General Excavation (Low-Profit Business Model)

What happens here

The third worst way to make money in the green industry, according to the presenter, is 'general excavation' for residential construction, such as digging basements or foundations. He illustrates that such tasks, like digging a simple square box in the ground, require minimal specialized skill. The low barrier to entry leads to a highly competitive market where pricing is driven down, making it another 'race to the bottom.' He recalls a time 18 years prior when digging a basement cost $5,500, including some components, but notes that this price has not increased, effectively decreasing its value over time due to inflation and increased overheads. The presenter points out that many individuals enter this field simply because they want to own and operate heavy machinery like excavators, not necessarily because they understand the business numbers. This further fuels the competition and reduces profit margins. He makes an exception for digging ponds, which he deems even simpler because it requires even less precision, stating it's 'one of the easiest things you can possibly ever do,' as results are often hidden underwater. He emphasizes that for these general services, being in an urban area allows for charging higher rates due to higher demand and perceived value.

Goal: Understand why general excavation is a low-profit business model and how location impacts pricing