Steps to making to bus. succesful

[daveyclimber]

Steps to making a business succesful

I am planning on starting up my own business around the first of the year . I know the ins and outs of the business having nearly 10 years experience. My partner also has 10 years experience . What are some ways to diversify your business along with the tree aspect , I already have a stump grinding business and have also thought of rain gutter cleaning and installing barriers . I seen an ad in a recent paper about tree services installing X-mas lights to help make it through the holidays . We basically have no credit as we have both filed for bankruptcy in previous years . I am getting a loan from my parents , they are doing an equity loan on their home in the amount of $100,000 . What are some ways of protecting them and their assets . I figure $75,000 will about cover all of the equipment if we buy smart . The remaining $$ will be used as cushion money until things get up to speed , also some of this money will be used for advertising . What types of advertising do you guys use other than phone books and word of mouth.

 

[BlueRidgeMark]

http://www.gmarketing.com/


http://www.joegirard.com/books.html



The principles taught on these two web sites are applicable to ANY business.

 

[darkstar]

Stay away from loans for a bit bro. It only took us 3 years - to go from a old pick up and a chain saw with rope to having 3 chippers ,one bucket truck ,2 large chip trucks and one awesome loader , all totally owned and payed for [[[[[from climbing and then humping trees to the tip]]]]]]. Sell your self not your gear . Diversity and advertising only takes a little creativity and will be specific to your area .

 

[PTS]

Stay away from loans for a bit bro. It only took us 3 years - to go from a old pick up and a chain saw with rope to having 3 chippers ,one bucket truck ,2 large chip trucks and one awesome loader , all totally owned and payed for [[[[[from climbing and then humping trees to the tip]]]]]]. Sell your self not your gear . Diversity and advertising only takes a little creativity and will be specific to your area .

I have to agree. I started with a $250 old pickup truck, a free truck box trailer borrowed chainsaw and a borrowed hedge trimmer. Now I got it all and it has only been about two years. Start small!!! Buy when you can afford it. My first purchase was my own saws and then a dump trailer, from there it was another truck, a bucket truck, skid loader, chipper and chipper truck, stump grinder and then we started doubling up. The less you owe the less control others have on your business. We needed some extra cash once and my parents gave us $25,000. Every time I looked at expanding or upgrading I had to listen to my dad say sounds good when you get everything else paid off. Got real old hearing that.

 

[ASD]

Stay away from loans for a bit bro. It only took us 3 years - to go from a old pick up and a chain saw with rope to having 3 chippers ,one bucket truck ,2 large chip trucks and one awesome loader , all totally owned and payed for [[[[[from climbing and then humping trees to the tip]]]]]]. Sell your self not your gear . Diversity and advertising only takes a little creativity and will be specific to your area .

davy climber slow down a bit we also started with a 09 stihl an 036 stihl a 1974 Chevy 3/4 ton up(about $5000 in gear). and rented a chipper as needed for the first 8 months it's been 6 years and we now have over 1mill worth of equipment and keep 10 people working 40hr.+ all year long.

put add in the Ph.book
if you have any friends in real estate have they get you some mailing lists and send out some post cards.

 

[daveyclimber]

I can agree with the loan thing , however the payments will be low ,30 year loan with no prepayment penalty 6.6% interest. We really must start out with the good equipment to stand out from the large number of pickup truck trimmers . Don't get me wrong , There aint a tree that we can't climb and take down succesfully . A job with the right equipment will equate to lower bids and more volume. I want to start out with more than a pickup truck , been doing that on the side for years and it will not give you the credit it deserves around here . My payment for the loan is only gonna be 750 or so , when business picks up after a couple of months we can afford to make double payments and such. My current boss has offered to sell me his business in three years but I am not willing to wait for broken promises , Been working for him for close to 4 years and he still cant get me work everyday .Worked for Davey for 7.5 yrs I have the knowledge and ambition ,just hope I dont have to rely on luck.

 

[BlueRidgeMark]

I can agree with the loan thing , however the payments will be low ,30 year loan with no prepayment penalty 6.6% interest. We really must start out with the good equipment to stand out from the large number of pickup truck trimmers . Don't get me wrong , There aint a tree that we can't climb and take down succesfully . A job with the right equipment will equate to lower bids and more volume. I want to start out with more than a pickup truck , been doing that on the side for years and it will not give you the credit it deserves around here . My payment for the loan is only gonna be 750 or so , when business picks up after a couple of months we can afford to make double payments and such. My current boss has offered to sell me his business in three years but I am not willing to wait for broken promises , Been working for him for close to 4 years and he still cant get me work everyday .Worked for Davey for 7.5 yrs I have the knowledge and ambition ,just hope I dont have to rely on luck.

