flushcut
Been here much more than a while
- Location
- Delavan, WI
In my experience people that are talented and want to do tree work run their own show, even before the pandemic.
Tree peeps are a rare breed.
Career awaits!!!
- Thread starter Ryemy99
- Start date
Tree peeps are a rare breed.
I agree, although in my experience that talent isnt discovered or developed in 1 year.
Reread your response, you made money you just reinvested it back into your business. That was my experience as well. I made good money right off but put it back into the company, minus expenses to survie. Took me about 5 years.
Correct, I didn’t pay myself for 3.5 years. Sounds like we had some parallel experiences entering the market.
Yes. The crux for me has been to learn to think like a businessman AND still think like a climber. Hence my question to Mark. This ties into an earlier point of people starting a tree business without legit climbing experience.
Reach
Been here much more than a while
- Location
- Atglen, PA
I too went for a fairly rapid growth (and still do) and with that comes a lot of expenses, which chewed up most of the profits from the company. I never went a full year without a paycheck as I’ve only ever been self employed, at least since graduating from college, but I have had periods of months where I worked for free or nearly so in order to keep the bills paid and keep on track with the growth I wanted to see.
There’s also a difference between making money and paying yourself, which many do not understand. It is quite possible for me to take home a paycheck every week and for the company, owned solely by me, to lose money at the same time. My company’s profits are separate from my personal profits.
Chris Schultz
Carpal tunnel level member
- Location
- Minturn
Ok ok ok. There’s been a lot of talk about “not making money the first (x) years.” Not sure exactly what people mean by working for “free”? These first few years: Were you buying equipment (assets) for the company? Were you buying land/shopyard (assets) for your company?
I am very aware of company structure and the flow of money within the company. I agree I see people make the mistake of not understanding the difference between personal money and company money. I am clear on personal profit versus company profit. My question for you is whats the goal with rapid growth and the definition of rapid growth. The end goal is personal profit. Here is my point. More equipment, more crews equal bigger gross revenue. This doesnt equate to more net revenue ( personal profit ) necesarily. Just means you are doing alot more work and it cost more money to do more work. I see bigger companies grossing around 1 milion and the owners netting 250k. I see small companies grossing 500k and the owners netting 250k. The line is not linear between more gross and more profit.
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I can speak for me. I never worked for free. My company generated enough revenue to buy equipmnet and pay me enough to survive. Never mentioned how much money " need to survive is". This was the premise of my question to the other fellas. They clarified by saying they made money to keep the company going which would include paying themselves as they are part of the company and buying equipment. The company made no profit but kept itself going. Which is different from making no money. Reach's point about company profit and personal profit.
Really appreciate the conversation. Here is my final thought before bed. This is purely my opinion. Instead of trying to build a big equipment heavy revenue generating monster with hopes of selling it one day, which generally doesnt work out. I plan to operate at a decent gross revenue focused on the highest % of profit. Then take that money and reinvest it. Old school businessman told me once, its not the money you make but what you do with it.
Chris Schultz
Carpal tunnel level member
- Location
- Minturn
Invest in equipment? Yard space? Why is it so hard for companies to invest in the personnel to operate, maintain, and generate material for the equipment?
My goal is to run two crews. One with the big toys for big projects and big trees, and a satellite crew with smaller equipment and smaller overhead.
The purpose of the satellite crew would be to be able to price small jobs at a lower rate, perform work with smaller staff requirements like PHC and planting at a higher profit margin, and to add bodies to main crew when needed. Satellite equipment becomes redundant/backup as well.
50% net is probably only obtainable by preservation/PHC companies, and still a hard number for me to believe. It could happen, in the right market.
Serf Life
Been here much more than a while
- Location
- Maine Island
Depends on how good ones instagram account is…
Serf Life
Been here much more than a while
- Location
- Maine Island
According to my accountant, my business has turned next to no profit as I put as much as I can back into it. My quality of life isn’t degraded and we’re not destitute so I’m not working for free, but on paper I am.
Serf Life
Been here much more than a while
- Location
- Maine Island
My current goal is stay small and keep getting the best gear for minimum down time. Continue the grind to pay off equipment and eventually buy a lot/foreclosure for a shop and some kind of rental; keep home and work more separate. Once finances level out with work and life, drop a day or two a week to focus on our home farm/nursery and forestry jobs. I enjoy woods work quite a bit but make more money doing residential.
From my original post regarding this, I said “not paying myself,” meaning reinvesting all income. On paper, we have had exponential growth and profit every year. You have to claim some profit to be financiable by banks. For us, this meant some purchases became “personal,” as we accrued assets and staff. To me, there is a level of equipment expense that is necessary for longevity in this industry if you are in a market with a lot of transitional species planted for shade that now need to come down, and are removing trees every day. For me that will ultimately be around $700k-1mil.
A lot of our early income we did invest in employees- I started out paying the highest starting wage in our area, because equity is important to me. It didn’t have the effect I wanted, and for a couple years I had some pretty high paid “bodies” on the job. Oddly enough I have had a better ground crew since lowering starting wage. Numbers will be relative to markets on wage.
flushcut
Been here much more than a while
- Location
- Delavan, WI
Correct they work for a company for one year and start their own show.
My ultimate goal is to be able to step back enough to get my MS and start playing around more with our approaches to preservation.
OasisTree
Branched out member
- Location
- Central Missouri
There's the point I like to see...incentive structures. In my opinion the hourly rate idea is broken. It is a baseline, but there is nothing in it to keep production up. They just have to be on the clock. If you can somehow tie bonuses to an increase of net revenue, you can tremendously drive up production and efficiency. Also it allows you a bit of a buffer.. and if the work slows down usually the employees understand.
- Location
- North Carolina
I would love to know what companies use incentive structures. I think a vesting period is good were over a period of say 1-5 years it increases. If the company makes over x amount profit over the the job?, Week, month or quarter then a % of it gets shared with employes depending on the value brought to the company. Perhaps 35-50% of the profit sharing gets paid out right away and the rest at the end of the year.
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Light 14 or 16" narrow kerf bar for 200t or 201t- Started by southsoundtree
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