acres and snow business you have. That tells me to find a way to build a shop and make it work. Personally, I don't care to do repair work much anymore. I am 51. I do in season minor repairs, grease, change oil, blow out filters, etc. Other than that, all my equipment will find professional mechanics sometime in a 2 year period; the combine every year. I have a seed business that keeps me busy through the winter and spring so I justify the repair costs by doing what I think I am good at and pay people to do what they are good at. A heated shop is also a storage building so that should figure into that value....MikeM

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Veteran Contributor

Re: Shop? Or no shop? Help please

My Dad & I run about the same acreage as you, we built our shop about 1985 & only regret not making it twice the size it is. Like you I have a side business with 2 cousins who are not involved in the farm, except they help with repairs when we are in the field to help keep us running. We maintain about 25 semi's for local truckers & alot of machinery for local farmers. In the winter I build grass rigs & tankers for area FD's & do all kinds of fabrication also. Our own farm machinery is a very small percentage of what goes through our shop, if anything would happen to our shop we would be in deep "S" & would break ground the next day for a new one. That being said for the amount of machinery you must have to farm 1800 you will pay for that shop quicker than you think by saving shop rate on your repairs besides any other doors it might open for you, I'm 46 and the older I get the more I appreciate my warm shop to work in versus laying in the mud, snow & crap to fix things. MY OPINION IS get some trusses ordered & put floor heat in!

 

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Senior Advisor

Re: Shop? Or no shop? Help please

Build the shop.  Build it as soon as you can.  Build it as big as you can afford and deliberately build so you can expand it.  Build in floor heat and good lighting.  You're work will be more efficient.  Your dad will very soon want to use the shop for his repairs, too.  Smiley Wink

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Advisor

Re: Shop? Or no shop? Help please

Is there any chance you could heat and improve the lighting in the existing farm shop?  It is a lot easier to make that sort of an expense cashflow than it is to add another big building payment, plus  taxes and insurance on it, for what amounts to just one machine...the big combine.  

We did build a small farm shop on this place, but it had ZERO sheds adn barns on it when we built our 12 hog houses.  We needed a shop and sheds for haying equipment and tractors. 

In a pinch, you can work on a machine under its shed...using the same tools and work truck you'd use for field repairs. I'd rather have money in mobile repair capability if I were you, with so many jobs offsite.  That just makes way more sense to me, given the mix of things you do and where you must be doing them. 

i'd bet you could trick out a good tool truck with portable generator, air compressor, and welding equipment, and spare set fo tools, for far less than an empty shop building...you've got to equip either way. 

I'd look at a way to fuel - at least part of a dual-fuel setup - with waste motor oil.  Two birds with one stone that way.  Lighting is not expensive , and much can be done with portable worklamps, too. 

FWIW, if your banker is discouraging you from this, it is because he does not think you have great potential to repay it, at least at this point in your business's growth phase.  You also have been selling services, and that relies upon other peopel to be able to pay you for your work...which can be risky.  Sometimes, the best thing someone can tell you when you ask for a loan is "No." 

Debt is slavery.  You have a lot of freedom as it is now, and you never knwo where your diversifications may turn in the future.  A tool truck is an easier asset to relocate or liquidate than is a building on your family's land, if things went south or you got a much better opportunity further from home, for example. 

I have seen way more people regret taking on new debt than I have ones who were glad they waited.  I think that there is another, more reasonable way to skin the repair cat....

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Honored Advisor

Re: Shop? Or no shop? Help please

Here`s something to consider, will land the price it is, 10 acres would probably put up a nice shop. If farming goes the direction it has been and you decide to quit you`ll maybe expand your other businesses and building shops won`t get any cheaper.  Unless the current commodity and land bubble is different, the cost of production will at some point grain will level off at the cost of production.  This is just my opinion but those "christian" BTOs that farm 10,000 acres today will have 20,000-50,000 acres, ten years from now, so to go a couple million in debt to buy 200 acres won`t make the difference in a farm`s survival anyway.  Best of Luck to You. 

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Senior Contributor

Re: Shop? Or no shop? Help please jim meade

Listen to Jim, you will never regret having a nice shop, and you might never have  seven dollar corn to pay for the thing. Now is a good time.

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Senior Contributor

Re: Shop? Or no shop? Help please BA Deere

This christian small farmers prays to god you are wrong but I think you are right. This country as it was when I was growing up is forever changed. So sad I could cry.

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Advisor

Re: Shop? Or no shop? Help please

That is the best advice one can give. 

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Honored Advisor

Re: Shop? Or no shop? Help please BA Deere

Hey Cowfarmer, I saw what happened with the hogs, there used to be 800 farrow/finish operations in the county and they got plucked off so now you could easily count them on one hand, all within 10-15 yrs. The same deja vu is happening with grain farms.  A guy with 10,000 acres doesn`t say "I have enough, I can live quite comfortably on my 10,000 acres" no he wants more.  If the devil hisself came down and offered all the farmland in the US in exchange for his soul they`d do the deal, but they still wouldn`t be happy they`d want all the land in Brazil as well. About the shop question, I have never ever met someone who regretted putting one up, the only thing they wish it had taller sidewalls and longer and wider.  I know a few farmers who are good mechanics and quit farming and opened a repair business in their exsisting shop.  Had it not been put up when they were farming, they may have just went to town to be a wage slave.

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