Started a New Stump Grinding Business.... Sheeeesh!

[kaiserkahn]

My previous line of work slowly petered out a few months ago. I soon found a vermeer 352 self propelled at an extremely good price for the condition it was in and jumped feet first into stump grinding.

I went and looked at a utility trailer for my new/used stump grinder. This guy new someone who had about 50-60 stumps. I didn't buy his trailer, but he was nice enough to give me the name and address of the people needing the stumps ground. He already gave them a price of $400 as I think he had a buddy that did stump grinding as well, but was very busy at the time. I go over and talk to the people. I quote $500 as there looked like quite a few stumps. Most were "4-"6 diameter. They said no $500 was too much as they were already quoted $400. I agreed as I quickly needed to start paying for my machine. Long story short the ground was covered with quite a few leaves. There ended up being about 125 total stumps. You couldn't see a lot of them until you start going around one by one. Lots of those were saplings and such that were 2" in diameter. They ended up paying me $560 for 12 hours worth of work as there was certainly more there than what any of us thought.

The second job I went and looked at had about 38 stumps. Half were 20"+. 5 of those were 20" doubles. I quoted $400, but felt it should be like $500-$600. They had $300 in mind, but agreed to $375. The ground ended up being horrible in one spot as I kept finding rocks. Almost got P.O.'d enough to just quit and walk off. About the same time they also built a fire and was burning brush and trash. The smoke kept blowing my direction. Took 11 hours total and they paid $425.

Third job I felt better on. When I met the home owner he had about 12 stumps to grind down just a couple inches below the surface and 1 stump about 30" diameter. When I showed up with the grinder there were about 2-3 more stumps than what I recalled from memory. Oh well, all the stumps were located in the shade and along the shoreline of a lake with a nice breeze and view. Grinding was fairly easy. 2.5 hours and received $160.

Fourth job was a 15" bradford pear. This house was 2 miles from where I lived. It took about 1.5 hour total time and I received $70.

The people from my second job passed my name and information onto their relatives. Kept talking about word of mouth etc. would keep me busy. This relative called and wanted me to remove a stump about 36" diameter. I give him a rough price of $100 considering he lived a good 25-30 miles away. He wanted me to do it quickly(same day) as they were building a wheel chair ramp. $100 was a little too much so we agree on $80 and I would just get it flush with the ground. Hooked up my trailer and down the road I go to their house. Guy calls and decides they will just use a chainsaw to save them some money. I am P.O.'d as I thought I gave them a pretty fair price for what would be considered immediate service to help them out.

Today I talked to a guy about a 19"-20" bradford pear stump over the phone. Give him a rough ballpark of $100-$125 maybe more based on his description of above ground roots. I Said I could be there later that afternoon. There were several roots all over this particular area of yard. Waaay more than I ever imagined and more than what the home owner described. I hesitated initially about doing the job because it would probably turn into a PITA. He said another local and long established stump grinding outfit quoted him $150 over the phone and yet another even higher at $200. He would agree to $150 for this stump. I unhooked and was about to unload the stump grinder when I decided not to go through with it. It is 100+ degrees out now and I am tired of every job so far turning out to always being more involved than what the home owner thinks. The front yard was also very small. The proximity of his windows, neighbors house and yard, vehicles on the street, and utility lines that run underneath some of the roots next to the street was more than I wanted to deal with. I apologized for wasting his time and suggested he use the other outfit.

Gawd, is it the economy or what? I read all the pages that I can on this forum regarding stump grinding and pricing beforehand. Of course most of the posts do not take into consideration of the housing market and economy today. Seems tough to make anything greater than $50-$60 hr. at the most on small simple jobs. The mindset seems to average out to the high $30's/hr. or less than $10 stump for several large stumps. I don't see any money in stump grinding. I called every single tree company in the phone book and have not received a single stump yet from those phone calls. I figured that I need to set aside at least $10/hr. average for maintenance and for the stump grinder to pay for itself. $5 hr. in fuel to run the grinder. That equates to $15/hr. just to own and run a stump grinder. Add vehicle wear and fuel cost, insurance, advertising and then subtract 30% outta the profit for taxes. I used to own a machine shop and machine a lot of aftermarket auto parts. I thought manufacturing auto accessories was a poor career choice due to the overhead to income ratio. Was I ever wrong.

