How many almost went broke?

[deeker]

I started my tree service 4 years ago. thing where great for the first 3 years. with the economy as it is this summer things are very bleak, Hell I made about as much money last July as I have made so far this year. I have no employees just me and my wife work together so at least no one else has been put out on the line to dry. lucky everything I have is bought and paid for so my small busness has no bills. I always paid for every thing up front. I do have a mortgage on my house and about 90 acres of hunting land but only owe about 24 grand on that. think I am going to have to remortgage that to have money to make it through the winter unless a good tornado comes plowing through the area, but unlikely there hasn't been one of them here for 50 years. but I am frugal, have a couple big gardens and hunt allot of wild game so be it as life goes on.............if all else fails i will become a liberal and go on the dole:greenchainsaw:

The last option won't work for you or me. We work for our pay.

Great post. Thanks

 

[Apocalypsse]

What kind of startup budgets did people have to keep themselves afloat?

 

[Garden Of Eden]

Hey everyone. Only reason I'm chiming in, is because I think this may help someone lurking. Before I started my business, I made sure I had 100% of the capital to buy any and all equipment I would need. Insurance for 6 months atleast, and any other fees and such. Then I went ahead. No I am in the same position I was before the biz, even if I never fire the saw again. I pay 100% of the payroll taxes for people I hire. I don't even give them a choice. Since I know all them personally, I can explain why I do this and everyone is ok with it. My payroll company charges 2% of profit, and $2 per check they write. I pay bi-weekly, so it's very little $$ from me, and I then pay taxes quarterly, just to be safe. I take 35% and save it from every job so that I know I can pay taxes, and I do everything in my power to keep uncle sam off my back. As far as going broke? Not as long as I profit around 1000/month. That's 30 days to make a grand to pay my bills. Its very do-able for me. Even in a city with over 20% unemployment. My wife works also, and we've no kids to speak of, so, right now everything goes to bank. Also, if times do get aweful. I have 6 months worth bills in the bank, just in case.

Hope this helps, and God bless

Jeff

 

[Apocalypsse]

Awesome advice, thanks for that. What about operating capital? Is there a minimum balance you will always keep for the rainy day when something goes wrong? I think a lot of businesses fizzle out because they dont have anything/much in the way of operating capital.

 

[Garden Of Eden]

Awesome advice, thanks for that. What about operating capital? Is there a minimum balance you will always keep for the rainy day when something goes wrong? I think a lot of businesses fizzle out because they dont have anything/much in the way of operating capital.

I do. I try and keep 6 months as well for capital. Of course, that's in my business account, separate from personal, and it doesn't always stay there. I'm not the biggest company by far, however, I don't want to be either. lol

My insurance picks up any problems with my saws, truck, or anything else I list. It will give me replacement value, up to $1000/saw. I just hesitate to use it for small stuff, just to upgrade my company. That would be a difficult one to explain to the big man. lol

Honestly though, operating capital is minimal. Blades, gas, what else is there? Insurance is paid, so...I try and offer customers the best thing money can't buy, service. I may not know everything, but I know enough people I can ask.

Thanks everyone,

Jeff

 

[TreeClimber57]

www.TreeCo.biz

Looks good to me!! You got my vote as well.

 

[Blakesmaster]

My 2 partners ( one is a brother and the other is like one ) and I each chipped in about $7500 bucks to get the basic equipment needed to operate as a tree service about 2 years ago. Since then we've become "legit" ( insurance, taxes, certs, advertising, etc. ) and have yet to take a personal penny out of the company pot. We all still maintain our day jobs to pay our own bills so the economic "crisis" didn't hit us hard. Yes, there wasn't as much work as expected this year but we're not concerned, still getting our name out there. We've upgraded equipment as the funds became available and have yet to borrow a thing. We just keep working our asses off and hopefully we'll be better off in the long run.
http://www.choicetreecare.com

 

[TimberMcPherson]

I started with 15k I had saved from being paid 12$ an hour running another guys tree business and farm work. Brought a 4wd terrano which ended up being a rust fest, a 066, a ms200, a yellow pages ad, insurance and climbing kit. I lived with 5 others so could live on $120 a week (ah to be single again), which is what I paid myself for 3 years while I poured money into the gear fund. (which has kept flowing).
Couldnt keep gear in truck on street so put my bed up on blocks so I could fit gear underneath. Bed ended up being at waist level.
Worked solo and to cheap for 2 years, contract climbed for other companies and did some dumb take downs solo (came up with a rigging system that allowed me to rope, cut, lower and retrieve the rope afterwards all from in the tree).

