Going from part time to full time

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4Trees

I started my tree service business five years ago to make ends meet. Now my full-time employer is offering early retirement, i am wondering if i can make it with the tree business. I've been trying to build my business and do good work, including ISA certification in March. Up to now my expenses have run about 1/4 to 1/3 of my revenues, with only occassional part-time help, no workmens comp, and i do most work by myself. I would appreciate any advice on how this will need to change if i go full time. This and any other tidbits i should consider would be a big help. Thanks
 
I just did it this year. Depending on what your overhead is and how many hours a day you want to put in, I suggest the following:

1) Get a good accountant and learn Quickbooks (WAY easier said than done)

2) Find a payroll company that will do WC insurance per pay period. Less surprises and less $ up front.

3) Make sure your equipment is A+ before you do this.

4) ADVERTISE

5) Be prepared to say goodbye to large sums of money for reasons you could not imagine before

6) Hire good people and treat them well.

7) Work hard because the sleepless nights suck

8) Have fun! :)

That's all I can think of right now.

-Tom
 
You also need a good sense of humor. That's partially number 8, but should really be number 1. It's hard, no doubt, but if you are a hard worker and a good salesman (with the ability to rooollll with the punches), you should do well. You also need to define your market and target it, don't waste time running around being the lowest bidder out of your zip code.

-Tom
 
Good point Tom! The zip code rule is a definite. I drove 45 min this morn for a bid I really do not want. He says the "other" company was $100 cheaper. I made it clear I had 1.5 hours round trip for a two day job= 3 hours, "Do I make myself clear?" the other company is 10 min away. Be prepared for let downs break downs and the inevitable cut throat. Good Luck! Being in business for yourself is often, but not always, very gratifying.
 
Thanks Tom and Cre, i have only advertised in two small items so far and most of my business has been by word of mouth, i bid pretty low so i can give a good deal but i think i need to raise my prices if i go full time. How much actual net income do you think is reasonable after all your expenses are handled? thanks again
 
BE A GOOD SALESMAN AND BUSINESSMAN.

If you do venture out of your defined territory, know why. Were you recommended? Did the client see your advertisement somehow? Call them and qualify them? Explain to them it will likely be that you are slightly higher in your price due to the additional travel time but will offer superior service. What is the deciding factor for the client, price or quality of work or service?

Take a business course, learn how to develop a business plan. This in itself will really open your eyes to the marketplace and running a business.


Surround yourself with good advisor, from your accountant and banker to your equipment supplier and repairperson.

Seek out a business mentor. I'd suggest someone familiar with this type of business but not necessarily in the tree business. Make sure it's someone who has built a business you admire for how they operate and the service the provide.
 
Okay, New Jersey, i am in Northern Virginia. Trying to figure all of this out, thanks. My tax man/accountant seems to be a good man and says i need to upgrade from LLC to S-corp. He is willing to help for a decent price.
 
S-Corp is good, bc you can be an employee and take distributions that are free from SS taxes equal to your annual pay. So if you make 50K as an employee, you could potentially take 50K in distributions that are sheltered from some (not all) taxes.

As to your net income question, I can't really answer that, it really depends on the size of the business, overhead, etc.

-Tom
 
Thanks again, any ideas on a good ad medium? Back in the 60s my dad did landscaping in the LA area, he would have us kids drop 3x5 cards at each house. He also did yellow pgs but it cost a lot.
 
thanks for the ad tips, i will employ these and see how it goes. We added a logo recently. Do you think the magnetic vehicle signs are as effective as the painted-on signage?
 
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thanks for the ad tips, i will employ these and see how it goes. We added a logo recently. Do you think the magnetic vehicle signs are as effective as the painted-on signage?

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You can get good vinyl signs. Much better than magnetic. Won't blow off or get stolen, either.

I bet the vehicle wraps that look super cool are super spendy.

I just wouldn't advice being the anonymous tree service.
 
"5) Be prepared to say goodbye to large sums of money for reasons you could not imagine before"

hahahahahahahhaha!
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When you first start out as the owner/operator you will see your gross income kinda skyrocket, but learn to ignore that. Your net income after taxes and insurance may even look better than ever, but ignore that too.
It's your net income per hour of time invested that will actually drop, because when you work for someone else your time on the clock is generally just labor/field work or whatever is in your job description.
Now as the O/O you will spend countless extra hours on the phone, driving, advertising, hiring/firing, maintaining equipment, fixing fences, dragging kids to weekend estimates so you can spend time with them, and a multitude of other mundane but critical tasks that you will receive zero compensation for (thus forcing you to raise rates)(and keep a good sense of humor).

Good luck, and stay focused whilst climbing and cutting.
 
Trees, a Very wealthy friend, and someone I consider to be one of my mentors told me once that despite having one of the largest painting companies in the state that he absolutely hates paint. Doesn't like the smell, doesn't want it on his hands, doesn't even want to talk about it if he doesn't have to. The point of him telling me this was to illustrate that painting was the vehicle for the part that he absolutely loves, and that is the sale, the customer interaction and the daily look at the guts of his business, looking for another way to improve his net. If you engage in those things already when you are working for someone else then you can count on being successful in the tree world. The most important consideration in moving forward is YOU. If you drove projects with efficiency, solved problems with little or no guidance, and utilized true leadership and sales skills then you WILL be fine.
 
Maximus, I feel bad for your friend. I totally get what you are saying about needing to be able to rise above the work and make the sale, but man, if I didn't like trees and have a passion for CARING for trees, I'd be doing something else. Something that I believe in. Making a sale for the sake of the sale is not where it's at for me.

-Tom
 
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...dragging kids to weekend estimates so you can spend time with them...

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Totally.
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When I started off full-time, I invested heavily into advertising.

I did not take the road more traveled and invest in equimpment. I took a humble approach. I had "beater" trucks and hauled brush for about 5 long... miserable... years. It killed me looking like Sanford & Son's Tree Care.
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I had competitors think I was a hack since I didn't have the nice equipment. Hence, I started www.not-a-hacker.com

So, I'm glad I took the road less traveled. Because I acquired a lot of clientele quickly. My rates were ridicously low and I was blowing away competition. I built a large customer base really fast that way.

In about 3 years I was able to say that 50% of my calls came from repeats and referrals. To this day, it has stayed the same. The contrast is I now gross more than 400% than my first year in business. Every year I have grossed %25-%30 higher than the year prior. (I netted 20% last year).

When things look bad... advertise (but, be deliberate and effective). I have seen "word of mouth only" businesses that have been in business for 30+ years and when the economy tanked, guess what? So did they. If I didn't advertise more aggressively in the first and second quarters of '09, I would have gone out of business. However, I was driving the business with new clientele because I chose to stick to an aggressive/effective advertising plan.

You can advertise on Google free by the way...
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