high or low overhead?

kellyp

kellyp

Location
portland, maine
since i seem to have alot of extra time these days to visualize my future tree biz, i was wondering what your philosophies were regarding taking on alot of debt in the first few years of being in business.

now, i see myself always as a small/solo operator that will partner up with other licensed arborists in maine to do jobs that can be done by say, three. meaning that we will do takedowns, but not ones that would need a crane. mostly residential work, maybe some lightweight rural forestry work. mainly featuring pruning...

my inclination after my relocation this spring is to just get a (largish) pickup truck, ideally with boxes, and a rack, probably used, pay for alot of it outright, and get to work. and then the following year look at a bigger set up with a dump. i am concerned that it will be too much pressure if i take on a 40k+ new truck and have high monthly payments while i am getting set up in business (as well as adjusting to my new life).
my pro arborist friend thinks i should just go big at the get go. he thinks i should custom build a truck with a big bed, big towing capacity and a dump, and get to work!

what would you advise?
plus, is there a particular model of truck you are partial to? it seems to be different depending on the region...
 
I actually agree with you.starting out especially in a new area for you,low overhead and low stress is good.If you are stressin out about makin payments right away you wont even enjoy your work!start small until you build a bit of a customer base to support payments and grow incrementally. Slow and steady.
 
Equipment that you can "multi-task" with is a very good idea. A 3/4 or 1 ton truck can be used as a multi-purpose vehicle. Same with a dump bed trailer.

I started out with nothing related to tree work, as the result of an accident, and another business opportunity, I owned a bucket truck. I was patient, and saw what was going to benefit me. I kept my eyes open for used equipment that had life left in it and was affordable.

A lot of tree jobs CAN be done with little equipment, the thing that they require is knowledge, and a plan to make it happen.

Depending on the economy, used equipment is easy to find, just don't forget, when times get tough (economically) people put tree work on the back burner!
 
Kelly, I cannot encourage you enough to go with your gut and stay small. Plenty of time to go big if the desire, need and finances allow later on.

If it is your intent to work by/for yourself with intermittent relationships/partnerships on an as needed basis, taking on a huge overhead before you are even established makes no business sense at all. In fact, that's terrible advice.

As the new kid on the block, so to speak, in a new area, you are going to have to establish yourself as a quality and reliable worker. That comes first. Small is not synonymous with low rent as long as you promote yourself appropriately.

I always listen to other people's suggestions of going big and spending a lot of money with a grain of salt...it is easy for them to suggest when they are not the backer. Tree work is seasonal at the best of times, let alone the reestablishment in a new area with no client base. You need to have the ability to weather the slack times that are inevitable. Having large payments you must meet is a recipe for disaster.

I also like TD's suggestion of multi-use equipment. Think versatile, relative to what you want to offer in your business. But keep it reasonable to exactly WHAT you are going to offer.

Sylvia
 
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At most I would start with a 3/4 ton pick up and a small chipper.

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And this combo has been our mainstay for 25 years...full time, not just as weekend warriors.

You need to find out what works for you in your particular niche. There is no point in having thousands of dollars in equipment sitting around for the "once in awhile" job.

For technical takedowns requiring a crane, we hire one. We are hired by another company who has a bucket truck but no climber for those times when they need someone in the tree that there crane can't access.

Sylvia
 
when i started out i borrowed enough to get a one-ton with no dump, already 10 yrs old and fleet maintained. used that for a year making dump runs til i had enough business for a full-time employee and then bought a brand new 6" chipper. chipped into that no-dump for about 8 yrs and forked the chips out while every tree guy in seattle laughed at me. i didn't care - it worked. paid off the chipper. bought a brand new cab-over w/custom boxes and dump after 8 yrs of business and am still not too sure about having taken on that overhead, at least in this economy. i guess i never meant to get big - just like climbing and trees and wanted nice gear. running a crew of 3 now and that's just about right. excellent advice about stress over meeting gear payments detracting from your quality of life and enjoyment of work. really really true. don't get trapped into running harder than you meant to run.

my 2 cents.
k
 
Here's my take after owning 3 businesses one of which crashed in billowing flames...

Lower overhead is always better.