I hear a bankruptcy being planned. I'm serious, Davey. You are doomed if you don't change your thinking.

Tools are just tools. They won't make you successful.

Debt is a more dangerous tool than a chainsaw. It's even MORE dangerous to those who don't recognize the danger. You're like a newbie with a 440 and a full chisel chain, with no training and no PPE.

 

[ASD]

ok if you want to jump in with both feet what do you want to start out with ?? i am selling off some of are stuff

2004 vermeer bc1000 12" chipper
2000 vermeer sc252 stump grinder
2004 vermeer sc750 stump grinder
1999 ud chip/dump
2000 int bucket forestry package

 

[skwerl]

Good luck DC. I have to admit I'm jealous that you have a $100K advantage over me and most everyone else here starting out. Most of us wouldn't know how to start and successfully build a business with that kind of windfall head start. Many of us have seen newcomers with lots of money and no idea how to run a business and we've watched them fail. I guess most of us believe that the beginning years when we struggled with little money are what motivated us to work harder and become successful. Money can't buy the intangibles, and many of us built our businesses on those intangibles that we acquired through blood, sweat and tears shed trying to survive in those early years.

I certainly wish you all the best. Sounds like you got a sweet setup coming your way.


edit: Oh, if you have $75K in tree equipment then you certainly have no business hiring yourself out cleaning people's gutters. That's a job for the neighborhood teenagers and pre-teens.

 

[Dadatwins]

I have to say I would not be to happy having the word bankruptcy in any business plan either. It takes more than equipment and borrowed $$$ to run a business, you need to know how to manage your assets and build up your clientel. Another red flag I see you are already willing to low bid on your jobs just to get them. Better to offer quality work at a fair price and get recomended by your clients. You do not want to be known as the low-ball tree service especially with a 100k note to pay off. There will always be a low baller around that will beat your price, but make sure they can't beat the quality of work. You say you have a partner ready but YOUR parents are putting up the $$$. What provisions have you to made to make sure if your partner decides in a few months to break off and go on his own, that YOUR loan will get paid while you look for help. I wish you the best of luck, but I see a few problems with your plan that would scare me.

 

[daveyclimber]

The bankruptcies were not due to mismanagement of money ,they were from a mis managed marriage , I did not say i was going to under bid everyone , wht I guess i meant to say is It is possible to do your job faster and have less expendetures with the proper equipment . If I had to climb at tree I would charge more than if I could use a lift. My current boss however thinks he can charge 1500 a day and doesnt want to go less than that . That is why he only works me 2-3 days a week .Youy might be saying 1500 sounds fair enough until you factor in me and two other ground guys . lift truck and chipper for 4-5 hrs of work . Everytime I bid for him we work more during the week , his take home ends up being higher everybody is happy including the customer . I charge comparable prices , not cut throat or rip off prices . I know that I will be working everyday and making profit everyday within the first 6 months . I'm not just a climber , I have my own legit stump grinding business and have had other business experiences as well . Fact of the matter is my boss would have went under a couple of years ago if it werent for me working for him . If I can have the ability to turn his business around I can surely do well for myself . I know it isn't going to be all roses , i can see alot of hard times , but you will never find anyone out there who will give it everything it takes , I know I can do it ,and frankly that is why my parents offered to help .I am glad I am getting so many respones out of you guys . Learning by others mistakes and getting good advice go along way in helping me

 

[xander9727]

First and foremost I do not recommend partnerships. Historically they have lead to problems. So work, most don't. If you are set on a partnership I strongly suggest an LLC. That way you get the tax benefits of a sole prop. but you are protected. Starting off looking like a hack makes you a hack. Buy the best equipment you can afford. By that I mean what you can afford to pay the note on when you are slow, afford to maintain and repair and afford to keep busy. There is nothing wrong with renting the equipment you don't use every day. Most residential tree work can be done without a bucket truck. You can get a lot more chips in a truck without a lift so you'll need fewer trucks on large jobs. If you get a business line phone number you will be listed in a yellow pages you just won't have an advertisement. Definately buy a chipper.
Hope this helps. Feel free to email or PM me if you have questions. I've been on my own for 3.5 years and I started in an area I hadn't lived in for 12 years so I had very few contacts. I now have 3 trucks, a 15" chipper, a skid steer, 2 stump grinders, 13 saws, a spray rig, a 4wd tractor with a loader, several trailers and a lot of rigging gear and tools.
It can be done but it is not easy.........and it won't happen working 40 hours per week.

