Too Much Business

[Ryan@OTT]

Hi all,
I started my tree service about 4 years ago, and have kept quality of work and customer service at an extreme high by doing everything myself (with the help of groundman of course). As a result I've landed a few lucrative contracts. I've really grown to like a lot of my clients, but unfortunately I can't charge them what I can the larger companies who care about health and safety, training, and other things that cost money (whereas a lot of residential clients just want a low price and nothing more). I find I feel a pang of guilt not being able to get to my regular clients because much pricier work is available. I'm wondering if anyone has found a way to let these people know that although you do value these people as clients... you're in business to make money? Anyone dealing with the same issues during the busy season?
Any help or input is much appreciated, I feel like my conscience is on one end of this and my bank account on the other....
Thanks
Ryan

 

[happysaws]

Hi all,
I started my tree service about 4 years ago, and have kept quality of work and customer service at an extreme high by doing everything myself (with the help of groundman of course). As a result I've landed a few lucrative contracts. I've really grown to like a lot of my clients, but unfortunately I can't charge them what I can the larger companies who care about health and safety, training, and other things that cost money (whereas a lot of residential clients just want a low price and nothing more). I find I feel a pang of guilt not being able to get to my regular clients because much pricier work is available. I'm wondering if anyone has found a way to let these people know that although you do value these people as clients... you're in business to make money? Anyone dealing with the same issues during the busy season?
Any help or input is much appreciated, I feel like my conscience is on one end of this and my bank account on the other....
Thanks
Ryan

Although I do not, nor have I ever ran any business of any sort, from what I hear of my grandfather, who ran a business, people appreciated his honesty. From a customer standpoint, if it were me wanting my tree cut but didn't understand the high price, I would be likely to hire you anyway if you explained that you want to help me but that you have insurance (safety, etc.) expenses that factor into your cost, regardless of the size of the job, so this job is x amount of dollars.

 

[Ryan@OTT]

Thanks a bunch happysaws, this was the route I had been trying to go, just hard sometimes, obviously some clients get very upset at the idea that they are not your first priority, but on the whole I think you're right (honesty being the best policy).
Cheers!
Thanks again!

 

[Deleted member 110241]

What if you make an agreement with your residential clients to do their trees during your off/low season? That way you get more jobs spread over the year and your clients gets the job done a little cheaper.
Clients pay for you to remove trees. It takes time to do it safely, the equipment is expensive and you risk your life almost daily. All this makes it expensive and you need to stay at a price level you're happy with. There's always cheaper alternatives, but IMHO being the cheapest is not the way to run a business. I don't think you'll lose clients even if you charge them more than you did in the past, as long as you do a good job and leave the job site clean and tidy.

Pricing is always difficult, we used to do the jobs cheaper for senior citizens, it just felt like the right thing to do

 

[Ryan@OTT]

That's a really good idea, and although in my mind they'd be upset at having to wait, and pay more, they probably would be fine with it (for the most part) given that I'm being honest everything. I definitely agree that being the cheapest one in town is an awful route to travel, and I pity that guy... however I do shoot to provide the best value in town.
I know what you mean with senior citizens, I find i give huge discounts to the elderly that just can't do much for themselves anymore, widowers, seniors whose husbands have dementia... one way to actually give something back and feel good!

 

[greengreer]

Sell yourself and your work, don't sell yourself short on price. There will always be someone who cuts corners and is cheap, don't even think of them as your competitors. That's a race to the bottom.
Explain to your customers that having insurance, w/c, etc costs alot of money and the risks of having some fly-by-night renegade crew working on their property.
There will always be people who care only about price. You don't want them as clients.
For the people who are getting a few bids tell them to ask the other guys if they are going to spike their prunes, do they use ppe, isa cert, etc. This will make your clients more educated consumers and they are more likely to spend more money for a better product.

 

[northmanlogging]

Find someone that us just starting out but doing good work, farm the work to them, as long as johny new kid is worth it you both win

 

[Ryan@OTT]

Thank you for the advice greengreer. I never really thought of bringing up the question of "spiking prunes", ppe. We also have a health and safety plan in effect, I don't think any other companies around here do... I do bring up the ISA Cert sometimes, but a lot of times it's like you mentioned, they do just want the lowest price and you don't really want their business at that point anyway. Very good advice, and I think the consumer education is a great thing.
Also thanks northmanlogging, are you implying this as throwing work to the new kid for free or subbing out work for the new kid? or asking for a referral fee or something?

 

[Salazar]

Hey there..
I been in biss for almost 9 years and it is hard to give a quote to some customers that are senseless and don't understand what it actually cost to run a tree biss not a guy and a truck working for beer...