That doesn't mean don't take debt, it means keep overhead down. Everything else depends on the strength of your market, your perspective and your goals. If you want to really make a go at running a full-on tree care business, you need a chip dump truck, a chipper and a reliable, STRONG groundie... plus all the usual tools and stuff. So that would mean debt for most of us. Beyond that, lower is always better. Spend a portion on marketing but be smart about it, use the web and business networking to generate leads. Phonebooks are dying... don't waste your money.

But you can get by on nothing but the tools you can carry in a compact car if you're willing to coordinate with a contractor for debris removal. Jobs take longer and you have to share with the debris guys so you make less money... but you need less money cuz your overhead is practically nil.

If you go all in during the high season and finance a brand new truck and chipper and a stump grinder and a giant phonebook ad because business is booming then you're gonna be unhappy when December rolls around.


If you have a good market, know how to tap it and enough credit at the bank, I'd go the chip truck route but be conservative, shop carefully and be aware of where all your money goes. If you're young and good, you can make a damn nice income without having to work for some chowderhead five days a week.


PS.
The business that crashed in flames... it was very high overhead... downtown studio location, lots of expensive technology... stupid really. It was more than high overhead that crashed that business but it was the overhead that caused the billowing flames.
 
What are you equipped with now?

A flatbed truck, that may be able to be later set up with a dump mechanism, could be a good start. 3/4 or 1 ton could be good, though they are in more demand that a larger truck that might have less miles. Older F600 or such.

Look for the deals while you are in the slow season if you have something to work with right now. A trailer can be a good investment that will later fit a larger truck, but be able to carry brush, chips, wood now.

I started 2.5 years ago with a half ton, long bed pick-up, and added a wooden box on the bed, and a superlight trailer because that is what I could afford while accumulating other gear. Rental chipper/ grinder when needed, otherwise hand unloading at the dump.
Then an old 9" chipper that was being replaced by the owner with a newer chipper, for $2400.
Then I was able to buy a 1990 ex-asplundh truck from a retiring arborist, for $3900.
Old stump grinder from the same guy for $2400. Started out with a plywood/stud ramp into the back of the P/U, then had ramps fabricated.
Each piece of equpment needed some work/ $$ input.
Recently, I got a deal on a heavier trailer. Next thing will be to upgrade the chipper.

If I am working near the dump, I'll sometime use the pick-up and 5x10x2' trailer, and just lay the brush in, and cut it up as I go, compacting all the time. I can probably get 2000-3000 pounds of brush in the bed and trailer together, leaving more small diameter firewood onsite than if I was chipping. This allow me to run some errands/ bids during the work day easier as well, as I am not driving a 20,000 pound rig around town.
This works well for pruning. A small 6" chipper is probably adequate for most pruning, and allows a lighter truck, but be careful as overloaded rigs wear out everything and you'll be happier to have spent $2500 more for a larger truck than $2500 on a new transmission. I speak from experience. Half-tons are not meant to pull a heavy chipper and chips. Its adequate for chip on site, though.


Start slow and build as you go. There will be a bunch of expenses that will add up.

Have a nest egg.

If I were to do it again, I'd have gotten a 3/4 or one ton with a heavier trailer to start, then upgraded.

I'd suggest that whatever you get, have some professional signs made for the truck that can be mounted on the walls of the truck (providing you extend the p/u bed sides), which can later be moved to a larger rig. Right now I have vinyl signs on the body of the pick-up. These will have to be removed/destroyed, and I'll have to start from scratch when this truck is upgraded. Also, the way that they vinyl lettering is applied uses a transfer paper that pulled some of the micro-blistered paint from the chip truck.

Professional signs are a worthwhile expense that I wish I'd done sooner. You can start small and add more signage as you go, too.
 
I also started with a 3/4 ton pick-up and would barter/trade/rent a 6" chipper. I hung canvas tarps as my chip box and forked it out. I went to Vermeer to look at chippers and drove home with a used 9", $1200 less in the bank and a $300 monthly payment.
The truck filled up even faster and my back and lungs got tired of forking out chips. Plus I was wearing out my pickup. Looked into outfitting the truck with a dump kit. The cost of doing it to a 3/4 ton didn't make sence. Found a used International chip truck for $11,000 and made it happen. Now with another $300 monthly payment.
The cost of maintaining the trucks and chipper was taking what little profit I was making.
My friend with the 6" chipper and little Mazda with ply wood box seemed to enjoy his daily work alot more.
Stay as small and simple as you possibly can. Don't borrow money if you don't have to. Write out a business plan and get an accountant.