 

[Hddnis]

Read your whole post. Judging by our local market you are not charging nearly enough. Most of the jobs you described would go for about twice as much.

You need to offer exceptional service and don't try to compete on price.



Mr. HE

 

[joesawer]

Never agree to a fixed price over the phone. Always tell them it is a best guess.There are simply too many variables that are too hard to cominicate.
I have never felt like a stump grinder would be a good money maker. It is just something to sell tree jobs, or tinker with part time.
Mabe a few years ago after a hurricane some one could do good with one for a few months.

 

[Curbside]

It's funny so many people think stump grinding is a simple way to make a buck. People don't realize the cost in machines, trucks, trailers, phones, insurance, teeth and other maintenance. All they see is a guy showing up for 30 mins or an hour and getting between 75-150 dollars and think that is great money. Well I'm surprised more people don't get into appliance repair because they charge more and don't have 1/2 the overhead.

Your pricing sounds way way low. To drive 30 miles one way for a 100.00 you may as well just buy a 300 dollar lawn more and start mowing lawns for 12-15 dollars in hour.


I know the economy has slowed down in the US but if you are doing nothing but stump grinding and have no specialty over someone else you part of the problem because the only thing you have is low pricing because you desperate. You need to have a machine that no-one else has or you need to supply tree services with your services but the only thing you have to offer at this point is low price and when you have only low price you attract the bottom feeders who will nickel dime you and try to minimize there job and try to grind (pun) you for everything you got and more.

 

[kaiserkahn]

Hddnis, I am not complaining about my not charging enough. What I am gathering from what little work I have done and by price checks over the phone is that people around here or "our local market" simply do not have any money to spend and have likely cut back due to the economy and fuel prices. A lot of them also have no idea of the amount of cost involved and pretty much don't want to hear why you have to jack the prices above what they are willing to pay. I have given several prices that would yield a higher hourly average, but have not yet had the chance to perform a higher paying grinding job.

Joesawer, I try to give a "ballpark" price and let them know of other variables as they come to mind when talking to them. The home owner with the 19"-20" bradford pear stump talked about how the other stump grinding service seemed to be very knowledgeable about the age, size, and root system of the bradford pear. I don't doubt that a bit as the other stump grinding service has been around for a good 15-20 years that I can remember. The homeowner in this case was given pretty much a guaranteed price by this "knowledgeable" competiter and now he has no reason to believe why the price should be any higher. He was also trying to nitpick whether any sales taxes would be included in or added on top of the $150 price. How can a customer realize your exceptional quality and service when they are willing to haggle over something like sales tax. When I eventually declined to do the job I think his wife got mad at him for trying to be a little bit too cheap.

On my way to my second grinding job I passed a large tree service who is from the next town over. A crew of about 10 Mexicans were clearing out underneath some power lines. I tried to stop and give them one of my business cards in case they ever needed someone to grind stumps for them. Geez, none of them could speak or understand English. Probably had no idea that the thing on the trailer behind me was a stump grinder. Makes you feel real good trying to be a legitimate business and you still can't make it work. Knowing that only 1 in 5 are actually here legally.

 

[kaiserkahn]

Curbside,

I agree. Too much overhead, cost, and wear and tear for what little there is to be made. I can certainly understand an existing tree service adding stump grinding to their capabilities. I pretty much have decided to quit after today. I only have 2-3 weeks time invested so not a big loss there and I shouldn't have any problem getting my money back out the grinder.

 

[TDunk]

I charge a $100 min. to grind out a stump. It's doesn't matter if it 6" or 36". After the first 40" it's $2.50 an inch after that. (40"x $2.50=$100), clean-ups extra.

