Dealing with growth

Brando CalPankian

Brando CalPankian

Carpal tunnel level member
Location
Pine City, MN
I'm having a good problem that is overwhelming all the same. I have found 3 employees, one journey level climber and two ground men, who want to work for me. They're fine with being contractors, as hiring folks is expensive. My problem is, I feel like my company is growing at such a break neck pace. I'm not sure how to keep up at times.

We have quite a bit of work, and the ability to drum more up if needed. That said, we all know work ebbs and flows. Also, I'd started the company as a way to do side work legally. Me being an arborist and having the experience I do has lead to really rapid expansion without meaning to. I went from wanting to just have a one ton to a big dump and decent chipper. It's all happening so fast. I'm scared we're going to outgrow my business sense and I'm going to fuck something up.

This isn't a humble brag at all, I'm honestly terrified. As we started to grow, my vision became more clear that I want my company to help people and my community, starting with those who support the company. What if I let them down? How do I ensure that our growth is sustainable and that it leads to the outcomes I want (like health insurance and retirement plans for the folks who are choosing to work with me).

I'm not paying myself by choice because I LOVE doing the work and am elated to be growing the company. That makes it so everything goes back into the company, and eases the tension of needing to support our life vs pay the company. Still, I get scared. Like, what if I don't find enough work? What if the economy tanks? What if what if what if?

Do other owners feel this way? Does it ever get better? Are there things I need to be making sure I do to safeguard the company?

So far I've done everything I learned in school and through 15 years of experience to make sure the business is protected. I'm in this weird zone where I don't have cash flows enough to hire full time employees, but the workman comp and cost of hiring people is too outrageous to have part timers. It's the first negligible thing I've had to deal with, I guess that's my most obvious issue.

Any advice/words of encouragement here are helpful. I'm making a company that people want to work for, which is so amazing. I love that it's happening that way. Just kind of terrifying too. I don't have much family or anyone to sounding board this stuff off of, so I figured I'd ask the folks that have done it!
 
Triple check if they will be contractors or illegal employees.

Bill for work to pay for hiring people.

Hiring people is expensive if you don't charge enough to the customer and/ or you're paying people to do machine- work.


Buy the labor-/ injury-/ frustration- savers.





Great signage on trucks!!! (Not super expensive. Super readable.)

Avoid getting locked into expensive advertising.

Iron is resellable, even at a loss.
A bank doesn't want your chip truck. They want to find a way for you to make payments possible for you to keep it.
 
The truck advertising is on my list of todos. I know nothing about how that works or where to look. I've got super high profile jobs and tiny logos right now. Pisses me off tbh.

Are all workman's comp company's paid in full? The ones I find make me pay in full to hire someone (5-10k).

My state frowns on contractors. It'd be borderline illegal. I don't like it and it feels not worth the risk.

What do you mean by the injury/frustration savers? Mechanize things? Working on that. Have a good rental yard here and my chipper/truck help a lot. A good bit of rigging and higher end climb stuff to help the climber out.

I own everything outright as of today. My savings for the company is drained but growing. That's part of where hiring is hard. I need equity but need people to help build equity.

Luckily me estimating accounts for this stuff. I excelled at accounting so I know how to amortize/depreciate. My accountant double checks my logic and so far I haven't had to pay her.

That's all excellent advice. Thank you
 
Like @southsoundtree said, make SURE they are contractors if you are calling them contractors. Here is some IRS guidance about the differences.

Contractor hourly rate should be significantly higher. If you have a contractor working 40 hours per week 52 weeks per year, that should cost you more than having a full time employee. You are just transferring expenses to them, they don't go away. Some contractors don't understand that. Some don't report income, so don't pay taxes. Etc... So consider hiring them full time if you are going to have them running for you full time. Yes, its expensive, but you need to charge accordingly. Rough estimate of how much to charge: My brother-in-law who is very successful in business (not trees) and does some business consulting suggests charging 2x their total expense to the company. I'm less aggressive and aim for about 2-2.5x their hourly wage. My goal isn't that they make me a bunch of money, but rather that they have a good job, help us serve clients, and generate enough revenue to keep/replace up equipment, etc... If you pay an employee $25 per hour, the total expense to the company is in the neighborhood of $40-50 per hour.

You said it is important that you provide your workers with retirement and health insurance... You don't provide health insurance and retirement packages to contractors - you provide those to employees.
 
As to some of the other questions:
Nobody can predict a recession, etc... Move ahead with doing good work and providing great service. Even in a recession there will be work - some people will be willing to pay less. Others will still appreciate your attention quality when the unemployed whoever that has a pickup truck and chainsaw suddenly decides he is a tree service company and willing to work for $20/hour and a case of beer.

