Starting A Business

[CanaryBoss]

Oh and there is another thing I forgot to mention; I only work for my company about 25hrs a week and I’m able to disappear for a week at a time whenever I want. RVing with my family. That’s the goal right? Why work so hard if you can’t retire at a reasonable age and have some comfort while you get there.

 

[evo]

5mil gross spread across 25 employees is 200k per employee. Take the overhead of the 10k in dump fees, insurance, equipment, payroll, etc and some of us little guys are doing much more with less overhead.

 

[CanaryBoss]

I started little. I didn’t stay that way cause there was more money in being bigger. I have been both, no offense, but bigger is better.

 

[dmbeathard]

I don't do this full-time but over the last couple years I've been doing small removals, landscaping and general handyman stuff. It all started just by helping out a few elderly people. Next thing I know, people are stopping left and right wanting me to do work for them! I get the same story from all of them. They call the local businesses and nobody ever calls them back! My advice, keep debt very low, take even the crappy jobs, be fair on pricing and ALWAYS return phone calls. You'll be amazed how much work you'll get just by showing up and doing what you promise. I've actually been considering going into it full-time myself.

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I have heard a lot of people start out that way. The military and school is very demanding but I'm going to try to start doing small jobs in my spare time, just to gain more real world experience. Thanks for the debt advice I'm currently following the Dave Ramsey plan for getting my debt paid off. However, my Dad always says it takes money to make money I know that's true but I want to start small and build with a portion of my profits.

 

[dmbeathard]

Seriously man, when you get out, if you really want to get into this business I would either hire on as an apprentice to a utility crew or go work with a reputable climber. In either case, because you are a Marine you are physically fit- unless you have been injured? Hope not... One thing to consider is scale. If you were expecting to have a crew, bucket truck, mini, chip truck, chipper maybe a stump grinder or spider crane, and planned to finance that you could easily be 750,000 in the hole in a handshake. That’s a pretty big pill to swallow. And I suggest the ROI would be super poor! In addition if you had a crew, at least one would need to be a certified utility arborist to work near energized conductors. You can’t even look at a job near a powerline without this here in Canada. So that guy needs to be on retainer or staff - meaning full time! You need one for each crew.
Now if you did the contract climber gig... the contractor supplies all the trucks, excavators, cranes, etc and you show up with climbing gear. And of course some chops!

I defiantly don't want to make a huge investment right away. Way too many unknown variables, at least for me, to put $750,000 into something. Right now I'm not sure what the powerline regulations are here in the US but if I need a certification to do my job I will be absolutely willing to invest whatever time I need to be qualified. When I do decide to execute my plan it will be a gradual process while doing my best to minimize risk. I have thought about working for my Dad for couple of years and trying to gain more experience I just don't want to get stuck in a rut that I can't get out of.

 

[dmbeathard]

1. Was it hard finding a reasonably priced dump site?
Not easy but if you look around you will find them. Networking has been huge for us

2. How do you determine if a potential employee has what it takes to work in the trees during the interview process?
If there are no red flags in the interview, try them out. Be honest with them about the work and say it’s not for everyone. Most don’t make it and that’s ok.

3. Is there a minimal amount of equipment needed to be successful; if so what are they?
15” chipper, 16 yard truck, mini skid with grapple, pick up and dump trailer... for me. Starting out I had a pick up and easy dumper and made money to buy a chipper.

4. What were your first steps?
Get insurance!

5. How did you arrange financing?
My first chipper was an unsecured personal loan (my credit is good), now it’s much harder to get money. Barrow the absolute minimum for what you are doing.

6. If you had it to do all over again what would you do differently?
NOTHING! Every bad decision I have made has been a learning experience that earns me the right to say that I’ve been there done that got the tee shirt... and I’m not doing it again!

7. How large a part does creativity play in day to day operations?
Not so much. Physics has much more to do with it than creativity.

8. What was your best marketing technique?
Do good work! Get more work! Do more good work!

9. What portion of gross sales do you spend on advertising?
.05% maybe. Only the occasional FB add. Happy customers are better advertising than any other out there.

10. Did you hire more employees than you originally expected?
No. Not yet!

11. What makes your business unique?
Care & dedication. Not something you learn in some business class.

12. How do you use social media?
Some. I let my clients use social media. Sometimes I have to lead them to it but it works. Most days we are recommended 4 to 1 or better on requests for tree care pros in our area.

13. Did you write a Business Plan? If not, do you wish you did?
In college 19 years ago yes. Now, NO. Do I wish... no. Business is so fluid especially in the growth stage you need to be able to react to a need, not be bound to something you wrote “theoretically” as the direction you are going to go.

14. Are gross profits what you expected them to be?
In our 10 years part time we blew away any projections we ever had. Our first year FT we met our goal in August. 2nd the same and 6 mo into our third FT year we are already 25% up from last year.... but so is expenses.