 

[Treeinnovator]

read your post...
wow, i have the exact opposite opinion. i've always found stump grinding to be the best part of my business hands down. sometimes i wish that's all i did. i'll explain:

stump grinding is the ultimate set up for maximized profit.
- you have 1 small machine and 1 person and a 5 gallon tank of gas.
- it can fit in a garage so you have no storage costs and don't have to get a warehouse bay to operate out of.
- it sips gas slowly so you aren't really effected by gas prices.
- it's really easy to move around jobsites and you can work around weather patterns.
- it's an extremely simple and reliable machine. rarely breaks down and when it does it's very simple to fix.
- it doesn't require a skilled worker where you have to pay them a high hourly rate. it's 3 levers and a bit of common sense. stump grinder workers make the same as brush draggers in my operation.
- there's nothing to take away from the jobsite. you have a little pile of mulch that you level out and you're done. no brush dragging, no dump fees, no debris issues at all. ask anybody on here... clean up and disposal is the most time consuming part of our business and usually the biggest hassle requiring large equipment and dump issues.
- weekly gas expenses are minimal. you're in a truck with a trailer and that's it. with that set up it's no big deal to take it to a job quotation in case they say "yes". large tree companies can't afford to drag all their equipment to a jobsite 45 miles away hoping they're quote is accepted. at $4/gallon, they'd get buried with fuel costs.
- it's small work and small pay outs. alot of cash and under the table pay without the 30% tax rate.

if you think you're having issues with customers, competitors, overhead, etc. with stump grinding, than don't go into the tree business on a larger scale. the problems and headaches with customers, workers, and machinery are multiplied tenfold. stump grinding is so easy.

personally i think you're doing excellent. look at all the business you got in a short amount of time without even advertising. the 2nd job you mentioned seemed really low. but if it's just you, your machine, and under the table cash payments... it's not so bad. when you have more work than you can handle, that's when you get fussy about low prices.

one thing to say about those jobs you mention...
customers ALWAYS say a stump is smaller than it really is over the phone. and sometimes they are speaking of a stump that is cut 2 ft above the ground when cut at ground level it's 2x or 3x as big. never quote over the phone. use an upside down 5 gallon paint bucket as a reference with an attached price to give your customer price quote. bring the bucket to the jobsite and when you compare it they will not argue over the price change (increase).

please tell us... how much did you paid for the grinder? and what year is it...how many hours?

 

[Treeinnovator]

It's funny so many people think stump grinding is a simple way to make a buck. People don't realize the cost in machines, trucks, trailers, phones, insurance, teeth and other maintenance. All they see is a guy showing up for 30 mins or an hour and getting between 75-150 dollars and think that is great money. Well I'm surprised more people don't get into appliance repair because they charge more and don't have 1/2 the overhead. .

sometimes i get the feeling people think stump grinders are price gouging. that's when i mention that the smallest model 252 will set you back $12K. and that's the reason our prices are the way they are. it seems to work if they understand that little yellow machine costs more than their car out front.

i bet appliance repairmen get beat down alot on prices. there's a handyman living on every neighborhood block.

 

[mckeetree]

I hate stump grinding. I was talking with another owner the other day and stump grinding came up. When I said there hasn't been any money in stump grinding in 25 years he laughed and said he didn't know there was ever any money in it. Firewood is another deal people get in thinking they are going to make a living. You could do pretty good with firewood 30 years ago but except for a few little micro markets nobody wants to pay what it is worth.

 

[ropensaddle]

I hate stump grinding. I was talking with another owner the other day and stump grinding came up. When I said there hasn't been any money in stump grinding in 25 years he laughed and said he didn't know there was ever any money in it. Firewood is another deal people get in thinking they are going to make a living. You could do pretty good with firewood 30 years ago but except for a few little micro markets nobody wants to pay what it is worth.

