How to kill the overhead monster

[sgreanbeans]

Heromaker, on another thread, was talking about huge overhead, which is something I battle all the time,made me think about you guys, the elders in particular, just curious what you guys do too cut cost. I sharpen my own chains now, buy oil in bulk, when I buy a small part that puts a piece of equipment down, I usually buy multiple's with the mindset that next time I will be ready. Stuff like that

Now Jeff, im not talking about buying 20 or so 200t's at a time! Maybe 20 spark plugs!

 

[lone wolf]

Heromaker, on another thread, was talking about huge overhead, which is something I battle all the time,made me think about you guys, the elders in particular, just curious what you guys do too cut cost. I sharpen my own chains now, buy oil in bulk, when I buy a small part that puts a piece of equipment down, I usually buy multiple's with the mindset that next time I will be ready. Stuff like that

Now Jeff, im not talking about buying 20 or so 200t's at a time! Maybe 20 spark plugs!

Repair your own equipment for one. Manage time properly ,organize everything ,work fast but smart. Don't break things be care full ,don't let others break your equipment watch them closely.

 

[treeclimber101]

Nothing , it takes a lot of money to make alittle money , the overhead never goes away , for me anyway , when machines are paid off there more than halfway to the junkyard even with proper maintenance they get old , insurance is also something that never goes away , so keep hustling that is the only solution to overhead ...

 

[treesquirrel]

The only way to eliminate OH is to work for someone else and let them deal with all the OH.

Self employed = all the headaches and all the rewards, not always tipped to the good side of things.

 

[flushcut]

The only way to eliminate OH is to work for someone else and let them deal with all the OH.

Self employed = all the headaches and all the rewards, not always tipped to the good side of things.

I'll second that. The only way to lower your OH is to pay in full and we all know how hard that is. I don't think there is any real way to eliminate OH it is always there in one form or another.
P.S. I need a beer!

 

[capecodtree]

overhead

the only way that I have found to increase the bottom line/decrease overhead is a good accoutant/buisness advisor. An accountant with knowledge of agriculture and small business tax advantages is invaluable and tough to find. Mine is in FL.
I have saved tens of thousands thanks to the GW tax cuts, and I am far from a wealthy man. Labor is expensive, workmans comp. is 17$/100$, fuel is ok @$3/gal, a killer at $5plus (like two years ago). Oh the thrills of owning your own business!

 

[John Paul Sanborn]

Scott is not talking about eliminating OH, but reducing it. So saying it is impossible to eliminate is disregarding the question entire.

You first need to identify your biggest saps on profit. Are your guys invested in getting the job done? Keeping cost down? Or are they of the mind that "I get paid by the hour..."?

Do they get a bonus of sorts for zero W/C outlays per month?

Do they get bonuses for jobs completed efficiently and tools not destroyed?

Do you pay attention to fuel usage, suc as a big chipper left running full bore as they drag debris 150ft to the chipper?

Is running the truck motor more convenient the the pony motor?

How much OT is pissed away in the morning and evenings BS'ing around the shop? Some bosses count this as a perk though, things are going well, so clock milking is not frowned upon.

How are small tools abused, tossed around, or lost in a chip-pile?

The only way to real get a handle on where your money is going is by documenting the I/O's.

 

[911crash]

best way to control overhead, do your own climbing! i save at least 2k a week between salary, workers comp, damage and the "i get paid by the hour" attitude.

 

[tree md]

Number 1 would be paying cash for everything. I even paid cash for my dump and chipper. If you're not having to pay on it then you can survive the slow times when it sits.

Number two is I pay my guys a full day for 5 hours and over. If we finish the job in 5 hours they get paid the same as if we work 8. They have the same incentive as me to finish early. Time is money.

Conserve fuel whenever you can. If it is a small job bring a trailer to load out instead of the dump and chipper. I sub all of my stumps out now but back when I did them myself I would wait a week or so and do all of my stumps in one day. I would just leave $75-$100, whatever I had the stump priced at with them until I completed the stump. Also, develop dumps in your locale. I've got three dumps around town where I can dump any wood or brush (not including our city's green waste dump) and several people that will take firewood. I make notes of people who ask me for firewood and if they are in the area I am working I drop them a load.

Many things you can do to reduce overhead. The first guy I worked for and learned under was a master at keeping overhead at a minimum. He used to jokingly gripe about "all this damed overhead... gas and oil"...

 

[capetrees]

1 buy used
2 pay more monthly to get the loan done sooner
3 buy only what you need. tax write off is a myth

 

[prentice110]

You first need to identify your biggest saps on profit. Are your guys invested in getting the job done? Keeping cost down? Or are they of the mind that "I get paid by the hour..."?
Do they get bonuses for jobs completed efficiently and tools not destroyed?
Do you pay attention to fuel usage, suc as a big chipper left running full bore as they drag debris 150ft to the chipper?
How much OT is pissed away in the morning and evenings BS'ing around the shop? Some bosses count this as a perk though, things are going well, so clock milking is not frowned upon.
How are small tools abused, tossed around, or lost in a chip-pile?

The only way to real get a handle on where your money is going is by documenting the I/O's.

my thing here is the chipper running full bore . the new gig i got now, they gotta bandit 1590 that they leave goin all frickin day! unreal! if i had that machine , it might c an hour a day. these mexis will let it sit there for half an hour full bore an not put any thing throughh. how much does that kill the resale value? coulda had 2500hrs, but its got 7000. oops! sorry!

