Brave move for young starter
Faced with fierce
competition, rock bottom
rates and a depressed
farming economy –
starting a contracting
business from scratch
could be seen as a
Andy Moore met up with
Mark Lyes who made the
move last year
FOR a young contractor starting out on his own, Mark Lyes was faced with more than a few challenges when he took over a contracting business last May.
With start-up capital borrowed from his parents, he had the task of resurrecting a Devon-based business which ceased trading in December 2000.
Having completed courses in agriculture at Bicton and Seale Hayne colleges and working for several large estates, an ambition to run his own business was a calling which could not, it seemed, be ignored.
"Taking on a contracting business presented a golden opportunity for me to use my training and skills in farming," explains Mr Lyes speaking from his Hemyock base in Devon.
"I already had a number of contacts in the county and the business had a close-knit number of customers scattered in a relatively small area."
To get the business back on its feet, Mr Lyes had the task of re-establishing a list of core customers. The previous contractor, which built the enterprise up over 15 years, left him with a list of 100 customers – but many of them had taken their business to other contractors in the area.
To help raise his profile, Mr Lyes spent most of last winter visiting potential customers, leaving business cards and sending out flyers.
"I made a concerted effort to avoid discussing rates when visiting customers and being too pushy," he admits. "Instead, I just promoted my contracting services at face value. My rates are middle of the road – pitch rates too low and it becomes difficult to increase them in the future."
He considered his strongest argument to persuade customers to sign up was his big baling service – which was the previous contractors mainstay operation.
With just a handful of customers on-board, Mr Lyes then had to make his first two major purchases – a 140hp tractor and large square baler.
He purchased an ex-demonstrator Deere 6910 with 1000hrs on the clock financing it through the manufacturers credit scheme, and a 1996 Claas Quadrant 1200 baler which was sourced from a local dealer.
Covering a 20-mile radius, the Quadrant baler should knock out no fewer than 8000 straw bales this season, says Mr Lyes.
"A growing number of livestock farmers I baled straw for are asking me to bale or wrap square or round silage bales," he adds. "Rates for baling are £3.10/bale or £5.25 for baling and wrapping."
Another key service now being offered by Mr Lyes is low ground pressure (LGP) spraying with a Frazier Agribuggy fitted with a 24m boom and demount spray unit. This outfit covered 1214ha (3000 acres) this spring.
"The spraying service has been slow to get going because there are a number of other machines operating in the area," he says. "I am able to promote the service by offering a LPG machine – but it needs to cover a lot more ground to pay its way."
Charged out at just £10/ha (£3.75/acre), Mr Lyes says the machine needs to eventually cover at least 4000ha/year (10,000 acres/year) to make a useful turnover.
Going hand-in-hand with spraying is fertiliser spreading which requires the Agribuggys demount tank to be swapped with a 24m Amazone spreader.
"The sprayer can cover about 81ha/day when spraying large blocks of land at 200 litres/ha," he says. "More and more farms are not doing their own spraying due to stringent regulations. So I hope the service will improve in time."
Mr Lyes future plans include providing a ploughing, cultivation and drilling service.
"Cultivation operations are not much of a money spinner in our area – but it would help to keep the John Deere busy during quieter months," he says. "The tractor is my biggest investment so it must be kept rolling for as many months of the year as possible."
At the present, keeping the John Deere active in slack periods has seen it coupled to a McConnel PA93 hedge cutter or a hired 12t rear discharge muck spreader.
"The skys the limit when it comes to trying out new services to make the business thrive and expand," he insist. "Like most contractors, I sometimes wonder whether its all worth it. But hopefully dedication to the job and careful management will ensure a successful and sustained business." *
Green machines…Quadrant baling represents Mr Lyes mainstay contracting operation throughout a 20-mile radius.
The contracting business presented a an ideal chance for me to use my training and skills in farming, says Mark Lyes