I mostly agree stumpin stinks because too many get into it
thinking they can do ok by charging less than the tree guys.
I sold my little grinder and bought a large tow behind for the
only jobs I am interested in are big one, a hundred or more at
a time! I have ticked off price shoppers calling and asking How
much, I only have one 10 inch stump cut low etc. When I say
125.00 minimum they go to back peddling and acting like I am
trying to skin them and I say, teeth cost me 400. per set 5 dollar
per gallon diesel and you think I am high, my price is now 300.00

 

[Treeinnovator]

I mostly agree stumpin stinks because too many get into it
thinking they can do ok by charging less than the tree guys.
I sold my little grinder and bought a large tow behind for the
only jobs I am interested in are big one, a hundred or more at
a time! I have ticked off price shoppers calling and asking How
much, I only have one 10 inch stump cut low etc. When I say
125.00 minimum they go to back peddling and acting like I am
trying to skin them and I say, teeth cost me 400. per set 5 dollar
per gallon diesel and you think I am high, my price is now 300.00

maybe stump grinding only makes sense on the smaller 252 grinders which are easy to pull around w/ a small pick up. the big grinders would set you back 3x to 5x the money plus you need a 4x4 gas guzzler to tow it. of course in some areas of the country you'll ge laughed out of town with a 252.
those big ones sure do pay off in a disaster area.

 

[ropensaddle]

maybe stump grinding only makes sense on the smaller 252 grinders which are easy to pull around w/ a small pick up. the big grinders would set you back 3x to 5x the money plus you need a 4x4 gas guzzler to tow it. of course in some areas of the country you'll ge laughed out of town with a 252.
those big ones sure do pay off in a disaster area.

I guessed you missed the part where I sold the little grinder 252.
I will never go back, time is money and if I am spending too much
of it at the stump it costs me lots of dollars in tree work. I now
grind a stump in five minutes that would take the 252 two hours
get the Idea?

 

[Curbside]

read your post...
wow, i have the exact opposite opinion. i've always found stump grinding to be the best part of my business hands down. sometimes i wish that's all i did. i'll explain:

stump grinding is the ultimate set up for maximized profit.
- you have 1 small machine and 1 person and a 5 gallon tank of gas.
- it can fit in a garage so you have no storage costs and don't have to get a warehouse bay to operate out of.
- it sips gas slowly so you aren't really effected by gas prices.
- it's really easy to move around jobsites and you can work around weather patterns.
- it's an extremely simple and reliable machine. rarely breaks down and when it does it's very simple to fix.
- it doesn't require a skilled worker where you have to pay them a high hourly rate. it's 3 levers and a bit of common sense. stump grinder workers make the same as brush draggers in my operation.
- there's nothing to take away from the jobsite. you have a little pile of mulch that you level out and you're done. no brush dragging, no dump fees, no debris issues at all. ask anybody on here... clean up and disposal is the most time consuming part of our business and usually the biggest hassle requiring large equipment and dump issues.
- weekly gas expenses are minimal. you're in a truck with a trailer and that's it. with that set up it's no big deal to take it to a job quotation in case they say "yes". large tree companies can't afford to drag all their equipment to a jobsite 45 miles away hoping they're quote is accepted. at $4/gallon, they'd get buried with fuel costs.
- it's small work and small pay outs. alot of cash and under the table pay without the 30% tax rate.

if you think you're having issues with customers, competitors, overhead, etc. with stump grinding, than don't go into the tree business on a larger scale. the problems and headaches with customers, workers, and machinery are multiplied tenfold. stump grinding is so easy.

personally i think you're doing excellent. look at all the business you got in a short amount of time without even advertising. the 2nd job you mentioned seemed really low. but if it's just you, your machine, and under the table cash payments... it's not so bad. when you have more work than you can handle, that's when you get fussy about low prices.

one thing to say about those jobs you mention...
customers ALWAYS say a stump is smaller than it really is over the phone. and sometimes they are speaking of a stump that is cut 2 ft above the ground when cut at ground level it's 2x or 3x as big. never quote over the phone. use an upside down 5 gallon paint bucket as a reference with an attached price to give your customer price quote. bring the bucket to the jobsite and when you compare it they will not argue over the price change (increase).

please tell us... how much did you paid for the grinder? and what year is it...how many hours?