Had some lean times and bad luck with vehicle. Being single, debt free and able to live dirt cheap got me through.

 

[rahtreelimbs]

I just moved from Pennsylvania to Georgia because of my wifes job. I am trying to get a regular day job and get a tree business off of the ground. Slow times that is for sure!

 

[Kansas]

Well my 2 cents..Looks like every person here has the balzz to hang out a shingle in the first place and that says more about a person than how much money you make imo.

I have been in business for myself for 20 years and 3 months this time and a few years each other time I went off on a tangent and thought I knew it all.

I fix Asian cars for a living Toyota and Honda is my specialty and do it well and make a little money at it again and have quite a good rep thanks to being honest and straight forward and standing behind my work and giving thorough and accurate estimates thats the key in my line.

I made money right off for 3-4 years working by myself then I hired people to work for me and I started loosing money.

Cash flow in and out went way up net income went down and then the gubermint gets in and there goes more money out the window work comp, ss, medicare, taxs etc and then there are comebacks and theft and broken parts and more money gone, sick days, low productiion on good days, bill collectors garnishing employee wages and on and on gets real old.

I had enough 5 years ago and have gone back to a one man shop and back to making money again actually enjoying work agaiin I can come and go as I want.

edit: almost forgot yes I have gone broke twice and bankrupt once and since then I have 2 rules of being in business and its on a sign in my front office it reads-

Rule 1; You cant make a living off of people that dont have any money
Rule 2: You cant loan people money in order for them to do business with you

Thats worth more than 2 cents just keep the "change"

Kansas

 

[deeker]

Well my 2 cents..Looks like every person here has the balzz to hang out a shingle in the first place and that says more about a person than how much money you make imo. :clap:

I have been in business for myself for 20 years and 3 months this time and a few years each other time I went off on a tangent and thought I knew it all.

I fix Asian cars for a living Toyota and Honda is my specialty and do it well and make a little money at it again and have quite a good rep thanks to being honest and straight forward and standing behind my work and giving thorough and accurate estimates thats the key in my line.

I made money right off for 3-4 years working by myself then I hired people to work for me and I started loosing money.

Cash flow in and out went way up net income went down and then the gubermint gets in and there goes more money out the window work comp, ss, medicare, taxs etc and then there are comebacks and theft and broken parts and more money gone, sick days, low productiion on good days, bill collectors garnishing employee wages and on and on gets real old.

I had enough 5 years ago and have gone back to a one man shop and back to making money again actually enjoying work agaiin I can come and go as I want.

edit: almost forgot yes I have gone broke twice and bankrupt once and since then I have 2 rules of being in business and its on a sign in my front office it reads-

Rule 1; You cant make a living off of people that dont have any money
Rule 2: You cant loan people money in order for them to do business with you

Thats worth more than 2 cents just keep the "change"
Kansas

Great points, unable to rep you for now....

Kevin

 

[Kansas]

Hey Kevin thanks for that!

The moral of my story is credit will kill you if you arnt carefull!

Part of the being in business game is having venders give you monthly accounts. So as not having to write a check for every single thing but the other edge of that knife is giving the consumer access to that line of credit they can take you right out of the game.in a heartbeat and its no skin off their hiney its up to you to pay for the collections etc.

Another small sign on my wall is "My policy is the same as Walmart, Dillons, Sears etc its paid for before you walk out"


Kansas

 

[Kansas]

Hey everyone. Only reason I'm chiming in, is because I think this may help someone lurking. Before I started my business, I made sure I had 100% of the capital to buy any and all equipment I would need. Insurance for 6 months atleast, and any other fees and such. Then I went ahead. No I am in the same position I was before the biz, even if I never fire the saw again. I pay 100% of the payroll taxes for people I hire. I don't even give them a choice. Since I know all them personally, I can explain why I do this and everyone is ok with it. My payroll company charges 2% of profit, and $2 per check they write. I pay bi-weekly, so it's very little $$ from me, and I then pay taxes quarterly, just to be safe. I take 35% and save it from every job so that I know I can pay taxes, and I do everything in my power to keep uncle sam off my back. As far as going broke? Not as long as I profit around 1000/month. That's 30 days to make a grand to pay my bills. Its very do-able for me. Even in a city with over 20% unemployment. My wife works also, and we've no kids to speak of, so, right now everything goes to bank. Also, if times do get aweful. I have 6 months worth bills in the bank, just in case.

