How Much Does It Cost to Start an Excavating Business in Texas?
- Nate Jones
- Dec 4
- 2 min read
Starting an excavating contractor business in Texas — whether serving Houston, Dallas, Austin, San Antonio, Fort Worth, or El Paso — involves a significant upfront investment. Costs vary based on equipment, licenses, insurance, and operational plans.
Startup Costs & Budget Breakdown
Category | Typical Range / Notes |
Heavy Equipment (excavators, skid steers, dump trucks, trailers) | $80,000 – $150,000 for a small functional fleet |
Optional / Additional Machinery & Tools | $5,000 – $20,000 for mini excavators, hand tools, safety equipment |
Permits, Licensing & Business Registration | $500 – $2,000 depending on city and project type |
Working Capital & Operating Expenses | $10,000 – $30,000 (fuel, maintenance, marketing, initial materials) |
Total estimated startup cost: $100,000 – $200,000 depending on scale.
Equipment Considerations
Buy used or lease: Reduces upfront costs.
Start small, expand later: Start with one or two versatile machines, then add equipment as your business grows.
Insurance & Risk Management Costs
Insurance is essential for protecting equipment, employees, and liability. Typical costs for Texas excavating contractors:
General Liability Insurance – $1,200 – $1,800/year
Workers’ Compensation Insurance – 2–8% of payroll if you have employees
Commercial Auto Insurance – $1,200 – $3,000 per vehicle/year
Contractors Equipment Insurance – $1,000 – $3,000/year depending on equipment value
Commercial Property Insurance – $800 – $2,500/year
Professional Liability Insurance – $800 – $2,500/year
Total insurance cost for a small-to-medium Texas excavation business: roughly $3,000 – $8,000 per year, depending on fleet size, employees, and coverage limits.
One Hampton Insurance can help you find the best coverage and rates across Houston, Dallas, Austin, San Antonio, Fort Worth, and El Paso.
Buy used or lease equipment
Start with a small fleet and expand gradually
Maintain equipment properly to avoid expensive repairs
Build a cash reserve for fuel, maintenance, and unexpected expenses
Final Thoughts
Starting an excavating contractor business in Texas requires a significant investment, but with careful planning and proper insurance, you can protect your assets and build a profitable business.
Cities like Houston, Dallas, Austin, San Antonio, Fort Worth, and El Paso offer strong demand for excavation services, making the investment worthwhile.
One Hampton Insurance helps Texas contractors secure tailored insurance packages to protect equipment, employees, and business operations.
👉 Request a free insurance quote today and start your Texas excavation business with confidence.
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