FWIW
 
Thanks all for the excellent and detailed advice! Besides being edifying, it was very entertaining to hear your start- up stories. I am probably going to end up with a used crew cab 3/4 ton to start,(because the truck will have multiple responsibilities), no dump, (a relief not to worry about that for now!), and maybe, just maybe I'll have enough to swing a small used chipper. Probably not right away though.
Pics will be posted asap!

I feel like I survived this year chiefly by having low overhead and fortuitous contacts. I am a little chagrined to admit that I am going the hatchback route right now, but not at all ashamed of the hands that I hire depending on what the job needs. An expert climber and all around seasoned city tree person, with a truck? How about a board master certified arborist who can talk every last detail of the prized shrub to the client, as well as sneak yucca into the greenwaste? (Also with a truck). Groundsperson? Better have a truck! Only as good as my help. Very grateful to them.

So, for now, I hire what I need, keep my cones in the front coat closet and my polesaw next to the piano, and look ahead...
 
Hey there...

I've been low overheading for 6 years.

I started out with a scooter and a cut down trash bucket...the saws went in the trash bucket in front, rope and harness in the basket on the back, helmets in the saddlebags, groundie hubbie driving and me on the back!

Went from there to a van, which I still have, due to our commercial vehicle licencing laws I can double the van as my work vehicle and private vehicle. All my gear, 5 saws, climbing, rigging gear, pole saws pruners, signs, toolbox, cones, bits and pieces all fit in the back, I have room for three passengers, or groceries, or whatever in the front. The van is secure and I have all trades insurance on the contents.

I partner with a fellow who has a bucket truck and a dump truck, and another one with a crane truck, my landscaper buddy has a good size chipper....bottom line, I can get in and out of a job, with low overhead, make a few $$ off my buddies with the bigger equipment on a slight markup on their base hourly rate and we all go home happy.

For the times I use the bigger equipment if I bought my own it would be parked for far too long...not worth it to me. If I bought a dump truck, about the only thing that I might be tempted to upgrade to I could not secure my tools sufficiently, and I would not be allowed to use it for private use, no driving on Sundays or public holidays...besides finding somewhere to park it...I live on an island and commute across the water every day!

I say stay low overhead, build your reputation and client base, then re-evaluate.
 
Ha ha, sorry no pictures exist, just fond memories...
It was kinda funny, although after hurricane fabian I got around more easily than anyone!
 
I have worked for myself for ten years, started with a 9 inch chipper and a half ton pickup and shoveled chips for a year, broke the bank and bought a new dump the next year just to go two more years and sell it for a 1972 Chevy dump that I could buy outright. That is the set up I have now. I work 3-5 days a week and have a reliable groundie who is good with the schedule. I picked up a small tractor 4 years ago because I was sick of killing my back picking up HUGE wood and I bought a stump grinder this year. I own everything now and it is a lot less stress than when I had big payments ALL WINTER and no work!!!!! I work in Portland and that general area fairly regularly and I think you could make descent money with low over head and low stress. I would be glad to team up on a job or two. Good luck!
 
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I started out with a scooter and a cut down trash bucket...

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That has GOT to get the "unique start" award!!
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With everyone mentioning shoveling out chips and then going to a dump truck...if you can't afford a dump truck, do NOT overlook the advantages of a load handler. This inexpensive attachment to your tail gate will save a whole lot of (irritating) labor.

We shoveled chips for a very little time before we said there has GOT to be a better way. Have been using the Load Handler ever since. Still have yet to go to a dump bed. Not saying that wouldn't have been nice...just couldn't (wouldn't) justify the cost.

Sylvia
 
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I started out with a scooter and a cut down trash bucket...

[/ QUOTE ]

That has GOT to get the "unique start" award!!
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Where there's a will there is a way!
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On a another note, while you all are getting snow, we are getting buckets of rain and gale/storm force winds...going to Boston for Christmas...oh boy, I'll get to make snowballs, and snowmen!!!
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Hey Mattbc,

Tried to send you a pm, but I guess you are not accepting them. Thanks for the encouragement, I'd love to work just that amount of days if I can get away with it. I will definitely send word out to you when I get to Portland.

Kelly
 
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