Small Company Business Models

[lumberjackson]

I have had my own business for about a year now and am at the point where I need to make a few big decisions. I spent the last week reading through all the threads I could find on here where people talked about business models they've seen and used, and the biggest thing I've taken away from it is to talk to people who have similar goals, see what they did, what they liked, what was tough, and compare that with your values and see what works for you. There is already some great advice from a lot of you on the forum, but I have been so stressed lately, I'm hoping or some more input and experience.

I currently work with my wife who is an exceptional groundsman and a decent climber. We've got an F250 with a chip box and a bandit 150XP. The niche market we want to get into is tree preservation. We do quite a bit of root collar excavations, targeted pruning, cabling and bracing, soil tests, diagnostics, and planting. We also do removals that come our way, but don't go out of our way to sell them. We have a good relationship with a couple crane companies that are comfortable on tree jobs, and hire contractors we work well with on bigger jobs. I'm getting my pesticide applicator license this winter.

Our problem is we want to increase efficiency (in terms of dollars per hour/day/week whatever) without wearing out our bodies. The decision I am having a hard time with is equipment vs employees. The subcontractor friends that typically help us aren't good long term solutions because they will be moving, getting "real" jobs in different industries, etc. What are some of your experiences in investing in equipment vs employees? I know they both have their places, but what worked or didn't work for you when you were a 1 crew operation?

 

[ATH]

I'd say we are similar: tree care with limited or no removals. We do a fair bit of pesticide application. Don't necessarily "push" that end of the business, but sometimes that is the best thing we can offer a client so we do.

I've been very fortunate hiring some employees:
*A couple of college students helped part time as just ground help - didn't ask any more of them.
*When I left my job with the state to go full time, the guy who hired me when I had started there retired a week before I left and wanted to keep busy part time and offered to help one day per week.
*I then hired a retired UPS driver. Both he and the guy I worked with at the state had another gear that no other employees I've worked with had...they really got after it.
*I also hired a part time worker who does disaster relief stuff with Team Rubicon, so safety was never a concern with her...she kept me in check!
--for all of those last 3, they worked 1 day per week - that is all they wanted. Not that they were too lazy for more, but they weren't looking for full time jobs. That day shifted every week depending on their schedule, and I'd work the jobs where they could help around that. All were able to help do more chainsaw-related work safely.
*Going into 2020, I knew I needed more full time help. I had no idea where that would come from. Was talking with a friend who is an urban forester and she knew somebody who was graduating with an associates degree in forestry and was more interested in urban forestry than traditional forestry. He has worked out great. Very interested in learning and has a strong base to work from. Had an ACRT climbing course, so a strong foundation in safety. Cares about doing a good job. I won't ask him (or anybody) to go pruning on his own...but about anything else I'm comfortable leaving a job site to take care of other things or even sending him out to do sprays while I'm away (he has his license...). Efficiency has taken a huge jump.

Not sure what my point is! Maybe look in the right places. Offer flexibility.

I still think we need a mini with a BMG...but I'm spending money to build a shop to keep everything in. Once I recover from that, I'll look at that. I saw Bobcat has 36 months 0% interest, so maybe later this year.

 

[evo]

Sounds like I’m a few steps ahead of you, but similar roots. F250 and a little 9” for the first years. My wife hasn’t had any part of the business so it’s all been on my shoulders, you are very lucky that she wants to be involved.
My goal has and is to grow small and steady. I don’t do any pesticides, nor larger climbing removals, but I can drop a 150’-180’ crooked Douglas fir on a dime.
Equipment is only as good as the time you have to maintain it.
Actually my start was a 1980 Toyota and a 4x10’ trailer. Then progressed to the f-250 and a 9” chipper with a 10k loan, the remainder of the funds (and sale of the Toyota and trailer) paid for licensing, insurance etc.
I ran with that and help from friends/employees that I hired when I needed help.
Next was a dump insert that was the single most useful thing at that stage. The truck was always full, at the end of long days working mostly solo and it had to be empty by the next morning.
Employees came and went, some horrible some just meh, none with any drive or passion for tree work. But all warm bodies..
Next came a good bookkeeper and CPA, best money I ever spent.
Then I bought a 1995 frr dump, which was a big game changer. Not that I HAD to have the extra volume. But I went from dumping every work day(or multiple times per day) to dumping 1-3 times per week. That saves me 3-7 hours per week!
Then came the mini. I cannot imagine work without it, when I need it, but it only comes out to play about 0-3 times a week.
Next came a real employee with experience and he’s certified and a somewhat decent climber. There is a little drama, but what he brings to the game has been the most Valuable.