Hope this helps, and God bless

Jeff

Rep for that well done your business model sounds like something from one of my favorite talk radio guys Dave Ramsey!

Good luck to ya thats a good start "cash is king" for sure!


Kansas

 

[Garden Of Eden]

Rep for that well done your business model sounds like something from one of my favorite talk radio guys Dave Ramsey!

Good luck to ya thats a good start "cash is king" for sure!


Kansas

Thanks. That's exactly where I got it from. I started right out of H.S. in a management position making anywhere from $175,000 at 18, all the way up to $250,000 at 22 yrs old. I realized I had very little to show for it. I got into some trouble with the law, and took a couple steps back. Now I do all I can to keep the Government off my back, and out of my pocket. I try and educate all my employees on it too. After a month or so working for me, I buy them all a copy of the Total Money Make-over. It seems to help most.

Kansas, you still have accts at vendors? I almost did that at a stihl shop near me. I have about $200 cash on me most all the time, plus the business debit card. I just am a receipt-whore, just ask my wife. How do you do the account thing? Just one check for everything every month? Seems like a lot of adding, or am I wrong?

Thanks,

Jeff

 

[Kansas]

Kansas, you still have accts at vendors? I almost did that at a stihl shop near me. I have about $200 cash on me most all the time, plus the business debit card. I just am a receipt-whore, just ask my wife. How do you do the account thing? Just one check for everything every month? Seems like a lot of adding, or am I wrong?

Thanks,

Jeff

Hey Jeff,

Yes I still have accts payable with venders (not Daves way I know) they just send me a bill @ the end of the month and 99% are due by the 10th we pay ahead a little so they get their money on time.

I have accts at probably every major dealer and parts house in the state and some out of state, the real kicker is cod charges and tax for me since I am a retailer it makes no semse for me to pay taxs at point of sale and the time it takes me out of production to sit down and open quickbooks and the cost of inkjet checks etc etc.

Also wholesale parts are obviously the cheapest way to go for most of us, also most places that sell wholesale do so that they dont have to mess with taxs etc thay can write you up and throw it in a box out the door.

Here is where my way and Daves way cross paths , we save 10% of every deposit right into business savings IE if its a $1000 deposit $100 goes into savings at the driveup window at the bank, and I have done that for 20 years its saved my butt a million times. hth

(remember my 2 rules for being in business posted above it was hard learned lessons)

Kansas

 

[Garden Of Eden]

Yes I still have accts payable with venders (not Daves way I know) they just send me a bill @ the end of the month and 99% are due by the 10th we pay ahead a little so they get their money on time.

Kansas

Not a big deal if it works for you. Good idea to pay ahead, I do the same thing with things like my phone, and that sort of thing.

I have accts at probably every major dealer and parts house in the state and some out of state, the real kicker is cod charges and tax for me since I am a retailer it makes no semse for me to pay taxs at point of sale and the time it takes me out of production to sit down and open quickbooks and the cost of inkjet checks etc etc.

Kansas

You have accts, but since you're also a retailer, you're tax free, correct? couldn't you just get a debit card and swipe, save the reciept, and on a real crappy no-work day, compute everything you got so far, keep on top of it for the month? I do see the problem with extra math with taxes and COD charges though. That would take some serious time. Curiosity, how much time you spend every month on bills though? Thanks.

Here is where my way and Daves way cross paths , we save 10% of every deposit right into business savings IE if its a $1000 deposit $100 goes into savings at the driveup window at the bank, and I have done that for 20 years its saved my butt a million times. hth
Kansas

Fantastic idea, I wish more people would do something similar. If you look at my business bank acct, I'm like broke as a joke, but if you look at my wife, I'm a lot better off.

Something I forgot too...

I have a trust set up with mine and my wife's name as owners. Under the trust is a leasing company, that owns all the equipment. All of it. That's in my wife's name. Next is the actual tree company. That's mine, and it does all the work. I "lease" the equipment from my wife's company each job. It's a little more paperwork, but I don't do it. I pay a guy. Plus, I lease it for 75% of the bid, each and every job, just to keep it straight. The way it's set up, lets say someone sues me and for whatever reason, my insurance doesn't/can't cover it, they can only get the capital from my tree business, nothing from the leasing company, because they're separate corporations.

Hope that's clear.

Jeff

 

[belgian]

www.TreeCo.biz

Nice Website Dan
Kinda like the creatures....

you got my vote as well :greenchainsaw:

 

[Kansas]

Not a big deal if it works for you. Good idea to pay ahead, I do the same thing with things like my phone, and that sort of thing.



