We’re having a smallish (26×30) new building put up on our site. At the moment, the foundation footing and frost walls have been poured, and the excavator is here to backfill and level around it before the slab insulation is laid and the finish concrete work is done.
Oakley Allen has been in the excavation and logging business for seven years, after having spent about thirty before that working for his uncle’s well-drilling business (he started there when he was twelve). The crew consists of Oakley and his son Levi… and a remarkable array of equipment. Have a look at this photo, taken at 11am today.
From left to right, we have:
- a Ford F350 one-ton pickup with a dump bed
- A Chevrolet Silverado 3500HD one-ton pickup with a dump bed, plow and plow hydraulics
- (obscured by the two posts) a New Holland Super Boom Loader
- (obscured by the big excavator) a Wacker Neuson EZ28 excavator
- a Deere 160C LC excavator
Their big tandem-axle dump truck wasn’t in use today. Plus he’s got hand tools ranging from saws and shovels to pneumatic tampers.
This two-person business has equipment that, if all bought new today, would cost well over a million dollars. The concrete contractor, Tony Genier, has at least that much equipment of his own, plus the occasional arrival of a vast concrete mixer from JP Carrara. Then the electrician Eric Haynes, the teams from Green Mountain Power and Vermont Television, Dillon Hepburn who dropped the trees that were trucked by Jordan Martelle to the Woodell and Daughter sawmill to be turned into frame members by our general contractor Glenn Tarbell. This simple one-room building will have had twenty people on the site at one point or another, supported by at least five million dollars worth of equipment.
And that, friends, leads us to today’s vocabulary word: amortization. (A word that hardly any of these folks would use.) Once you buy an asset for business production, you need to pay it back a few dollars at a time through charging more for its use than you paid for it. (The self-employed contractor or small farmer is, without having ever read Marx, teetering right on the border between the MCM and the CMC economies.) I wrote a novel not long ago (called & Sons, after the common business names of so many small contractors) centered on a Nebraska corn farm that made over half a million dollars in commodity sales in one season, but only netted its owners the equivalent of about eight dollars per hour. Lots of money comes in, and almost all of it goes out without having stayed in the contractor’s pocket for even a minute.
During the California Gold Rush, most of the fortunes weren’t made by miners, but instead by merchants and suppliers who sold stuff to those miners. So too John Deere and New Holland and Chevrolet have made their money up front, and Oakley and his son scramble from one day to the next to try and earn it back. It ain’t makin’ any money just sittin’ there, one might say in the vernacular. You learn to run it all, you learn to repair it all, and only then do you get to practice your specialization.
There’s no moral to the story today, just a new appreciation for people who learn a trade and then have to learn to run a business alongside it.