Point is employee vs equipment, well it depends. Find a great employee and they will be more valuable than any piece of equipment. However never become dependent on a employee, and if that takes equipment to make your job easier DO IT.

 

[evo]

Don’t be afraid to take on simple debit. Small loans, with low monthly payments. Just keep it simple, and for myself I’ve promised (myself) one loan at a time.

 

[Merle Nelson]

@southsoundtree has had some good thoughts on equipment versus labor in the past.

 

[Reach]

The answer to your question depends largely on what you want to do with your company. Do you want to stay a one crew outfit with you at the helm? Or do you want a large company that runs by itself and just writes you a weekly check? That will make a difference in your path forward.

My first recommendation is to invest in a monthly one on one consultation with a good business coach. That’s one of the best things I have ever done.

After that, I am personally on the side of buying equipment, especially these days - help is very difficult to find, good help is nearly impossible. It’s just not out there, nobody seems to want to work anymore, but the machines haven’t learned that yet. They still show up on time every day.

 

[southsoundtree]

And they wait patiently, with no drama, ready to go any time, day or night, with no Workers comp, court dates, forgotten boots, way easier to fix than people.

Employees and machines allow higher production, and less error from exhaustion.

The Available Labor here for arb work doesn't fit my style, which is boring and predictable.

 

[owScott]

Pruning and preservation work is skill based. Doesnt require alot of equipment. Good chip truck that dumps that looks professional. Decent 12" chipper. I stay away from pesticide, network yourself with PHC people that will give you referals. Tree risk assessment, tree appraisal and consulting are where I am heading. Big removals are usually a race to the bottom, cheapest price gets the job and is equipment intensive. Big removals will always be hard on the climber with the exception of crazy expensive equipment like grapplesaws. That said, 2 things I keep in mind. Doing more work doesnt always mean making more money. Profit to effort ratio. My best profit to effort is medium sized pruning, small removal and replant also consulting. You sound like you are on the right track. Finally, half the work at good money is better than all the work at crap money.

 

[evo]

Pruning and preservation work is skill based. Doesnt require alot of equipment. Good chip truck that dumps that looks professional. Decent 12" chipper. I stay away from pesticide, network yourself with PHC people that will give you referals. Tree risk assessment, tree appraisal and consulting are where I am heading. Big removals are usually a race to the bottom, cheapest price gets the job and is equipment intensive. Big removals will always be hard on the climber with the exception of crazy expensive equipment like grapplesaws. That said, 2 things I keep in mind. Doing more work doesnt always mean making more money. Profit to effort ratio. My best profit to effort is medium sized pruning, small removal and replant also consulting. You sound like you are on the right track. Finally, half the work at good money is better than all the work at crap money.

Exactly! Work smarter not harder

 

[lumberjackson]

Awesome, thanks for the replies, each of them have great advice. @Reach, you advocate a business coach in every thread on this topic I've read. Are you accepting new clients to coach? What are your rates? (I'm only mostly joking. But I think you would be great to have as a resource based on your posts here).

As far as what I want out of my company, I am not really sure. I absolutely know you need to take the good with the bad, and the only reason I would want a big company that runs by itself is so I could start another small company like I'm doing now, only with less pressure to pay the bills and blah blah blah. But I also don't want to be broken down and have all my joints ache in 20 years from a physically demanding job. Right now I'm in it because I love my job and I love being in the trees and educating customers. It also pays better than any other job I could tolerate. But I recognize that where I'm at isn't physically sustainable.

Right now I'm thinking a mini with grapple won't increase efficiency on ~60% of our jobs, but will reduce fatigue for my wife and I on about 85% of our jobs, which is important to us. Right now I would love to get an articulated mini wheel loader, but I am hesitant because they can't drive by themselves, they can't prune, they can't get in to every yard and won't get used on every job. But it sounds like a lot of employees are about that same speed from some of your comments... haha.

One thing I am considering is eventually having a 3-person crew that can handle mostly everything themselves. I do the consulting, estimates, etc. but help occasionally on jobs or split into 2 2-person crews if we need to. This way the boss can actively train employees in the field, gets to do some real work outside of the office, but isn't doing hard labor 40 hours a week. Or would adding an occasional worker limit team cohesion and efficiency? Other pros/cons?

Has that worked for anyone? I'd imagine it would take excellent communication between boss and workers so they see the boss as a team player and not a diva that only helps on the fun jobs when the weather is nice. And self control from the boss to not do that.

