Buying an existing tree business any advice?

[jefflovstrom]

You can not sell a customer list, they are not obligated or retained,,you better think this out better,,(you are not FTA,? right,,),,
You need help, that cost money. Good luck,,,
Jeff

 

[jefflovstrom]

So out of the 55k gross, there was a 20k+ power line clearing project that you won't be able to work on because you're not certified. That would leave a 35k gross and 0 net. Which leads me back to my initial question, how good is the customer list and how good are you at sales?

You mean 'Qualified"
Jeff

 

[Uzi]

If you want your marriage to last, do not work with your wife. Trust me on this one.

Haha I know some people might call me crazy but I wouldn't even consider this without her. She can operate any equipment from skid steers to trucks including a feed truck I've got with an eaton fuller split 13 speed. She can pull trailers, load trailers, run big saws (2100, 288 30" plus bars) and work right beside me on a 10 hr. Day without missing a beat. She is truly my equal in every area aside from brute strength which is fine I don't want to look like a bodybuilder

You will need to hire a climber, there goes your $250 a day.
Jeff

If the deal goes through I will train under the certified arborist until I can get certified and until I'm am competent to handle the climbing myself. Like I said above I'm lucky enough to be in a position to learn from him without needing a paycheck from it.

So out of the 55k gross, there was a 20k+ power line clearing project that you won't be able to work on because you're not certified. That would leave a 35k gross and 0 net. Which leads me back to my initial question, how good is the customer list and how good are you at sales?

I don't know if I will become line clearance certified or not depends on the need for it in my area. We are moving the business about 75 miles from it current location if we go through with the purchase. I feel we could retain a good number of current customers that are closer to my area. I will be in an area that has little competition that is certified or insured.

I feel pretty good about my sales ability as my full time job is 2 feed stores. We call on a large number of people (250+) in a 175 mile radius and gross 350k+ per year. Hoping some of that retail knowledge will transfer over to this.

 

[no tree to big]

You mean 'Qualified"
Jeff

To bad our industry doesn't revolve around the term "qualified arborist"

 

[jefflovstrom]

To bad our industry doesn't revolve around the term "qualified arborist"

I was talking about line clearance,,
Jeff

 

[fordf150]

This is the problem with buying/selling any small business. Usually the "value"of the business is based on the owner running it. Take the owner out of the equation and your left with nothing. Not trying to butt in but you can buy the equipment way cheaper and hire a qualified climber to help and come out better than the deal your getting. Those customers you think you can retain may be loyal to the owner....not the company so don't count on retaining them plus these customers aren't like your feed store customers that You have to call on every few weeks. Tree trimming customers only call you when they need you.

Not trying to rain on anyone's parade but think long and hard before committing yourself. I know all too well how easy it is to talk yourself into something.....I just did it myself with a Dyna firewood processor that I purchased last year

 

[jefflovstrom]

I was talking about line clearance,,
Jeff

 

[jefflovstrom]

They make you take take your hat off for the pic,,,
Jeff

 

[greg storms]

My wife was a collections manager at a bank with 7 branches. She often tells me stories of customers who do well in one big venture and try to expand. Too fast, too soon actions complicate matters and oftentimes lead to bankruptcy. Think it through.... Good Luck!

 

[TheJollyLogger]

I' m just not seeing it. 90k for 30k worth of equipment, a customer list 75 miles away based on their reputation, in an industry you have 2 months experience in. If they were grossing. 55k you'd better plan on 40 at best the first year or two, especially since you don't have your certs. At 55k a year, you aren't buying a business you're buying someone's hobby. Not to mention doing business with the in-laws is a recipe for disaster.

 

[treecutterjr]

Get the 60k loan.
Spend $15k on a nice mini w/grapple.
15-20k on a nice chipper
10k-15k on chipper truck

Still have 10 -15k left over.
Hire climber when needed.
Rent stump grinder or crane when needed.
If you are just doing weekend workyou will be good.

 

[Uzi]

No good options on renting a stump grinder around here it would be about 100 miles round trip to get one.

How do I go about determining a fair value on the equipment? Everyone says it's too high but by how much? To go bucket truck, chipper, or grinder shopping means taking time from the other job and going to Des Moines, Denver or maybe Omaha. I would rather try to make a fair offer on this since I already know it's condition and maintenance history. Doesn't mean they will take it but it can't hurt to try right? Plus buying from them gives me a already certified arborist to learn from vs going buying my own stuff and winging it. He's willing to stay on training me until I'm comfortable which in my mind is worth something right?

 

[I'llbearealclimberoneday]

They make stump grinder attachments for skids. IME, they get it done. For the price of a good sized grinder, you can outfit a skid. Skids will grind stumps, pull trees over, pull fence post, demo driveways and load logs......

 

[kyle1!]

He is willing to stay on training me until I'm comfortable which in my mind is worth something right?

Your FIL wants to retire so he has placed a high $$ amount on the sale of his business in the hopes someone will take the bait. Throw out the relationship/emotions for a minute and what do the numbers tell you? Customer lists are not a guarantee of future revenue and if you priced the equipment out it maybe worth up to $20-30K. So you are going into debt for $60k on a customer list and his training??

I wonder what it would cost to hire someone to train you to become a certified arborist? $1k, $5k, 10K, 15k? I do not know what it takes but isn't it some classes/tests and you get a certificate?

If you want to be in the tree biz start off small doing weekend work, like the business you want to buy, without going into huge debt. That way if that venture fails it is easy to let go. $350k gross on a couple of feed stores....so you made $40k net

Goodluck in your decision.

 

[BC WetCoast]

View attachment 428378 View attachment 428379

It may be different here. CUA - Certified Utility Arborist

http://www.eiti.bc.ca/Certified_Utility_Arborist.html

 

[pro94lt]

Run run run... that old equipment all needs retired...

 

[KenJax Tree]

For weekend work all you need is a nice 1 ton and a chuck and duck.

 

[Tree94]

I know this is an older thread, but dam that seems like you'll be biting off more than you can chew...

Did you ever do it??

 

[Uzi]

I did get into the tree business but I didn't buy this business. I do occasionally still go out with them to learn from them. I bought my own truck in July and I'm booked up with all the work I can keep up with and then some. Got our insurance squared away and have been working every night and weekend since. I would have liked to have some of their equipment and I don't know if that will be an option in the future but the payment would have been a big one for someone only working part time. I still think it would have paid for itself but the downside I would have been providing the labor for free or next to nothing and probably for several years until things got paid down.

I really appreciate all the advice here.......I think it helped me make the right choice by starting a little smaller it might prevent me from working myself to death to make a huge payment.

Here's the truck I bought 1998 FL80 8.3 cummins 45k miles 3900 hrs 73ft work height 1500lb. material handler. Its been great so far.

 

[pro94lt]

What's the gvwr of that truck?