I started my tree care company in northern Michgan almost exactly two years ago. When I started i bought what I could afford but now the equipment is costing me more in repairs and downtime trying to fix stuff. I need newer equipment to be more productive and safer but I dont really want to take out a loan from the bank because we have about 4 months of downtime in the winter and dont want to be on the hook for the payments during that time. I know a couple people that may consider investing in the company due to how rapidly we are growing, i was just wondering if anyone has an expierence with anything like this??
Investors in company
- Thread starter treejohn
- Start date
rfwoodvt
New member
- Location
- This side of eternity.
Investors are like lenders. They have a tendency to be very demanding and justifiably so. Think very hard before you give anybody significant control over your company or you may soon find that you no longer have control.
southsoundtree
Been here much more than a while
- Location
- Olympia, WA
Can you make the payments, and save 4 months worth of payments (or come up with that money with other sources for this year during your down time)?
Do you need/ can your market support a higher rate for your services?
Keep control over your company.
Seems like its a hard sell to ask someone, "Would you like to invest in my company? I need money because my equipment keeps breaking down, and I can't afford to keep fixing it.".
Spending money on fixing in order to make money to buy better equipment sucks, and is common.
Good luck.
Do you need/ can your market support a higher rate for your services?
Keep control over your company.
Seems like its a hard sell to ask someone, "Would you like to invest in my company? I need money because my equipment keeps breaking down, and I can't afford to keep fixing it.".
Spending money on fixing in order to make money to buy better equipment sucks, and is common.
Good luck.
RopeShield
Carpal tunnel level member
- Location
- Ontario, Canada
My experience is that if you do not have the money to repair or replace your equipment, something is wrong.
I do not know your situation.
1. Mine is we need to charge more to cover the cost associated with the equip and overhead in general.
2. Cover the loss in the depreciation of the equip.
3. And sometimes take it easy on the equip. What it is capable of doing and trust only those that handle it properly.
Few years ago My accountant said you need to double your rate.
I have on some jobs and others well are just lost to cheaper bids.
I am the most angry when the job I have been awarded and performed is done at a loss or low profit.
Loosing the job to lower bidder does not hurt as much, in the pocket or the ego.
Sometimes an investor can bring clients, work and profit to you.
All the best!
I do not know your situation.
1. Mine is we need to charge more to cover the cost associated with the equip and overhead in general.
2. Cover the loss in the depreciation of the equip.
3. And sometimes take it easy on the equip. What it is capable of doing and trust only those that handle it properly.
Few years ago My accountant said you need to double your rate.
I have on some jobs and others well are just lost to cheaper bids.
I am the most angry when the job I have been awarded and performed is done at a loss or low profit.
Loosing the job to lower bidder does not hurt as much, in the pocket or the ego.
Sometimes an investor can bring clients, work and profit to you.
All the best!
tomthetreeman
Participating member
- Location
- Rhode Island
Two years is a short time to build up enough capital to be in a position to replace expensive equipment. I would lean towards a loan because the investor may wind up being an unwanted 'partner' down the road, whereas the loan has a clear and determinate time frame, a beginning and an end.
I have loans on two trucks and a chipper, and no way could I just buy another one if one were to become obsolete. Luckily, my stuff is relatively new and in good condition, so it pays for itself and then some. You also have to constantly keep up with problems. Try to stay ahead of them, because when they start adding up, it sucks. Preventive maintenance can be expensive but not as expensive as the alternative. Good luck,
-Tom
I have loans on two trucks and a chipper, and no way could I just buy another one if one were to become obsolete. Luckily, my stuff is relatively new and in good condition, so it pays for itself and then some. You also have to constantly keep up with problems. Try to stay ahead of them, because when they start adding up, it sucks. Preventive maintenance can be expensive but not as expensive as the alternative. Good luck,
-Tom
- Location
- Sioux Falls, SD
I just got a loan for a bunch of equipment and they let me do quarterly payments so then I only have one payment to worry about in the down months, and so far this year I am ahead and the bank is letting me defer to next year so I don't have to worry about making any payment all winter at all. Find a good bank and banker who are willing to work with you. If you can show the promise and growth you think you have, there should be no problem with the bank working with you.
treehumper
Carpal tunnel level member
- Location
- Ridgefield, NJ
Investors want to see a return on their investment, or ROI, (obvious, I know), so they will want to see a plan for your business to determine how the growth will be achieved over the next five years. What plans do you have to grab more of the market? How will you manage the expansion? New equipment purchases, employees, etc....
What kind of investor? Angel, venture capitalist, silent partner, active partner? Will the hold equity in the company? What percentage? What do they bring to the table besides money that will help you achieve your growth plans?
Right now it sounds like there is no plan outside of running your own tree business. Have you analyzed your spending and performed a cost benefit analysis, maintenance of existing equipment vs. purchase of new?
First and foremost, you are a business owner. Secondly, you are an arborist. That's the hard reality of being "your own boss". With 4 mths of downtime you should be able to do a serious overhaul of your equipment to get it up to par so your in season repairs and downtime are minimized.
What kind of investor? Angel, venture capitalist, silent partner, active partner? Will the hold equity in the company? What percentage? What do they bring to the table besides money that will help you achieve your growth plans?
Right now it sounds like there is no plan outside of running your own tree business. Have you analyzed your spending and performed a cost benefit analysis, maintenance of existing equipment vs. purchase of new?
First and foremost, you are a business owner. Secondly, you are an arborist. That's the hard reality of being "your own boss". With 4 mths of downtime you should be able to do a serious overhaul of your equipment to get it up to par so your in season repairs and downtime are minimized.
Jeff_Cochran
New member
- Location
- Memphis TN
do a home equity line of credit and only use that for advertising and loan payments in the winter then you can pay yourself back during peak season.
- Location
- Pepperell, MA
Here's potentially a simple piece of advice that might help:
If you haven't already, and I didn't see it mentioned, how about you go find & establish a relationship with an accountant who could better advise you in terms of finanacing the needs of your company based on your actual numbers?
If you haven't already, and I didn't see it mentioned, how about you go find & establish a relationship with an accountant who could better advise you in terms of finanacing the needs of your company based on your actual numbers?
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