 

[xander9727]

The bankruptcies were not due to mismanagement of money

Sorry to point this out.........but aren't all bankruptcies due to poor money managment?

 

[daveyclimber]

Sorry to point this out.........but aren't all bankruptcies due to poor money managment?

Ya know , I guess that is a true point . Damn those ex wives It is not really a partnership , just good friends going to business together , I can see possible senerios where things might ruffle ,but in the end the money is gonna be mine to manage and mine to spend , my name is going to be on the business account and I will be making the calls . Already discused that part of it . We have worked together for 10 years , moonlighting while working for Davey Tree and have never had an issue . Hell, we rarely have to talk to eachother on the job we know our place and what needs to be done.However we will both be getting contractors licsenses and filing for a joint licsense , anybody see any issues with that ? Point is to limit workers comp costs and of course be an upstanding business. Xander , thanks for your positive input , you gave me a bit more inspiration. You taken any business classes ? I have been following what you have posted here lately and you seem to have a true grasp on business

 

[xander9727]

Thank you for the kind words.
I have taken business courses in college but I learn more from talking to successful business owners and those who have failed. I try to avoid the failure pit falls and model the success stories. Additionally, I constantly am reading and trying to find ways to improve myself and my business.

 

[sotc]

theres a lot of good advice here, especially what xander has said about llc's and partnerships. seriously look into an llc and for goodness sake get a partnership agreement in writing!! it your parents money and the way it is now he can spend it all and leave. he can actuall get YOU into debt and leave, even with bad credit! good luck my freind

 

[BlueRidgeMark]

If I can have the ability to turn his business around I can surely do well for myself .

It's easy to think so when you haven't actually done it. (And you haven't.) You aren't running his business and you aren't paying his overhead. There's more to business than GETTING business.


Speaking of partnerships, I had a friend who was making megabucks as a partner in a Mercedes repair shop. They were in San Francisco, did good work, and marketed well to the rich folks. Everything was great.

One day his partner offered to buy him out. He said no.

Came to work a few weeks later to find the locks changed. A sherriff handed him some papers. He was out.

Out. Not one dime. Not a legal leg to stand on.

Seems he didn't read the fine print. If a partner offers to buy out, you've to two choices, sell or buy. Do neither, and your partner owns you by default.

If you go ahead with this foolish venture, at least make sure you know what the laws are in your state. Make sure you read YOUR contract.

And have pity on your parents. They might want to retire some day. They shouldn't have that ruined by you. Find another way to do this.

 

[wpbgent]

davey, write out a business plan (thoroughly) and model it on the premise of "BARE MINIMUM"... Make it your challange to do it at the absolute minimum! See what you can come up with... Don't forget to include different means of advertising, rained out days, vehicle / equipment failures, NON paying customers... etc

 

[Koa Man]

To get my business going, I worked 70-80 hours a week and 7 hours a day for 5 years. I had a full time job with an airline with 2 weekdays off and worked the afternoon shift. I worked this business in the mornings till noon on my regular workdays and all day on my airline days off. So I had a steady source of income while I built the business up. The hardest part is getting a big enough customer base to support your business. It will take time and you will need to be committed to stick with it. It will not be easy. I quit working for the airlines and went full time into the tree business in 1988. I look back at the 5 years of struggle and it was well worth it. I am always busy, booked out 4 to 6 weeks in advance and still turning down 3-4 jobs a week because I am too busy. At this point I thought I would be working just 4 days a week and have 3 days off. It has gotten worst and a lot of times I am working 6 days a week. Hopefully when my son-in-law joins me in Feb. 2006 after he gets out of the service I can get my 3 days off.

The rewards of owning a successful business is great, but the pitfalls and risks are many. Be committed to do whatever it takes and you will be successful (assuming you have good business skills). Do a good clean up of the yards....people like that and think that is what a good tree service is all about.

 

[howel07264]

Davey,forget the partner unless he has 100k to invest also.think CASH FlOW,you said you will be making a profit within 6 months, you better be making a profit from day 1. just because you have all the equipment does not mean jobs.invest in advertising first with just enoungh equipment to get the job done. you can always add equipment as your buss. increases. NEVER attempt to be lowest bidder in town. HAD YOU RATHER DO TWICE THE WORK FOR HALF THE PRICE OR HALF THE WORK FOR TWICE THE PRICE? i know which one i would choose.another thing, dont take 100k lump sum,have them get a line of credit to be used ONLYas needed.