Tree Inovator I agree that Stump Grinding can be profitable but not for everyone or everywhere. To just go buy a small grinder and hope you can make a living is just a pipe dream. You have to offer something different then all the others. Example being specialty machines for your area. Maybe a large self propelled unit if noone else has one. Also you may want to add stump grinding to list of several other things that you do for example running a bobcat or some other kind of work that will keep you busy as you break into the market.

If you think Kaiser Khan is doing good run the figures. By his own figues he's done three jobs for a total of $1055.00 To do those three jobs he spent 25.5 hours of working time so he made 42.00 per hour. But he does not factor in his travel time and his other jobs that did not end up going at the last minute when he was already there or almost there.

Now if he pays himself a wage of 15.00 per hour that will cost him 20.00 after labor fees (taxes compensation etc) that leaves him 22.00 per hour. Out of that he needs to pay for fuel say 5.00 dollars per hour that leaves 17.00 per hour then you have the routine matenance of the machine like grease, oil, repairs, belts teeth probaly works out to about 5.00 per hour. that brings you down to 12 dollars per hour. So with that 12 dollars per hour left you need to pay for your truck and fuel. Your vehicle insurance and business liability insurance, your trailer, your machine, your cell phone and advertising. Personally I think he's in a lost position just on the working hours now if you factor his estimating and travel expenses that aren't included in the 25.5 hours he's way under.

It sounds like that area is not a good stump grinding area maybe just to many people in that area.

Tree Inovator if you are doing stump grinding for a living I think if you run your figures you are making more than 42.00 per hour if its your sole business. Unless you are happy taking all the risks for 15.00 per hour.

 

[Cbrexdogg]

The company I work for has set minimum rates. We never give quotes over the phone and very rarely give our rates over the phone, because we will adjust rates based on difficulty/danger etc. We always try to actually look at a job before we send someone to do it. If the job is too far away,(30 miles or whatever) I'll usually tell the customer plan on spending x amount of dollars just to get us there. If they balk at that then you know it's a waste of time.

Kaiser it kinda sounds like you are just doing these jobs to work. That is just bad buisness. You should set down and figure out what you need to make to make a profit and stick to those rates. Strive to do the best job, not the cheapest.

 

[ropensaddle]

We are both from the same state and the competition is friggin
fierce and cheapskates many so I understand his plight.
Factor in it is all friggin rock and then you have it, high
maintenance low ballers etc. You will not compete with
a small machine you need to be able to grind 70 large
stumps per day to come out. My best day was 127 mixed
some 50 inch some five but that was 1270.00 and 100.00
in fuel 1/2 set of teeth= 200.00 and you start to understand
my thinking.

 

[Husky137]

Why do people put so much thought into a business venture AFTER the fact as opposed to before? Seems more time was spent doing the paperwork to buy the grinder than anything else.

The only stump guys I have seen that are profitable, are so because it is offered as an additional service as part of a tree service or they do it on the side and don't need to deal with competing with the lowballing hacks.

Giving any type of quote without seeing the job is just bad business technique.

 

[kaiserkahn]

My original thinking was to find a small piece of equipment that I could run by myself without having to have employees and also not to have to work for someone else right off hand. Truck, trailer, and grinder. Thats it, sounded simple. I just recently closed up a machine shop where at one point I had 6 employees working 2 shifts and 5-6 CNC machines. Lots of headache and overhead. What was nice though about machining parts was that the jobs were larger and could last for several weeks at a time and keep several people busy. Grinding a stump for an hour or two and then off to find a new customer just to make gas money with sux. At least when removing a tree the job itself is larger and more $$ is made with the same customer in the same location.

I originally thought about trying to get hooked up with a couple of tree services. That just has not happened. I also considered all the tornado damage that has happened in the last several months in our state. I guess times are tough and everyone is doing all their own work. I have a rough idea on how much I have to make per hour average to cover all cost. When I gave some of the prices that I did to customers, I did so knowing a little bit about their personal situation and feeling them out a little bit for what kind of price they already had in mind. In each case if I quoted a higher price then I probably wouldn't have ground any stumps at all. My original plan was to stick with X amount of dollars per hour average to cover all cost and profit. Quote jobs as such and simply do not do any of them if they go below the hourly rate. When you are starting out and have nothing at all to do then it is difficult to turn down work.

