How to Start an Excavation Company

Starting an excavation company can be a rewarding and challenging venture. Excavation is an essential niche and is relatively reasonable to get into from a cost perspective. To start your own company, and grow it, requires licensing, financing, strategizing, and predictable acquiring new projects but it is entirely doable.

This article will discuss how to start your own excavation company and introduce the many requirements the state and local agencies will require from you. We will also discuss one main problem that keeps excavation business owners awake at night: how to generate clients today.  By the time you have reached the end of this article, we hope to have given you an essential guide on how to start and run an excavation business.

Register Your Business

It begins by creating your excavation company’s name. Your business name must be memorable and has context to your industry.

To ensure your business name is unique and officially available, visit your Secretary of State website. Do a name search for your business name. Once you have confirmed your business name is unique, register your business in the state. Complete your online application and pay the required fees. Depending on the state, you may have to wait several business days for approval.

Next, register your company with the Internal Revenue Service (IRS). They will give you your Employer Identification Number (EIN). Your EIN allows IRS to track payroll tax payments when hiring employees. Most banks will also require your EIN when opening your business account.

Prepare Your Insurance Portfolio

Disasters and accidents at excavation projects can be costly. Third-party individuals and your employees can get injured. Property can be damaged or stolen. Incidents can also lead to your business getting sued. Therefore, states require corporations to have particular liability coverage in their insurance portfolio.

Commercial Property and Liability Insurance

This coverage protects your company from third-party claims of bodily injury, personal injury, or property damage within your property. It also assists you with legal fees if you get sued.

Commercial Auto Insurance and Liability Coverage

This type of insurance covers employee and non-employee injuries on your property. It also covers property damages from vandalism, theft, or fire.

Commercial Property and Liability Insurance 

This insurance covers your excavation and grading company vehicles if damaged or stolen. The liability coverage is for the damages heavy vehicles can cause in an accident. These damages included medical costs from the accident.

Workers’ Compensation Insurance 

This insurance protects work-injured employees from costs that heal insurance might deny. It also covers lost wages.

Contractor Tools and Equipment Insurance

Like commercial auto insurance, this insurance pays for damaged, lost, or stolen tools and equipment. It’s best for small tools and equipment that travels to job sites that are less than five years old.

Professional Liability Insurance

This insurance covers legal costs when a business is sued for mistakes and other forms of oversight. It protects you from negligence claims and undelivered services.

Umbrella Insurance

This policy helps you in case of a large claim. It provides additional coverage beyond the limits of your general liability or other policies.

Pollution Liability Insurance

This insurance protects your business from claims of environmental damage caused by excavation activities.

Excavation Surety Bonds

Your state may also require you to buy excavation bonds. These bonds are legally binding agreements between contractors, the government agency regulating excavations, and the surety company.

The government agency establishes contractor obligations. The surety company ensures the contractor meets said obligations.  If the contractor violates the statutes and regulations set in the excavation permit, the surety company compensates the government for the financial losses and charges the contractor for reimbursement.

Define Your Business System

Fleshing out your business structure is essential. It includes your business goals, understanding your market, and mapping your business strategy.

What’s your vision for the company? Who will be the management team that will help you execute it? Research your market, your customers, and your competition. You can match your daily operations, forecasted growth, and cash flow.

Secure Funding

Upon developing your business system, you may need to secure funding. Excavating companies spend more than heavy equipment. They need leasing, contracts, payroll services, marketing, and advertising expenses.

There are ways to raise capital if you cannot finance your overall budget alone. There are bank loans and angel investors. Or you can visit your state’s Small Business Administration to apply for an SBA loan. Upon reviewing your business plan, they can give you SBA loans amounting to $5 million. They also have express loans that are up to $500,000.

Buy and Lease Excavating Equipment

Excavation companies need heavy equipment. They are the backhoe, a dump truck, and a bulldozer. You will also need smaller equipment, such as shovels, pickaxes, and wheelbarrows.

You can buy some equipment and lease the others when starting. Most often lease the larger equipment while they are still growing their business. Leasing is similar to renting; the term is longer (usually 12 months) with preset hour limits.

A company may choose to lease for different reasons. Some may not have the down payment to purchase one. Others may want to experience the equipment first.

If you ever choose to buy it, you can do so at the end of the lease term. If not, there is no need for commitment after the lease ends.

Get Your Licenses and Permits

Your company must obtain permits and licenses depending on your local municipality, county, and state. Depending on your location, the government will require any of the below-mentioned permits and licenses.

State Licensing

Some states may need your business to have a license to operate excavation equipment. Other states may only require from you a general contractor’s license.

To get your state license, you may need work experience, pass a trade exam, and acquire a surety bond.

Local Licensing

Your company may also need a license at a local level. In some states, excavators aren’t regulated. For example, if you’re located in Illinois, you won’t be required to get a state license, but the City of Decatur will need an Excavation Contractor License from you.

Commercial Driver’s License

Drivers who operate the truck for hauling excavating equipment will require a Commercial Driver’s License (CDL). It is issued by your state’s Department of Motor Vehicles. The CDL is the license to drive heavy or large vehicles.

