Rig or chunk

If they can repeat their own job titles without reading this post, then it's a consideration. Most consciencious tree workers anywhere are probably due for a raise.:)
 
Mangoes said:
Buy your boss out (since I am acquanted with you both......and you've more career ahead of you then he)

Bosses don't do everything right, but alot of knowledge is available from their history of mistakes. Buy in for 10-20% now and work to acquire at least 50% by the time he's ready to retire then buy it all.

20% of a company with $1,000,000 in sales is loads better than 100% of a company with $75k in sales (first year assumption). This strategy would save you lots of building agony and provide mentorship.
Click to expand...
Not sure if KevinS is interested in your proposition; but, he has already hijacked his own thread. Let's say the owner is willing to sell 20% of this $1,000,000 sales/yr business; what would it cost to buy an investment that generates $200,000/year?

Naturally he would be liable for 20% of the expenses, taxes, equip, etc. Wouldn't earnings be a better measuring stick for determining which option is best? I'd rather have a $75k/yr business that netted $40k than a $200,000/yr business that netted $50k, and all the headaches and bank loans that go with it.

Maybe the thought is that he would net $100,000--still, where does he come up with the initial $1,000,000 needed to buy the 20%? Take a banker with nerves of steel to risk that on a 27 year old tree climber (no offense Kevin, they wouldn't risk it on me either).

Of course it would be helpful to have the name of the established business and the mentorship. But, there is no substitute for the pride of ownership that comes with building and running your own show. That guy with the $1,000,000 business did it. And now for the most quoted line that isn't in the Bible, "God hates a coward". jmho
 
I often clean out the brush by hand and then rig the wood. It seems that if I rig out a lot of brush it always gets tangled in something like the wires or the gutter. At least I will clean out the brush until things get more predictable. You can rig out out huge logs because they are very predictable, when there is a lot of brush it can be harder to know whats going to happen. We have a small chipper so that probably has something to do with it as well.
 
BRT said:
Not sure if KevinS is interested in your proposition; but, he has already hijacked his own thread. Let's say the owner is willing to sell 20% of this $1,000,000 sales/yr business; what would it cost to buy an investment that generates $200,000/year?

Naturally he would be liable for 20% of the expenses, taxes, equip, etc. Wouldn't earnings be a better measuring stick for determining which option is best? I'd rather have a $75k/yr business that netted $40k than a $200,000/yr business that netted $50k, and all the headaches and bank loans that go with it.

Maybe the thought is that he would net $100,000--still, where does he come up with the initial $1,000,000 needed to buy the 20%? Take a banker with nerves of steel to risk that on a 27 year old tree climber (no offense Kevin, they wouldn't risk it on me either).

Of course it would be helpful to have the name of the established business and the mentorship. But, there is no substitute for the pride of ownership that comes with building and running your own show. That guy with the $1,000,000 business did it. And now for the most quoted line that isn't in the Bible, "God hates a coward". jmho
Click to expand...

Not sure if KevinS is interested in your proposition; but, he has already hijacked his own thread. Let's say the owner is willing to sell 20% of this $1,000,000 sales/yr business; what would it cost to buy an investment that generates $200,000/year?
- I specifically didn’t value the hypothetical company with $1,000,000 in sales. Kevin and the owner would have to have third party valuation of the business. If the business doesn’t have real estate assets then the valuation would definitely NOT approach $1,000,000 for sales alone. All the depreciating assets and client list would have to be considered, then valuation of the intangibles would have to occur (name, reputation etc).

Naturally he would be liable for 20% of the expenses, taxes, equip, etc.
- See your point about God hating a coward

Wouldn't earnings be a better measuring stick for determining which option is best? I'd rather have a $75k/yr business that netted $40k than a $200,000/yr business that netted $50k, and all the headaches and bank loans that go with it.
- A $75k/yr business that nets $40k is an impossibility. To net $40k this business would have to account for his $50k-$70k salary, plus the $40k net (= $90k) plus all Variable costs and Direct expenses (rough budget $250k)

Maybe the thought is that he would net $100,000--still, where does he come up with the initial $1,000,000 needed to buy the 20%? Take a banker with nerves of steel to risk that on a 27 year old tree climber (no offense Kevin, they wouldn't risk it on me either).
- IF the business were valued at $1mil, and he came up with the above noted $1,000,000 – wouldn’t he own 100%?

Of course it would be helpful to have the name of the established business and the mentorship. But, there is no substitute for the pride of ownership that comes with building and running your own show. That guy with the $1,000,000 business did it. And now for the most quoted line that isn't in the Bible, "God hates a coward".
- Pride don’t pay the mortgage and ego can cause financial ruin. Initially the enterprise I lead was heavily influenced by both and it didn’t work.

Business decisions need to be pragmatic and logical. If value, cost and ROI are solid - then buying into an existing enterprise is a very pragmatic means to fiscal and professional success. If Kevin were to share the leadership responsibility, to take to heart his portion of ownership, to allocate his portion of profit to additional ownership, the drive he had to "head out on his own" would bear exponentially more fruit in a shorter time span.

I once worked for a highly profitable enterprise; and the ego drove me to switch to a climbing company cause I wanted to be an all star climber - I did develop a modicum of talent; which I never get to use any more, and any skill I once had as a climber is irrelevant. Looking back I wish I had taken the road I have suggested Kevin entertain. As with any business owner; leadership skills and business skills are all that matter.