 

[treesquirrel]

my thing here is the chipper running full bore . the new gig i got now, they gotta bandit 1590 that they leave goin all frickin day! unreal! if i had that machine , it might c an hour a day. these mexis will let it sit there for half an hour full bore an not put any thing throughh. how much does that kill the resale value? coulda had 2500hrs, but its got 7000. oops! sorry!

Yep, I stage materials then start up and chip in surges. Don't run up the hours, nor eat up fuel.

 

[Blakesmaster]

Yep, I stage materials then start up and chip in surges. Don't run up the hours, nor eat up fuel.

It really depends on the job for me. The last company I worked for was very fond of letting the chipper scream non stop but we sure put out some material with that crew. I do things a bit different at my own show with staging the brush and blasting it through in a few different goes. Sometimes I wonder if the wear and tear of constantly engaging and disengaging the clutch, bringing the R's up and down, etc. is actually harder on the machine than just letting it go. The time and labor loss of handling the brush twice also needs to be taken into consideration. Easy cut n' drops with 2-3 ground guys, let it run, more technical backyard gigs with lots of lowering and a slower debris pace, probably better to let it idle every now and then. Crane work, let it run, trimming dead wood, may as well wait till the end of the day to fire it all through.

 

[beowulf343]

Do they get bonuses for jobs completed efficiently and tools not destroyed?


How are small tools abused, tossed around, or lost in a chip-pile?

This is one my boss had a problem with for many years-people just have a tendency to not care about someone else's equipment. Now i know jeff isn't going to like this, but he solved the problem by making a good chunk of his employees use their own gear. He gives each climber or foreman an "equipment" check every week to be used for saws, ropes, etc. All he supplies is the gas and bar oil and heavy equipment. Everything else on the job site belongs to me, so you better believe i take very good care of the stuff-nothing gets left behind or sitting on top of the truck. And it works out good, if my stuff gets taken good care of, i get to keep a good chunk of the check, if it isn't, it comes out of my pocket. And the boss is happy because it's cheaper for him doing it this way than having to replace equipment every week. (Of course, this is for a very big outfit, whether this would work for a ma and pop business, i don't know.)

 

[tree md]

This is one my boss had a problem with for many years-people just have a tendency to not care about someone else's equipment. Now i know jeff isn't going to like this, but he solved the problem by making a good chunk of his employees use their own gear. He gives each climber or foreman an "equipment" check every week to be used for saws, ropes, etc. All he supplies is the gas and bar oil and heavy equipment. Everything else on the job site belongs to me, so you better believe i take very good care of the stuff-nothing gets left behind or sitting on top of the truck. And it works out good, if my stuff gets taken good care of, i get to keep a good chunk of the check, if it isn't, it comes out of my pocket. And the boss is happy because it's cheaper for him doing it this way than having to replace equipment every week. (Of course, this is for a very big outfit, whether this would work for a ma and pop business, i don't know.)

If the "equipment check" was a bonus above and beyond your regular pay I would definitely go for that as an employee. Sounds like a great deal to me. Would give an up and comer a chance to acquire the gear they need.

I had a guy come down and contract for me a few years back on some storm damage. Great climber. He told me before he came that he was looking to make the money to buy a GRCS. I told him we can do that no problem. He made the money to buy it in a week, then went home for a week, bought it, learned how to use it and brought it down the following week and put it to work helping me out with more storm damage.

 

[Blakesmaster]

This is one my boss had a problem with for many years-people just have a tendency to not care about someone else's equipment. Now i know jeff isn't going to like this, but he solved the problem by making a good chunk of his employees use their own gear. He gives each climber or foreman an "equipment" check every week to be used for saws, ropes, etc. All he supplies is the gas and bar oil and heavy equipment. Everything else on the job site belongs to me, so you better believe i take very good care of the stuff-nothing gets left behind or sitting on top of the truck. And it works out good, if my stuff gets taken good care of, i get to keep a good chunk of the check, if it isn't, it comes out of my pocket. And the boss is happy because it's cheaper for him doing it this way than having to replace equipment every week. (Of course, this is for a very big outfit, whether this would work for a ma and pop business, i don't know.)

I assume your boss weeds out the losers who would purchase inferior equipment and blow the rest on coke and hookers? Your production is largely based on your equipment and his bottom line depends on it being top notch. Seems he runs a good show and that's pretty smart if he has a means to approve of, or require a certain amount of equipment.

 

[jefflovstrom]

Finding free dumpsites are a big deal here.
Jeff

 

[RedlineIt]

Often overlooked, avoiding the road tax on fuel.

Check your local regs, often chippers, bobcats, stumpers can use "farm gas". Way cheap.

Even saws that require Hi-Test can use marine fuel, 97 octane, no road tax.

I am fortunate that I live where all of these options are available without a lot of running around.

I did an analysis for one biz where the cost of installing a tank and pump, factoring fuel delivery costs showed break-even at 18 months. Your results will vary, but it is worth looking into.

RedlineIt

 

[jefflovstrom]

Try a $613.00 dump fee of palm!
Jeff

 

[ewoolsey]

i found a like new 192 T at a pawn shop for $ 200, nice back up saw , plus found bar oil on sale today for $ 6 gal.at TSC.