15. Would you do it again?
HELL YES!!!!

16. What is the key to growing multiple crews?
Help that thinks like you and breaths like you. They have to be you or better than you. Because you can’t run both crews at the same time.

17. Do you use any of the education websites like ISA or TCIA for personal and/or employee training?
Books & mags yes. Website no.

18. What are some good resources for gaining information on the tree care industry?
Time on the job

19. How do you deal with mishaps on the job?
Calm cool and collected. Sometimes it’s best to walk away, breathe and come back clear headed and calm.

20. Is it worth hiring people to take care of my pay roll, taxes, and contracts like lawyers and accountants?
What is your roll going to be? Working with the crew and estimating work? Yes to all the above! If you are working you don’t have time. If you are sitting at the desk and hiring guys to do all the work then you might have the time. I DONT!

21. What is your target market?
People with trees and money. We are in a unique market which puts people with money to burn in yards with trees to care for.
22. What is the key to bidding jobs?
Doing it! Making the mistakes and learning from them. If someone says they have the answer to never loose on a job, RUN REALLY FAST cause they are full of $hit. Break the jobs down to their simplest operations, how long = how much. And don’t get butt hurt if you loose a job, it’s gonna happen. I might have a different view, idea to complete the work or maybe I just screwed up. I lost one last week. I low balled it because I wanted to work for the development (I was still gonna make a little money). Someone under cut me. I would have loved to watch them work the job and learn how they did it, maybe I missed something stupid easy!

Thanks for the positive outlook on your process. It is hard to find people that appreciate the process. I also think that mistakes are important to learning. Also, from what I've gathered from the others on this forum starting small and learning from doing is the best way to succeed.

 

[dmbeathard]

I thought you looked familiar...

NICE!

 

[dmbeathard]

I would need to know some info about where you were going to start-not specially, but rather what part of the country. Also; rural, suburban, large cty... also, what is your competition doing? How big are they? What can your location support. If your going to do it, own the market.

This stuff about paying to dump twice a year doesn’t work for everybody. I’m in a city in Florida and pay $10,000+ a month to dump. It could be a lot more but I utilize certain practices that include proper equipment and free disposal of chips. I used to pay twice that a month. We also have to deal with palm debri that makes mulch unusable.

My company hired its first employee 2.5 years ago and we do millions a year in tree work. I have 25 employees and 2 million in equipment. The current valuation of my company is around $5,000,000. I have some debt but it pails in comparison to our annual revenue. And we are growing fast!!!!

I am a for hire consultant to the tree industry. I am willing to work with some start ups and existing tree services. Of course, the rapid expansion is not free and you will give a part of yourself to it. If your interested, pm me.

Northwest Arkansas, Northeast Oklahoma are two areas I'm interested in and currently doing some market research there. I live in Florida now and I'm thinking about starting small here just to get into it. North West Arkansas will be more suburban in the area I'm looking at but it is surrounded by large cities. Northeast Oklahoma is more rural. I will PM you.

 

[dmbeathard]

Oh and there is another thing I forgot to mention; I only work for my company about 25hrs a week and I’m able to disappear for a week at a time whenever I want. RVing with my family. That’s the goal right? Why work so hard if you can’t retire at a reasonable age and have some comfort while you get there.

That is most defiantly my goal in the future just trying to get there. I have a big family and they are my priority.

 

[CanaryBoss]

That’s awesome! I LOVE my job, but I hate it compared to my family. They are ALL that matters to me ultimately.

 

[dmbeathard]

5mil gross spread across 25 employees is 200k per employee. Take the overhead of the 10k in dump fees, insurance, equipment, payroll, etc and some of us little guys are doing much more with less overhead.

Thanks for the perspective it is something to think about. He has a pretty nice RV though.

 

[Stephen Moore]

5mil gross spread across 25 employees is 200k per employee. Take the overhead of the 10k in dump fees, insurance, equipment, payroll, etc and some of us little guys are doing much more with less overhead.

Yeah, something to also consider is maintenance and wear on equipment. Things do wear out on lifts and those things are expensive! The down time is also expensive! And it may seem like a guy is making a pot of money but if I were you I’d be putting a lot of that away to pay for those unforeseen expenses.

 

[CanaryBoss]

It’s all about being financially responsible. We have a profit account and every multi million dollar company should have an untouched line of credit that meets or exceeds the cost of six months operating expenses. That is how you weather storms. Use the money you make to make more money. Sticking your money in a savings account that earns half a percent is not nearly as wise as putting it into a peice of equipment that can up your revenue or lower the wear on your employees. No matter what anybody else says, your employees are your most expensive investment. AND, they can walk away at any time and leave you with no equity. When you pay into a piece of equipment, it has a tangible value that you can trade or sell or evaluate at the sale of your company. My guys have comp, health insurance, paid vacations and holidays and only work 4 days a week. Yet and still, I would much rather pay for $600 a month for a skid than $2400 a month for a groundsman. And, a skid replaces two groudsmen.
Customers used to ask me; why don’t you have a chipper or a lift or stump grinder on this thing or that? I would reply that we were doing fine without it, but the truth was that we didn’t have them because we hadn’t figured out how to get them yet. Now that I have them, I would never go back. We are doing a lot better than fine nowadays.