You have accts, but since you're also a retailer, you're tax free, correct? couldn't you just get a debit card and swipe, save the reciept, and on a real crappy no-work day, compute everything you got so far, keep on top of it for the month? I do see the problem with extra math with taxes and COD charges though. That would take some serious time. Curiosity, how much time you spend every month on bills though? Thanks.




Fantastic idea, I wish more people would do something similar. If you look at my business bank acct, I'm like broke as a joke, but if you look at my wife, I'm a lot better off.

Something I forgot too...

I have a trust set up with mine and my wife's name as owners. Under the trust is a leasing company, that owns all the equipment. All of it. That's in my wife's name. Next is the actual tree company. That's mine, and it does all the work. I "lease" the equipment from my wife's company each job. It's a little more paperwork, but I don't do it. I pay a guy. Plus, I lease it for 75% of the bid, each and every job, just to keep it straight. The way it's set up, lets say someone sues me and for whatever reason, my insurance doesn't/can't cover it, they can only get the capital from my tree business, nothing from the leasing company, because they're separate corporations.

Hope that's clear.

Jeff

Jeff,

Yup clear as a bell to me!

I have an accountant that keeps my books and all my stuff is on quickbooks it keeps track, plus we send a micro backup drive of it to him every month so he sees my check book and all the checks I write.

He charges me $100 a month and prepares my monthly sales tax we just print a check and mail it in the pre-paid state envelope that keeps me ahead of the tax collectors if and when there is a problem, I make $66 an hour labor and some on parts when the gettins good so he is cheap.

As far as swiping a card I really dont trust anybody with my info in order to do that each and every time there would be some $6.50 hour person with my info not worth it imo.

Fwtw my wife and I both got cell phone calls last night at home some automated message saying our debit cards had been disabled and them wanting us to verify our info!!!!!

Thats BS if you ask me we both hung up and today on the front page of the local paper is local phone SCAM on DEBIT cards so there ya go kind of scarry now a days with these cards.

Sounds like the payout will work fine for ya long as you get paid.

We were incorporated (not an LLC) for many years for liabillity reasons like you, and dont get me wrong I have no idea what your lawyer has in mind for ya but we saw that it really didnt pay us to be a corperation and actually when we went broke it actually helped us NOT to be one so ymmv but thats my story.


Kansas

 

[Garden Of Eden]

Jeff,

Yup clear as a bell to me!

I have an accountant that keeps my books and all my stuff is on quickbooks it keeps track, plus we send a micro backup drive of it to him every month so he sees my check book and all the checks I write.

He charges me $100 a month and prepares my monthly sales tax we just print a check and mail it in the pre-paid state envelope that keeps me ahead of the tax collectors if and when there is a problem, I make $66 an hour labor and some on parts when the gettins good so he is cheap.

As far as swiping a card I really dont trust anybody with my info in order to do that each and every time there would be some $6.50 hour person with my info not worth it imo.

Fwtw my wife and I both got cell phone calls last night at home some automated message saying our debit cards had been disabled and them wanting us to verify our info!!!!!

Thats BS if you ask me we both hung up and today on the front page of the local paper is local phone SCAM on DEBIT cards so there ya go kind of scarry now a days with these cards.

Sounds like the payout will work fine for ya long as you get paid.

We were incorporated (not an LLC) for many years for liabillity reasons like you, and dont get me wrong I have no idea what your lawyer has in mind for ya but we saw that it really didnt pay us to be a corperation and actually when we went broke it actually helped us NOT to be one so ymmv but thats my story.


Kansas

I get the scams and such, there's not really a lot that can be done to prevent it though. You get the same calls personally, as i do with my business. So we both lose. lol Honestly after a couple yrs, my trust has build it's own "credit," so I have identity theft protection on it. I also can only spend X amount of $ if I don't call them, which is annoying, but safe.

The trust is the only entity which is a corporation, the rest are LLCs. I actually kinda like this idea, cuz the govt, can't force me into a "fire-sale" of my equipment in the event of a bankruptcy. Ya know?

I'll be honest, it takes me almost as long to decipher the abbreviations as it does to read the messages. lol I'm so guilty too...

Best of luck to you and your family. Been excellent swapping ideas with you.

Jeff

 

[Kansas]

Best of luck to you and your family. Been excellent swapping ideas with you.

Jeff

Same here best of luck to ya!

Btw my accountant has a couple rules too I will throw in as a PS he says:

1) "Profit isnt a dirty word" and
2) "There arnt any tax deductions without a profit"


Kansas