Thanks again for the insights. Always impressed with the responses here.

 

[Reach]

Awesome, thanks for the replies, each of them have great advice. @Reach, you advocate a business coach in every thread on this topic I've read. Are you accepting new clients to coach? What are your rates? (I'm only mostly joking. But I think you would be great to have as a resource based on your posts here).

As far as what I want out of my company, I am not really sure. I absolutely know you need to take the good with the bad, and the only reason I would want a big company that runs by itself is so I could start another small company like I'm doing now, only with less pressure to pay the bills and blah blah blah. But I also don't want to be broken down and have all my joints ache in 20 years from a physically demanding job. Right now I'm in it because I love my job and I love being in the trees and educating customers. It also pays better than any other job I could tolerate. But I recognize that where I'm at isn't physically sustainable.

Right now I'm thinking a mini with grapple won't increase efficiency on ~60% of our jobs, but will reduce fatigue for my wife and I on about 85% of our jobs, which is important to us. Right now I would love to get an articulated mini wheel loader, but I am hesitant because they can't drive by themselves, they can't prune, they can't get in to every yard and won't get used on every job. But it sounds like a lot of employees are about that same speed from some of your comments... haha.

One thing I am considering is eventually having a 3-person crew that can handle mostly everything themselves. I do the consulting, estimates, etc. but help occasionally on jobs or split into 2 2-person crews if we need to. This way the boss can actively train employees in the field, gets to do some real work outside of the office, but isn't doing hard labor 40 hours a week. Or would adding an occasional worker limit team cohesion and efficiency? Other pros/cons?

Has that worked for anyone? I'd imagine it would take excellent communication between boss and workers so they see the boss as a team player and not a diva that only helps on the fun jobs when the weather is nice. And self control from the boss to not do that.

Thanks again for the insights. Always impressed with the responses here.

I suppose I may sound like a broken record when I advocate for business coaching, but the way I see it, it’s like any other team you want to take to the top - you hire a coach to take your baseball team to the finals, why not hire one to take your business there too?

I am a tree care professional, but I am not an accountant, so I hire one to take care of my taxes. Likewise with business - I’ve been in business for 18 years now, and the longer I go, the more I learn I don’t know. So I pay for a professional to train me in running a business like I would a professional trainer if I were to go to a gym to get in shape.

I am not a business coach myself, so I am not taking on clients, I’m just one who has benefited from the services of a good coach.

My goal with many of my questions is to provoke you to do some deep thinking, to figure out what your dreams are, and thereby to set your own goals to achieve those dreams. I am also quite opinionated, and sometimes let that side of me show through on here. I want to see those who have dreams achieve them, and pass on their knowledge to others the way some have done for me.

 

[Jehinten]

@lumberjackson I hope this doesn't derail your thread but...

My first recommendation is to invest in a monthly one on one consultation with a good business coach. That’s one of the best things I have ever done.

@Reach what exactly does a business coach do for you? I've considered it after reading you and others recommending one. I struggled to find a place local with a Google search, only for a place where you can call into coaches for free. I figured if you get what you pay for, then that won't be worth much.

I'm at a place with my business where I pay the bills, I'm happily without employees and I don't have to work every day of the week. But I also feel like its more of a job than a business, where once I'm done, other than selling equipment there won't really be anything left. I suppose I want my cake and eat it too. Anyways I hear that business coaches are amazing but I haven't heard what exactly they do, if you don't mind to share.

 

[southsoundtree]

Machines patiently wait, and perform reliably just like friction, gravity, and the ground, my the favorite helpers.

My GF is under 2/3s my size, my mini listens to her as well as it listens to me. It does exactly what its told. My 8 y.o. can move the hydraulic valves equally as much as I can.

It doesn't need to be used that much to pay for itself, and it saves your body.

Quick and easy lift and lower.

Pulls trees over, pushes trees over.

My mini will feed my chipper, deck logs, tear out small stumps, move my 4400 chipper ot trailers or 27' gooseneck travel trailer well. I squeezed my 23' travel trailer into my pole barn with about 2" or less clearance.

My market is very mini friendly. Not all are.

No workers comp.

You own it in a handful of years.




I make grapple piles as close as possible to where material lands, often flicking maple or fir branches into piles, without stepping.
Grapple pile building, done right, with the right species, means almost no hand-fed chipping.

 

[southsoundtree]

Oh yeah, and learn to lower your own pieces, and work the swing to land them often times... IF you can do it safely and predictably.

 

[Reach]

@lumberjackson I hope this doesn't derail your thread but...