Curbside pretty much stated the same conclusion that I have come to after doing only a few jobs. I am better off to work for someone else than to stay in a losing position on my own. I just about quit shortly after starting my 2nd grinding job for all the rocks. The payment for the job would go to cover wear and tear on the teeth. This customer ended up knowing some of my family so I stuck to it and finished what I had started. I don't like to keep people hanging. My 3rd and 4th jobs were located within 5 minutes of my house so I continued on hoping things would improve. I never intended to get into stump grinding with the line of thought of under cutting everyone else. I have worked too cheap in the past on other things and it is not worth it.

I'm inclined to agree with Ropensaddle that this state is full of cheapskates.

 

[ropensaddle]

My original thinking was to find a small piece of equipment that I could run by myself without having to have employees and also not to have to work for someone else right off hand. Truck, trailer, and grinder. Thats it, sounded simple. I just recently closed up a machine shop where at one point I had 6 employees working 2 shifts and 5-6 CNC machines. Lots of headache and overhead. What was nice though about machining parts was that the jobs were larger and could last for several weeks at a time and keep several people busy. Grinding a stump for an hour or two and then off to find a new customer just to make gas money with sux. At least when removing a tree the job itself is larger and more $$ is made with the same customer in the same location.

I originally thought about trying to get hooked up with a couple of tree services. That just has not happened. I also considered all the tornado damage that has happened in the last several months in our state. I guess times are tough and everyone is doing all their own work. I have a rough idea on how much I have to make per hour average to cover all cost. When I gave some of the prices that I did to customers, I did so knowing a little bit about their personal situation and feeling them out a little bit for what kind of price they already had in mind. In each case if I quoted a higher price then I probably wouldn't have ground any stumps at all. My original plan was to stick with X amount of dollars per hour average to cover all cost and profit. Quote jobs as such and simply do not do any of them if they go below the hourly rate. When you are starting out and have nothing at all to do then it is difficult to turn down work.

Curbside pretty much stated the same conclusion that I have come to after doing only a few jobs. I am better off to work for someone else than to stay in a losing position on my own. I just about quit shortly after starting my 2nd grinding job for all the rocks. The payment for the job would go to cover wear and tear on the teeth. This customer ended up knowing some of my family so I stuck to it and finished what I had started. I don't like to keep people hanging. My 3rd and 4th jobs were located within 5 minutes of my house so I continued on hoping things would improve. I never intended to get into stump grinding with the line of thought of under cutting everyone else. I have worked too cheap in the past on other things and it is not worth it.

I'm inclined to agree with Ropensaddle that this state is full of cheapskates.

I should have clarified many cheapskates it takes much time to weed out
the selfish customers from the good I am on year five and still weeding
but the pasture is getting greener I would not consider a stump only
biz in our state you would definately not profit unless you had big contracts.

 

[kaiserkahn]

I should have clarified many cheapskates it takes much time to weed out
the selfish customers from the good I am on year five and still weeding
but the pasture is getting greener I would not consider a stump only
biz in our state you would definately not profit unless you had big contracts.

When I started out 7 years ago doing machine work I quickly realized that I could not make it while doing work for other companies. I soon came up with my own product line that was automotive related which expanded to 35-40 items over 3-4 years. All parts were similar in features which greatly helped on production. I sold to a handful of wholesalers and retailers. My largest customer quite often ordered enough parts to keep us busy for 2-3 weeks at a time. A couple times that would be 2 months of work piled on top of everybody else. Without having a few nice contracts and small orders to fill in the cracks I would have never made it as far as I had. Some customers weren't worth the time of stuffing a UPS box so I would direct them to order from one of my larger wholesalers. They didn't like that, but the small orders just didn't generate profit. Basically like grinding one stump for some cheapskate. We did a project with our largest customer. I basically lost 300 hours of prototype and machine time as the project got canceled. Also played games with their accounts payable a few times. This was 1 year ago and the sign of the end for me. Being automotive related I also predicted gas going up a good $.75 would kill my market. It sure did.