When I'm marking timber and leave a nice young tree sometimes the owner will say "well, what if lightning hits that before we come back to harvest". My reply is always "What if a truck hits me on the way home? Oh, my goodness, I could die. I'm spending the night at your place!" They usually get the point. We have to move forward with a good plan. Be aware of the risks, but not frozen by them.

My next tip: figure out what you do well, where you serve your clients best, and what you enjoy doing (hopefully those are the same thing). Focus on growing those - always say "yes" to those jobs. You might take on some jobs that don't fit that perfectly, but those should just be "filler" for when you aren't super busy with the first priority. If all goes well, you'll start to say "no" to those because you have a full schedule of the first priority jobs.
 
The big red flag in your post to me was that you want to keep people as contractors vs employees. Bite the bullet and get them on workers comp as legit employees. It is a heavy lift but it is worth the stress reduction and it is better for the bottom line than paying people as contractors. Employees for a new company understand that you aren’t going to be able to provide every benefit right away. We hired our first employee in 2022. We are up to 3 employees now plus my wife and I also on the company payroll so 5 total. This year we added a 401k with matching and in 2024 my goal is to get healthcare but that might have to wait until 2025. Every company has to start somewhere. The employees understand that. And if they don’t, this is an industry that they can find other work elsewhere.

The work comp bills can be hard to swallow sometimes but just write those checks and bust out some jobs to pay them. At a certain point it just becomes money in money out and you just ignore it and keep moving forward.
 
One of my best/smartest business moves I made was to find a day-labor company to 'hire' my crew. TOTALLY legit in Minnesota, maybe elsewhere. I talked with the owner and to the company who contracted for the insurances. I paid him something like 23-30% of payroll and he paid 'my crew' as if they worked for the day-labor/payroll company. All I did was pay him twice a month, in one check, for hiring the contract employees.
 
I think I need to make some clarifications. Apologies if some things were unclear, I had a lot running through my mind and muddled things a bit.

I do not want to have to use contractors except on rare occasions. I have three prospects for employees that I'm wrestling with the idea of hiring. My issue comes with us being so new (literally 4 months old), having inconsistent workloads, and the risk of people jumping ship. I'd like more information from first hand experiences with navigating the workman comp issue, which I've been quoted at $5-10k per head just to hire someone.

@ATH , your points regarding contractors was spot on. I'd been paying about 1.75x hourly rate, so I am probably a bit off there. I'll shoot for closer to 2x. That will help me get a more realistic picture when it comes to placing figures in bids to make sure both parties are satisfied. Also, the tips on navigating my fears here were helpful. It's not a race, and things will happen. Making sure I cover my bases and think before acting will help. And correct, my hopes to provide benefits are a long term goal for employees, not contractors. My goal is to not have contractors.

Part of the issue is just how fast things are growing, which I think is where things got lost in translation. Because of the pace of growth, I've been confronted with hiring employees without having comfortable equity and consistent workloads vs contracting to fill in, test them, and make the equity to do so. 4 months of operations has not been long enough to let the dust settle. Maybe I need to be more patient, keep in contact with these people, and let things calm down before jumping head first into something unsustainable.

@RyanCafferky is your work comp a paid upfront deal too? I totally get what you mean by avoiding contractors. I worry about over extending my finances, especially in a slower season. How did you determine what type of employee to hire first? I have a super new green guy, a kid who's worked in trades and farming, and a crew lead level climber who found my company and are begging to work. It's a tough choice if I only can choose one.

@Tom Dunlap Can I call you after work today? I've actually been looking in to this but have had a tough time finding a company that will cover tree care operations. It seems like the safest way to go while things are inconsistent so that I can be more of a manager instead of a glorified foreman. I want to be able to let the team I've found run, but hiring them is a 30-40k dollar investment that I don't have right now.

@southsoundtree yupp. Contractors legally where I am are supposed to be fully autonomous. They are supposed to have their own gear, PPE, trucks, etc. They're not supposed to touch or need anything from me. It puts me in a rock and hard place scenario.

Thank you all for your meaningful input. It's really helpful.
 
What is your goal?
It’s a marathon and not a sprint.
Set many micro goals and take one or two on at a time vs trying to get to the end goal all at once.

Personally I’ve promised myself only taking one loan on at a time. If I wanted to go in mad debt I could have three crews all bumpin. I don’t want that headache.
 
evo said:
What is your goal?
It’s a marathon and not a sprint.
Set many micro goals and take one or two on at a time vs trying to get to the end goal all at once.

Personally I’ve promised myself only taking one loan on at a time. If I wanted to go in mad debt I could have three crews all bumpin. I don’t want that headache.
Click to expand...
My goal is to focus on preservation work. I can't compete with every tom dick and harry with a chainsaw doing giant removals for $200 and a case of beer. I can focus on high quality pruning, plant health care, and consulting. Down the line I want to also get back in to line clearance, but that is a ways away. My short term goals are to be able to afford a full crew with a crew lead that can do 70% of what I can. That way I can focus on teaching, bidding, PHC, and stepping in when we get big jobs or things he/she isn't comfortable with. Also, for my wife to finish her master gardener schooling and begin doing horticulture/permaculture work.
 