@Reach what exactly does a business coach do for you? I've considered it after reading you and others recommending one. I struggled to find a place local with a Google search, only for a place where you can call into coaches for free. I figured if you get what you pay for, then that won't be worth much.

I'm at a place with my business where I pay the bills, I'm happily without employees and I don't have to work every day of the week. But I also feel like its more of a job than a business, where once I'm done, other than selling equipment there won't really be anything left. I suppose I want my cake and eat it too. Anyways I hear that business coaches are amazing but I haven't heard what exactly they do, if you don't mind to share.

I will make an attempt at an explanation, but I can’t guarantee it will be great. It’s hard to explain exactly what a business coach does, because it’s so varied and also rather personal. The basic idea of a coach is to have someone, outside of your business, who has the knowledge and the authority to look at your business, and you, and help you to grow in business.

My coach started out with a couple hours of getting to know me on a personal level, and getting to know my business skills. He had me take a couple assessments, and from that has put together a program through which he helps me to improve my business in the areas it is weak. The program is not rigid though, each meeting starts out with a couple questions about how the previous month went - what went right and what did not, and he always asks if there are any issues that I wish to discuss. Last month it was an employee problem, we brainstormed some ways to patch it temporarily, and put together the beginnings of a plan for a long term fix.

He also guides me in determining my goals and dreams, and putting in place a plan to meet each of those goals, and keeps me accountable to be sure I am doing my part to ensure they happen.

One way to look at it is to compare his job to that of a coach in any major league sport. A business coach is there to identify your strengths and weaknesses, and to help you improve your strengths while learning to deal with your weaknesses the best way possible.

Hopefully that description helps, and it doesn’t just sound like I’m rambling while I’m half asleep. If you have more specific questions I’m happy to try to answer those for you.

And yes, I think likely you will get what you pay for if you call in to a free helpline.

 

[Jehinten]

I will make an attempt at an explanation, but I can’t guarantee it will be great. It’s hard to explain exactly what a business coach does, because it’s so varied and also rather personal. The basic idea of a coach is to have someone, outside of your business, who has the knowledge and the authority to look at your business, and you, and help you to grow in business.

My coach started out with a couple hours of getting to know me on a personal level, and getting to know my business skills. He had me take a couple assessments, and from that has put together a program through which he helps me to improve my business in the areas it is weak. The program is not rigid though, each meeting starts out with a couple questions about how the previous month went - what went right and what did not, and he always asks if there are any issues that I wish to discuss. Last month it was an employee problem, we brainstormed some ways to patch it temporarily, and put together the beginnings of a plan for a long term fix.

He also guides me in determining my goals and dreams, and putting in place a plan to meet each of those goals, and keeps me accountable to be sure I am doing my part to ensure they happen.

One way to look at it is to compare his job to that of a coach in any major league sport. A business coach is there to identify your strengths and weaknesses, and to help you improve your strengths while learning to deal with your weaknesses the best way possible.

Hopefully that description helps, and it doesn’t just sound like I’m rambling while I’m half asleep. If you have more specific questions I’m happy to try to answer those for you.

And yes, I think likely you will get what you pay for if you call in to a free helpline.

Thats very helpful. Thank you.


At the risk of sounding like I can't do my own homework, where do you find a business coach? As I mentioned I came up blank with Google (nearly blank), I don't live in a huge city but in a population of almost 118,000 you would think someone here specializes in this.

 

[Reach]

Thats very helpful. Thank you.


At the risk of sounding like I can't do my own homework, where do you find a business coach? As I mentioned I came up blank with Google (nearly blank), I don't live in a huge city but in a population of almost 118,000 you would think someone here specializes in this.

I would think there has to be one there somewhere! I found mine through a friend who had been using this one for for some time, but that won’t help you. If Google is no help, you might try reaching out to your local SCORE chapter.

This article may also give you some suggestions, a quick read over shows it to be promising. https://fitsmallbusiness.com/find-and-hire-business-coach/

 

[macrocarpa]

Sounds to me like you can do a lot with what you already have if your focus is preservation but I guess that depends on how big you want to get. I want to buy a compressor for the air knife next.

In my area there is so much need for soil remediation, correcting improper planting (when possible), being one of the few that plant properly and push planting, PHC as needed and pruning. Leaving the planting to the landscapers seems to be a mistake (but the call backs do suck)

Giving presentations for master gardener clubs has lead me to one quality client to the next. 2020 was a really good season but I wonder how much of that was because people were home and actually noticed their trees?