 

[Ryan@OTT]

Yeah, we've actually got some companies here doing things the right way, with the right equipment, safely. Others obviously come in at 30% what I quoted, pay their employees under the table, and do garbage work. I question if this occurs more in smaller towns and cities (because people talk and cheap sells as long as no one dies), or if this happens in the bigger, more populated regions to. I think my city is around 160000 people, seems like the majority of people requesting five quotes receive one quote that I just shake my head at and wonder why someone would want to grind 8 stumps for 150 dollars lol, or do two 100+ foot removals plus cleanup for 1200.

 

[lknchoppers]

You are in business to make money first. If you are busy enough, bump everybody up to your new going rate or find people that will pay it without griping.

 

[Ryan@OTT]

Amen!

 

[blades]

Its a double edged sword. As lucrative as the big contracts are still need to service the little guy- big guys can go south in an instant with no warning. Depending on where you are financially that can hurt or even take you out of business. Cost are costs and have to be covered no matter what - tis a slippery slope to tread. Subcontracting- have to watch that real close as to work is to your standards or not, as well as any referrals not getting back to you or magically vanishing. The old bad apple in the barrel routine.
I am a one man shop. Since the last 1/4 of last year all h has broke loose and I am overloaded. That of course slows the turnaround time way down- which doesn't sit well with clientele. I am not in the tree business but do have a fair number of tree services that I service. Like just about any service business yesterday is always 2 days late.

 

[Ryan@OTT]

I know what you mean about servicing the little guy, because the big guy can just up and leave at the drop of a hat.
My thought it just keep all profit in the bank until there's a comfortable cushion and then just try to keep big guy as satisfied as possible. If they do leave, I'll have some time to readjust, out more ads out to residential clients etc.
I'm not going to just drop all of my clients, but prices will rise and so will wait times. I think the last guy in my position here tried to Service both, and ended up doing a miserable job on both ends. I'd rather do a great job for the big guy with the money, and just do my best to keep up the work for the small guys, but ones gotta be a priority....

 

[blades]

yes on the priority, I have one customer that changes out saw blades on a weekly basis , right now that keeps me hopping as they are short on blades, it also burns 2 days a week. that will be changing shortly as the are adding a 3rd set of blades. That will mean I will only have to chase cross town every other week which pretty much blows 1/2 a day by itself. The blades are carbide tipped 120 teeth, the sets have to be matched in diameter ( apx .002) as the teeth inter-mesh between the blades. It is exciting when the machine gets a hic-up. Makes a mess of the blades which then takes twice as long to repair them. At $250 ea they are not something you relegate to the frisbe pile. I do not have cnc machines- which on these does not work out well anyway as you have to reset the amount being ground off about 1/2 way through each blade otherwise the balance gets way off and because that sets up vibration they will start to tear into each other. Fun stuff.

 

[Ryan@OTT]

Sounds like a great customer to have!

 

[blades]

Yes, steady income for as long as it lasts. The last 8 years really took a toll on the weekly or by-weekly list. Lately its been a roller coaster. Couple of other guy's in the biz passed away that I used to do work for also. We would swap specialty areas.

 

[ChoppyChoppy]

$250 for that big of a blade seems really cheap.
Actually wouldn't it be cheaper to replace? 8 hrs a blade to sharpen, even at only $50/hr is $400.

 

[blades]

2-6 blades varies so i just call by worst case, interruptions -phone customers ect, usually have a couple other units running at same time to keep tabs on. 12" dia 120 tip that is about the average price. Not big diameter wise in the world of saws. largest carbide tip saw I have ever worked on was 5' in dia. don't remember the tooth count. Most of what I do ranges in size from 10" to 22" in diameter with the 24"-48" ones mixed in on occasion. Run of the mill blades are not as picky as these.

 

[Gold Coast Shipping]

Also thanks northmanlogging, are you implying this as throwing work to the new kid for free or subbing out work for the new kid? or asking for a referral fee or something?

Managing supply and demand here, isn't it? Customer requests (demand) vs. your productivity (supply). And the sector of the market that you have access to is changing at the same time. That's a lot of moving goalposts...

Can you increase your productivity to meet the demand? Even at the lower margins, it could still be worth doing if you don't have to give up the higher-margin work. Especially if the alternative is simply giving the business to your competition (and losing your time/service investment in those customers). I think we're in a similar situation here - Some equipment purchases, new hires, and restructuring this year, and I'm hoping for 20-40% increased production capacity.

If you simply can't increase productivity, then you can either accept losing that portion of your demand (wasted opportunity), or find some way to get some value from it (refer-for-fee or sub it). If the alternative is losing it entirely, you might consider carefully passing the work along to someone with excess capacity and at least get something out of it.

Some businesses are great at providing service but not so great at finding customers. It could work out really well.