Brando CalPankian said:
My goal is to focus on preservation work. I can't compete with every tom dick and harry with a chainsaw doing giant removals for $200 and a case of beer. I can focus on high quality pruning, plant health care, and consulting. Down the line I want to also get back in to line clearance, but that is a ways away. My short term goals are to be able to afford a full crew with a crew lead that can do 70% of what I can. That way I can focus on teaching, bidding, PHC, and stepping in when we get big jobs or things he/she isn't comfortable with. Also, for my wife to finish her master gardener schooling and begin doing horticulture/permaculture work.
Click to expand...
Same-sies!
 
Brando CalPankian said:
My goal is to focus on preservation work. I can't compete with every tom dick and harry with a chainsaw doing giant removals for $200 and a case of beer. I can focus on high quality pruning, plant health care, and consulting. Down the line I want to also get back in to line clearance, but that is a ways away. My short term goals are to be able to afford a full crew with a crew lead that can do 70% of what I can. That way I can focus on teaching, bidding, PHC, and stepping in when we get big jobs or things he/she isn't comfortable with. Also, for my wife to finish her master gardener schooling and begin doing horticulture/permaculture work.
Click to expand...
Being small with employees is a tricky one. Not a jab but employees are fickle things that ebb and flow, and if they leave you can be in a world of hurt if your business is structured as being employee dependent.
The employee perspective is 'this is a job'. The employer perspective is overhead and balance sheets. Any number of variables can happen with employees from a distant relative that falls ill and needs care or other related things that happen. Genuine things, that can leave you high and dry. Keep your business model adaptable.

Sounds like your moving in the right direction, there is plenty of red tape details that are city/county/state specific such as employee vs contractor laws, DOT, and on and on... Focus on these and build the framework for how your business operates.
 
Treetopflyer said:
We pay as we go with work comp ! It’s awesome and based on lack of claims history I just got a 2700 plus dollar deduction there
I was very impressed but look into pay as you go programs
Click to expand...
Who do you use? That's what I WANT to do. Idk if anyone will let me being so new. If I can get the initial payment down then do pay as we go based on workload it'd be worth it.
 
evo said:
Being small with employees is a tricky one. Not a jab but employees are fickle things that ebb and flow, and if they leave you can be in a world of hurt if your business is structured as being employee dependent.
The employee perspective is 'this is a job'. The employer perspective is overhead and balance sheets. Any number of variables can happen with employees from a distant relative that falls ill and needs care or other related things that happen. Genuine things, that can leave you high and dry. Keep your business model adaptable.

Sounds like your moving in the right direction, there is plenty of red tape details that are city/county/state specific such as employee vs contractor laws, DOT, and on and on... Focus on these and build the framework for how your business operates.
Click to expand...
Agreed, employees are first and foremost people. I'm hoping that having lifts available to rent, decent equipment, and busy part time work will help compensate for the inevitable people factor.

Soooo much red tape. It's chaos. I get a bit geeked out about it. I get nervous I'll miss something and get fined out the pants.
 
Brando CalPankian said:
Agreed, employees are first and foremost people. I'm hoping that having lifts available to rent, decent equipment, and busy part time work will help compensate for the inevitable people factor.

Soooo much red tape. It's chaos. I get a bit geeked out about it. I get nervous I'll miss something and get fined out the pants.
Click to expand...
Yup! My bookkeeper walked out on the job (my CPA’s employee). She had or took with her the login information to DOR. So now the new bookkeep can’t pay excise tax.
Two letter requests for letter ID’s (an access requirement) sent via USPS, and 3 phone calls (about a dozen emails between the new bookkeep and I) it’s all sorted!
Not like I have anything better to do with the moments of my life :rolleyes:
 
evo said:
Yup! My bookkeeper walked out on the job (my CPA’s employee). She had or took with her the login information to DOR. So now the new bookkeep can’t pay excise tax.
Two letter requests for letter ID’s (an access requirement) sent via USPS, and 3 phone calls (about a dozen emails between the new bookkeep and I) it’s all sorted!
Not like I have anything better to do with the moments of my life :rolleyes:
Click to expand...
Oh my goodness that's terrible. I'd never contemplated that. Nearly a worst case scenario. Glad it got sorted out.
 
You must log in or register to reply here.

New threads New posts

Kask Stihl NORTHEASTERN Arborists Wesspur TreeStuff.com Teufelberger Westminster X-Rigging Teufelberger
Back
Top Bottom