How to make the transition

[psmith0803]

I've recently had a real scare at my current work and it had me scrambling trying to figure what I would do if I lost my job. The short version of the story is the threat is gone but I still do not want to be caught flat footed again. I currently have a pretty nice bucket truck (F-700 with 52' reach), that I use for my own personal use and to help very close friends. My first thought was to try and start a small tree trimming service. I've been doing research on insurance but the second biggest issue I have is I've never really been in the business and I don't have a concept of how to charge for my services. I have a fairly good understanding of working in my truck how to use ropes to get things down safely and I never do anything I don't feel 100% confident on.

I was just wondering what are the rules of thumb for estimating work. I understand once I get going I should pick it up and lean to make adjustments from there but without a background in the business I really don't have a clue where to start. My original thought was going to be to try and quote T&M type jobs on weekends till I got a better feel for it. Even with that I don't know what a fair rate for my truck would be.

To throw another twist out there, I also have a little John Deere450c track loader that I'm real good with. I could possible get a decent dump truck to move it and go down the path of excavation.

Any advice would be greatly appreciated.

 

[Goose IBEW]

You have to break down every cost aspect and get to a daily figure. Another member here made a great example: lets say you spend $50,000 on a new chipper and you expect 3,000 hours of trouble free service out of it. After that,you will sell it for an anticipated value of $12,000 and buy a new model again of which will be $60,000 when the time comes. Spend 50, recoup 12 towards the new 60. You need to make 48,000 over 3,000 hours to afford the next new one. That's $16/hr for each hour of run time that needs to be put away for a new chipper. next break down the consumables, fuel, oil, grease, belts, tires, blades and such. At the end of it all most guys want at least $65/hr to run a chipper. Same goes for the bucket truck, it has to be able to provide for itself; tires, maintenance, insurance, registration and such. Even old and paid for equipment has to generate the means to take care of itself and upgrade in the future. Your track loader, it's going to need undercarriage, pins, bushings, fluids and filters even if you have no plans to upgrade it.You can not go out and work your loader for $500/day and say you did great. $200 of that is your labor, $100 for fuel in the truck that towed it and the machine itself, now you have $200 left to cover tires on the truck and trailer, brakes, and all the other stuff that wears out. A tire on the dump will cost $300 so you can not afford to go out and have a blow out sink the day's earnings. This was a huge eye opener for me. I thank the member who put forth the chipper scenario, I will not soon forget it.

Now, lets go to personnel. How much do you want to make? $25/hr? Another ground hand to make $15/hr? So now add $65/hr for the chipper, $65/hr for the bucket, labor for an 8hr day, you're at $1360 for the day not counting liability insurance, saw maintenance, ppe allowances, wear and tear on your climbing and rigging equipment and the list goes on. Liability and workman's comp can be $6,000/yr lets say. Now lets say you work 30 Saturdays per year part time, you need $200 each Saturday to go towards insurance and workman's comp. $3,000 year for two trucks to have commercial insurance and work 30 Saturdays a year would be $12.50/hr JUST to insure the trucks you are running.

My brother has done very well for himself, he is in commercial landscape restoration and concrete restoration. He told me that he will stay at home and let the equipment sit if he can't get $1,000 to go out for an easy 6 hour job. 6 hours on the job is 10 hours of work for him. I have taken that advice and applied it to what I am doing now.

Simple math can get you a pretty good idea of what you want to make, divide the projected cost into how many hours you expect to work to come up with an hourly figure. Now you have to be able to estimate the jobs and complete them in the time you estimated, not always an easy task to accomplish, ask me how I know. I hope this is of some help and not a bunch of senseless rambling, it is getting late here.:msp_sleep:

 

[stltreedr]

Good info by Goose- nothing is free, or cheap, in this business. If you want to go completely legit, check out the FICA, FUTA, SUTA, and work comp that you will be paying...This will increase your labor cost by about 30% depending on what state you're in.