Create Your Excavating Marketing System

More and more people are seeking solutions online. In this digital age, it’s vital to have an online presence. More projects mean more income. You will need marketing strategies to utilize the world wide web and get to choose excavation projects you want to work on. Here are some of the factors that are at play with your marketing strategies:


SEO (Search Engine Optimization) is a critical component of digital marketing. It helps excavation companies improve their online visibility and attract more potential clients. Here are some SEO marketing strategies that excavation companies can apply:

Conduct Keyword Research

To rank higher on search engine results pages (SERPs), you need to identify relevant keywords that your leads are using to search for excavation companies to hire. This can help you to optimize your website content and create helpful blog posts.

Optimize Website Structure and Content

Ensure your website has a clear site structure to make it easy to navigate by your leads. If your website is confusing to explore, they will exit your website. Optimize your website content with relevant keywords, and ensure it is well-organized and easy to read.

Build High-quality Backlinks

Backlinks from reputable websites can help to boost your website’s authority and trustworthiness. By doing so, you also improve your website’s search engine rankings. Network and reach out to other websites in your industry. Building relationships with other business websites is mutually beneficial as you can link to each other’s websites.

Create a Google My Business Account

This free tool allows you to manage your company’s online presence across Google. It also makes your business visible on Google Maps, complete with contact information. Make sure that your business information is up-to-date for visitors. You can even encourage your clients to leave reviews.

Utilize Social Media

Social media is a powerful tool for engaging with potential clients. It also builds brand awareness. Share photos and updates about your excavation projects to let visitors know what it would be like to work with you.

Content Marketing

Content marketing is an effective way for excavation companies to generate leads. It allows you to provide valuable information that places you as an authority in the business and gain trust and familiarity. Here are some content marketing strategies that excavation companies can implement:

Create Relevant and Informative Blog Content

Creating a blog on your website can help establish your company as an industry leader. It will also improve your search engine rankings as Google prioritizes EEAT (Experience, Expertise, Authoritativeness, Trustworthiness) content. Ensure your blog posts are informative, relevant, and optimized with relevant keywords.

Produce Engaging Videos

Videos are one of the most effective media to rank in search engines. Create videos that showcase your company’s expertise, such as a time-lapse video of a project or an instructional video about operating a particular piece of equipment. Share these videos on your website and social media channels.

Share Case Studies

Highlight successful excavation projects you’ve completed by creating case studies. These can include before-and-after photos, descriptions of the work completed, and testimonials from satisfied clients.

Publish White Papers or eBooks

These longer-form content pieces can provide in-depth information on excavation topics, such as the latest industry trends, new technologies, or case studies of successful projects.

Guest Blog on Industry Websites

Reach out to other websites in the construction industry to see if you can contribute guest blog posts. This can expand your reach through backlinking and attract new clients to your business.

Custom Advertising

Custom advertising effectively allows excavation companies to reach potential clients. Here are some custom advertising strategies excavation companies can consider to promote their services: 

Local Print Ads

Place ads in local newspapers, magazines, or trade publications to reach potential clients.

Vehicle Wraps

Wrap your company vehicles with eye-catching graphics and messaging that promote your excavation services. This can increase brand awareness and visibility when you’re out on project sites.

Digital Ads

Use platforms like Google Ads or Facebook Ads to target potential clients. These ads can be targeted based on demographics, interests, and location. These ads can also retarget leads to promote your excavation services.

Trade Show Displays

Participate in industry trade shows to network with real estate developers and potential leads. Use visually appealing displays to showcase your excavation services. Trade shows can help you increase your connections and continue your rapport online.

Sponsorship of Local Events

Sponsor local events like community fairs, sports teams, or charitable organizations. This can increase brand awareness and show your support for the local community.

Promotional Items

Create custom-branded promotional items like hats, t-shirts, or coffee mugs and give them away to potential clients or at industry events. Not only will people appreciate free items, but it will also increase your company’s brand awareness and promote your excavation services.

Extract Excavation: Your Marketing Made Easy

Here at Extract Excavation, we increase your quality leads on a pay-per-job basis. It means you only pay for closed deals. We do the heavy lifting of marketing your company. You choose the projects you want to bid on and set your rates—no need for expensive marketing budgets or upfront marketing costs.

We do all the work stated above. Plus, we also give our clients their marketing toolkits. Your marketing toolkit helps you close on the right jobs you’re passionate about.

Beginning your Excavation Company Journey Today

Starting your own excavation company can be daunting. But by getting to know the basic steps, there is a clear path forward. Research what your local and state agencies may require from you regarding permits, licenses, and insurance. Create your business plan and determine how to execute your system and financing. Lastly, to always have projects to grow your business, always have a marketing strategy at hand. 

We have helped numerous excavation companies. You can close more projects of your choosing by having quality leads. And you don’t need to pay until you get real projects from us. Contact us today to get quality leads with zero effort on your end.

Ready to start your project?