 

[guymayor]

Thanks, that makes sense do you have examples?

http://www.historictreecare.com/wp-content/uploads/2012/04/A300-AN-1312.pdf

The tree in this article was condemned via TRAQ. I sold a report with a 5th opinion, and then sold 7 hours pruning, and now have a tree and a tree manager client for life.

Another https://www.swvatoday.com/news/smyth_county/article_33042b58-a5fd-11e6-9865-f330f587c896.html

 

[JD3000]

Find a great mentor...and pick their brain a bunch...

 

[Brian72]

I have heard a lot of people start out that way. The military and school is very demanding but I'm going to try to start doing small jobs in my spare time, just to gain more real world experience. Thanks for the debt advice I'm currently following the Dave Ramsey plan for getting my debt paid off. However, my Dad always says it takes money to make money I know that's true but I want to start small and build with a portion of my profits.

Love Ramsey!! You can still make pretty good money on smaller jobs, and with much less overhead and equipment, which means more profit in your pocket! You could also rent needed equipment for specific jobs temporarily. Wish you the best of luck!

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[Stephen Moore]

It’s all about being financially responsible. We have a profit account and every multi million dollar company should have an untouched line of credit that meets or exceeds the cost of six months operating expenses. That is how you weather storms. Use the money you make to make more money. Sticking your money in a savings account that earns half a percent is not nearly as wise as putting it into a peice of equipment that can up your revenue or lower the wear on your employees. No matter what anybody else says, your employees are your most expensive investment. AND, they can walk away at any time and leave you with no equity. When you pay into a piece of equipment, it has a tangible value that you can trade or sell or evaluate at the sale of your company. My guys have comp, health insurance, paid vacations and holidays and only work 4 days a week. Yet and still, I would much rather pay for $600 a month for a skid than $2400 a month for a groundsman. And, a skid replaces two groudsmen.
Customers used to ask me; why don’t you have a chipper or a lift or stump grinder on this thing or that? I would reply that we were doing fine without it, but the truth was that we didn’t have them because we hadn’t figured out how to get them yet. Now that I have them, I would never go back. We are doing a lot better than fine nowadays.

Are you leasing or when you say “ pay $600 a month or borrowing?

 

[Stephen Moore]

Let’s see? Shall we? A new articulated minnie with grapple and cleanup bucket/ maybe a rake will be 40,000 dollars.
$600 a month is 7200 bucks a year, times 5 = 36 grand by my math. There isn’t even any interest in there yet. Nor fuel? And it ain’t gonna drive itself, so you might need to hire that 2400 a month groundie to drive it! It needs a way to get to the job site and to the shop when it breaks!
If you lease, it ain’t an asset. You can use the lease payments as a deduction but you don’t own it. If you borrow, you can use the tax as a deduction and write down depreciation, but when you sell the asset you must declare capital gains! In other words you will get taxed on the sale of the depreciated asset.
It ain’t all gravy!

 

[CanaryBoss]

I guess it all comes down to what type of business model you want to have. I commend the guys who run companies personally and are out there on the ground every day with their workers. It takes a lot to do that I know because I used to. It just was not a long-term goal for me. In order to get out of doing that on a daily basis I had to build my company to a size that could support enough employees to not have me on scene all the time.

That’s in my opinion why being bigger is better. As you get larger your margins may not be as big but you’re taking a percentage of such a large amount of money that what is left is usually bigger. There may be some exceptions to that.

I think there’s arguments for both sides. if the angle you want to take is to not be in the field every single day, bigger is better. if you want to have your hand on every single thing that’s done in the company at all times to make sure that you can manage it personally, maybe smaller is better.

My guys could drive me crazy sometimes with the things that they break Or the things that they screw up. I had to come to the point where I realized that I would take some losses and I would have some embarrassing moments owning a larger company because not everybody’s going to do things right all the time or take ownership. That’s something that I’m willing to live with to be able to have some freedom in my personal life and to know that I won’t be working into my 40s. I enjoy the industry and I definitely enjoy climbing, but I have two boys under two and I’d rather spend time with them than any of that stuff.

I appreciate the feedback and response to my posts. I really enjoy dialoguing with you guys.

 

[guymayor]

"I think there’s arguments for both sides. if the angle you want to take is to not be in the field every single day, bigger is better. "

You mean hire people to make the biz self-sustaining, got it.
But I don't want to be in the field every day, and I don't have to be, cuz I'm a 1-man company. So there's arguments for at least 3 sides.