Should Kevin invest himself into this goal to grow and evolve his leadership and business talent, while picking up an enterprise at (hypothetical) $1,000,000 in sales, after harnessing all this drive currently expressed, in 10 years the enterprise could be $3,000,000 annually. If he struck out on his own today, it will be hard work to get his start up enterprise to $1,000,000 within 10 years.

So what’s the point with all the lofty number? Why not be content with $400k annually? …. Risk & Reward is one answer. Salability is another – why start and run ABC Tree Care at $400k annually for 25 years only to retire and realize the enterprise isn’t saleable. The Big D would invest $80k in marketing and steal your clients within 3 years.

And finally what about Legacy – what Legacy and positive influence will you bring to your keen staff (like Kevin’s employer – is Kevin to work for him for the next 10-15 years stuck as a crew leader, with no opportunity to grow and develop?) Once staff realize their career for $400k/yr ABC Tree Care is a cul-de-sac, they will move on.

It would take a great deal of courage for both Kevin and his employer to take the risks with a co-ownership strategy and planned exit strategy.
 
I've been reading and listening from different points of view not just here. But money aside looking at the skill set side of things what benefits are there running your own company? Not to demean it at all but trees are trees and if tree x has problem q should the solution not be fairly similar no matter who's holding the reigns?

So money aside would the work, skills, attributes, etc change at all? What part of this industry can I not tap into being an employee?

These points and thoughts have been burning up my pencils and note pads. Trying to look without missing something.
 
Mangoes said:
Not sure if KevinS is interested in your proposition; but, he has already hijacked his own thread. Let's say the owner is willing to sell 20% of this $1,000,000 sales/yr business; what would it cost to buy an investment that generates $200,000/year?
- I specifically didn’t value the hypothetical company with $1,000,000 in sales. Kevin and the owner would have to have third party valuation of the business. If the business doesn’t have real estate assets then the valuation would definitely NOT approach $1,000,000 for sales alone. All the depreciating assets and client list would have to be considered, then valuation of the intangibles would have to occur (name, reputation etc).

Naturally he would be liable for 20% of the expenses, taxes, equip, etc.
- See your point about God hating a coward

Wouldn't earnings be a better measuring stick for determining which option is best? I'd rather have a $75k/yr business that netted $40k than a $200,000/yr business that netted $50k, and all the headaches and bank loans that go with it.
- A $75k/yr business that nets $40k is an impossibility. To net $40k this business would have to account for his $50k-$70k salary, plus the $40k net (= $90k) plus all Variable costs and Direct expenses (rough budget $250k)

Maybe the thought is that he would net $100,000--still, where does he come up with the initial $1,000,000 needed to buy the 20%? Take a banker with nerves of steel to risk that on a 27 year old tree climber (no offense Kevin, they wouldn't risk it on me either).
- IF the business were valued at $1mil, and he came up with the above noted $1,000,000 – wouldn’t he own 100%?

Of course it would be helpful to have the name of the established business and the mentorship. But, there is no substitute for the pride of ownership that comes with building and running your own show. That guy with the $1,000,000 business did it. And now for the most quoted line that isn't in the Bible, "God hates a coward".
- Pride don’t pay the mortgage and ego can cause financial ruin. Initially the enterprise I lead was heavily influenced by both and it didn’t work.

Business decisions need to be pragmatic and logical. If value, cost and ROI are solid - then buying into an existing enterprise is a very pragmatic means to fiscal and professional success. If Kevin were to share the leadership responsibility, to take to heart his portion of ownership, to allocate his portion of profit to additional ownership, the drive he had to "head out on his own" would bear exponentially more fruit in a shorter time span.

I once worked for a highly profitable enterprise; and the ego drove me to switch to a climbing company cause I wanted to be an all star climber - I did develop a modicum of talent; which I never get to use any more, and any skill I once had as a climber is irrelevant. Looking back I wish I had taken the road I have suggested Kevin entertain. As with any business owner; leadership skills and business skills are all that matter.

Should Kevin invest himself into this goal to grow and evolve his leadership and business talent, while picking up an enterprise at (hypothetical) $1,000,000 in sales, after harnessing all this drive currently expressed, in 10 years the enterprise could be $3,000,000 annually. If he struck out on his own today, it will be hard work to get his start up enterprise to $1,000,000 within 10 years.

So what’s the point with all the lofty number? Why not be content with $400k annually? …. Risk & Reward is one answer. Salability is another – why start and run ABC Tree Care at $400k annually for 25 years only to retire and realize the enterprise isn’t saleable. The Big D would invest $80k in marketing and steal your clients within 3 years.

And finally what about Legacy – what Legacy and positive influence will you bring to your keen staff (like Kevin’s employer – is Kevin to work for him for the next 10-15 years stuck as a crew leader, with no opportunity to grow and develop?) Once staff realize their career for $400k/yr ABC Tree Care is a cul-de-sac, they will move on.

It would take a great deal of courage for both Kevin and his employer to take the risks with a co-ownership strategy and planned exit strategy.
Click to expand...
I'm sure you have Kevin's best interest in mind. I believe you and I simply look at things differently. If he could make the plan work, it does seem to have many positive aspects.

Here's the bottom line: is the owner willing to sell a portion of his business? what would a 10-20% stake in this business cost Kevin? & would a bank be willing to take that risk? Until those three aspects are determined, this is all speculation.
 
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