Major Decision

Steve Connally said:
I look around me. What am I going to do when I retire in 6 years? No major players to work for. No foreman jobs I would want. No sustainable future in tree work with any hope of upward mobility or position changes. I can climb till I can't do it anymore then what? Nothing, simply no options. I can't see relocating until Jack is out of school. He's in 3rd grade now. When I can relocate I'll be as old as Moses. Nobody is gonna hire an old guy like that for anything. I knew a guy who worked until he couldn't stand or hold a saw anymore. They used to lift him into the bucket because his knees wouldn't allow him to climb up into it. He retired and died shortly after. What do I do? I'm thinking the MEK is the wave of the future. I'm trying to get on the wave before somebody else does and then it's even harder to make it work. I don't know if this makes any sense to you guys. Try to look at from my standpoint before you respond. I know it's utterly ridiculous to have a 350k(ballpark) probably like 330-335 when all said and done (350 allows wiggle room but I would likely come out under that with the mats and all) piece of equipment like that collecting birdshit 5 days a month because I'm at the fire station. It killed my profit margin when I had trucks and chippers and stump grinders, but again I had employee headaches out the wazoo. Multiple equipment and a ton of responsibilities as an owner operator. This would take away a lot of stress and wouldn't be as much of a drain when it's sitting. All I need to do is market and schedule after hours, and some maintenance. It makes sense in my mind. Please convince me otherwise if you think it's a horrible idea and a money sink hole of and investment. I'm all ears. I have nobody to talk to about this because nobody here understands. Here being in my area. I'm simply trying to make something for myself.

Carl, you are very financially smart. I'm not nearly where you are and I value your input. You've just gotta tell me like I'm an idiot.
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This is only my armchair opinion, and take it for what that is worth. The first step you need to take is to get yourself in business, LLC, S-corp, or the such. Make a list, and figure out what you need to do chronologically. If you want to start at A and get to Z it's a pain in the ass if you leave out a few of the steps to come back to later. Some you can leave out, but you need to identify what they are and when to come back to them. If your financing this Mek which will cost say 330K, I'd shoot for 370-390K. It may be bad business practice but you will need more buffer. What happens if you get hurt and need a month to heal? What if your kid gets hurt, and you need to take time for him? What happens if the build doesn't go right and you need to send it back for repairs ( I doubt they will send you a loaner)? It's not a IF any of these or other hangups will happen, its you need a plan and cushion for when they happen. Can you come up with a few 6-8K per month in payments with out the ability to work?
You have very well thought out strong points Steve, and they are some very strategic considerations you have made. There are times when you need to jump on the opportunity when it's there, you are the only one who can make this decision for yourself. Do you have any experience running a large K-boom? How much time will you need to get a feel for the machine? How much is GL insurance (and other)? How much do you need for startup costs? An accountant can charge anywhere from $500-$1500 just for getting your LLC established. How do you plan on advertising? To be a legit sub do you need to do a % of your own jobs, and if so what is that %? The machine is the easy part, you need to have your ducks in a row before you start plucking them off.
 
You're rite. I can start my LLC on my own. I've done it in the past. It's painless. I have no kboom experience. I've been told by Rick he thinks I'd have about 2 or 3 weeks learning curve on the mechanics of it as I know trees and have been running hydraulic aerial machinery for many years. He thinks I'd pick it up fairly well. As far as the cushion. After I bough it the only cushion I'd have is the cushion I would make off jobs. The purchase would wipe me out. I don't know what % of my own jobs I'd need. I have no idea. As far as advertising, mailings, cold calls, demo's, facebook ect. The insurance is about 7 or 8k a year for just tree work. It's really a stretch. I turned down their final counter offer today. They got pissy with me and I told them to ditch the attitude and not call me again. So I shot that bird dead. So for the third time i'm gonna table the idea. It's just not the rite time or the rite financing. Honestly its an emotional roller coaster. I get excited then crash, excited then crash. It's just a complete an utter bummer. One things remains. I love tree work and love to climb so if I can figure out how to find a happy place to work or a happy way to work everything will work out. A lot can happen in the next 6 years.
 
you know what you want, so just take the first steps to get it. Doors will open to you as you move along each step of the way. I hear ya on the crash and burn, up and downs.
 
Steve Connally said:
I turned down their final counter offer today. They got pissy with me and I told them to ditch the attitude and not call me again. So I shot that bird dead. So for the third time i'm gonna table the idea. It's just not the rite time or the rite financing.
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Steve things happen for a reason ......
I'm in the same boat your in as to looking at my future and restructuring a business.
We're even the same age. I have old injuries that are going to cut my climbing years short. I'll be lucky to see 5-10yrs. So I'm starting out again with a truck and chipper. Get my 2 yrs in and finance something easy like a stump grinder. Pay that off and finance a Mek. I'll have one guy with me and that's it.
BTW I like the idea of you buying a stump grinder to establish your biz again. You can run it grinding only .... no clean ups. Sub yourself to the landscapers and tree services. The more hp the grinder the more you will be called to perform. Guy around here has been doing it this way for years. He makes a killing with an 80 hp Vermeer. Just a thought. In the end you can show up with the Mek and put everything down. Then come back later with the grinder. Or have one guy follow you with it. You may meet someone one day that would love that position.
 
Why not do the mek thing when it makes sense and also climb/operate kn your own gigs? 350k is some serious money on one truck that is only out 4 days (if that) a week. When do you get to relax/go to church? Us tree guys have been known to get religious....just saying.
 
Lumberjack said:
That tax calculation is worthless, you pay tax on profit, not on gross. He is pulling a wage out already which should account for withholding.

But, 25% is taking 3 days off and working a half day.... rain could easily make that happen. Equipment breakdowns/service could make that happen.

Your hourly rate is as a sub, so you have to be competitive since subbing is 100% of your business plan, correct?

The Mek isn't a crane for a tree guy, it's a crane, climber, and groundy.
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Yes my tax calculations are a slight exaggeration, but I can guarantee that come April 15 I will NOT be caught with my pants down. I've been down that road before and it's not fun. It's best to put it away as you go and if you over allocate great, add the extra to the equipment fund or use it to pay first quarter estimates when money is tight anyhow! I always over estimate taxes because it can be costly if you don't pay enough at the correct times.
 
So it's on like Donkey Kong. Found funding at 8% or less depending on the market with a 60 or 72mos term for the treemek. Yahoo. Waiting on final approval and the offer. Very happy! 72mos is just over 4k a mos. This is what I'm looking at for a cab and chassis.
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If you can steve...take it for a spin and envision it 20k heavier...flat land here and my 9513 with 8ll and 350 horse at c9 is a slug at 48k empty...really needs a 13 speed.
 
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