My Business Setup Opinions: SERIOUS INQUIRES PLZ

[beaver316]

OBJECTIVE:
What changes or recommendations would yall recommend with how my business is ran?
Considering how things are being ran, what advice do you guys have? Am i limiting my success/potential by sub-contracting
What would yall do differently.

MYSELF
31 married(8yr) w/ 2boys (wife is 29, gorgeous, boys are 1 & 5)
wife has great job and benefits
previous job was not bad (cleared $500/week, benefits, 401K, office job) but I always wanted to be self-employed and make it.

GENERAL BACKGROUND
I sub-contract for tree company that does $800-$1MIL sales
(2 owners are friends i've known for +10yrs.)
Both owners have been in tree business all their lives and are very experienced in all facets of tree work ( field, sales, office )

THE COMPANY
2 owners, 1 office lady, 1 additional salesman (including the owners)
They out-source all work and are pretty much a marketing co (for the exception of very large jobs/contracts)
They have 3 crews full-time and I am there priority 1 crew (get work sched. 1st b4 other crews)
We do approx. $2K in production daily. I get 55% off job (if I sell, I get additional 10%)
I cover all operating expenses, etc for my business from that %
Daily gross income ranges $200-500/day
I have an exclusive contract w/ them and work only for them. All jobs I sell on the side I can not keep to myself due to me getting 1st priority work & the 'good jobs'
I have been doing this full-time with them for 2 years.

MY COMPANY / EQUIPMENT
2008 F250
24" goose-neck trailer, 4-foot high sides & 20" long w/ additional 4" in front for equipment or whatever
All material is loaded by hand

PREDICAMENT
I am restrained to upgrade any heavy equipment (chippers, trucks, etc,) I believe due to financially
I would like to get a 1-ton truck or chipper or other heavy machinery
90% of our work is residential, so I don't need a bobcat or machinery to move material from job-site to street for loading

MY CREW
4 full-time guys (foreman, climber, 2 groundies) all have been with me from beginning and very experienced, work very well together
1 additional average climber is now working with the crew and we'll see how he does
We meet at shop @ 7:30am, get to 1st job 8-8:30am and leave last job usually 5-6:30pm

PAYROLL-DAILY
Main Climber 170
Foreman 150
2 Ground 110/each

Additional climber 125

YES THATS A #### TON OF PAYROLL FOR MY %%'S

MY GOAL
Become % partner in company
or find another source of income since the crew is self-sustaining.

END NOTE
Thanks to all of yall that have taken the time in reading this. There are surely more details that haven't been included, but I will answer.
I spent last 2 nights reading thru this website and enjoy learning how others do their work outside of 'my bubble'
I've always trolled on here, but never posted anything like this. I think (from reader's views) it will be interesting to see where this thread goes

I expect negative comments, but I respect everyone's opinion.



-Justin-

 

[beaver316]

What was the question?

Sorry, probably ended up being rambled thoughts

OBJECTIVE:
What changes or recommendations would yall recommend with how my business is ran?
Considering how things are being ran, what advice do you guys have? Am i limiting my success/potential by sub-contracting
What would yall do differently and what's my next step to make more money in your opinion.

 

[z71mike]

I have some ideas. Phone is too small to type it all. I'll get on my computer tonight when I get home.

 

[beaver316]

I have some ideas. Phone is too small to type it all. I'll get on my computer tonight when I get home.

Any criticism (good/bad) is welcomed.
A pic of the wife for good faith
View attachment 300317

 

[AU_K2500]

Sorry, probably ended up being rambled thoughts

OBJECTIVE:
What changes or recommendations would yall recommend with how my business is ran?
Considering how things are being ran, what advice do you guys have? Am i limiting my success/potential by sub-contracting
What would yall do differently and what's my next step to make more money in your opinion.

For you equipment have you considered Altec?

they have nice follow up trucks, and bucket trucks used from Altec Nueco.

I would continue to do what your doing, Improve your equipment and keep the best crew you can. your work will continue to speak for itself.

 

[beaver316]

For you equipment have you considered Altec?

they have nice follow up trucks, and bucket trucks used from Altec Nueco.

I would continue to do what your doing, Improve your equipment and keep the best crew you can. your work will continue to speak for itself.

The heavy equipment I would like to get would be chipper, 1-ton truck, small bobcat (last purchase I would make out of the 3).

I'm meeting with one of the owners Mon to discuss what I can do to get more % of job.
I feel that I should not burden myself with (financially) with 100% of these purchases.

 

[AU_K2500]

The heavy equipment I would like to get would be chipper, 1-ton truck, small bobcat (last purchase I would make out of the 3).

I'm meeting with one of the owners Mon to discuss what I can do to get more % of job.
I feel that I should not burden myself with (financially) with 100% of these purchases.

We've got some really nice chippers. Wide range of sizes, engines, and options. If you want I can send you or the owners literature.

As for 1 ton trucks, I don't know if we have any chip trucks on 1 ton frames. I will look into it on Monday.

You or the owners can feel free to contact me for any and all info you may want.

 

[beaver316]

You guys don't understand what the problem.
We're not looking to buy equipment tom. I want the company to pay me more or help pay for bigger equipment.
The company subs out work to me at 55% of job regardless of what equip. I have.
As there #1 contractor I want to buy equip. that will make the jobs go faster, more efficient, and easier on my employees backs

 

[z71mike]

You guys don't understand what the problem.
We're not looking to buy equipment tom. I want the company to pay me more or help pay for bigger equipment.
The company subs out work to me at 55% of job regardless of what equip. I have.
As there #1 contractor I want to buy equip. that will make the jobs go faster, more efficient, and easier on my employees backs

OK......I have a couple questions. I'm crunching some numbers.

To start, I know what you're going through......kinda. I've written up proposals to convince Congress to invest taxpayer dollars in us to fund improvements to equipment we deploy to theater. Talk about an impossible task. The key is 'convincing'.

My first thought, to get big-boss-man to sign on for any % of an equipment purchase, you're obviously gonna hafta convince him why he should invest and why it would be a good idea to do so. Right now, he's making 45% of $2000 per day, $900. If you had the new equipment tomorrow, what could you pull per day? An extra 25%? 50%?

Start there. With that new number, I can start moving through a spreadsheet.

(Awesome pics, btw. You're a lucky man, brother!)

 

[treecutterjr]

you buy better/bigger equipment: you want bigger cut

I don't know how much of a friend you are with the owners but strictly speaking from a business perspective, I doubt they care.

IF you get bigger/ better equipment and you become more efficient, then you profit more (in the long run).

It doesn't sound like the guys you are subbing for are interested in taking any risks or else they wouldn't be subbing out everything.

 

[z71mike]

you buy better/bigger equipment: you want bigger cut

I don't know how much of a friend you are with the owners but strictly speaking from a business perspective, I doubt they care.

IF you get bigger/ better equipment and you become more efficient, then you profit more (in the long run).

It doesn't sound like the guys you are subbing for are interested in taking any risks or else they wouldn't be subbing out everything.

Conversely, since the owners don't DO work, they focus on building the brand name. When using subs, you take a high risk that a crew may screw up and defile the name you work so hard to build. For that reason, the owners may be inclined to invest in better quality equipment that reduces the crew's risk of screwing something up.

 

[treecutterjr]

Conversely, since the owners don't DO work, they focus on building the brand name. When using subs, you take a high risk that a crew may screw up and defile the name you work so hard to build. For that reason, the owners may be inclined to invest in better quality equipment that reduces the crew's risk of screwing something up.

don't take this the wrong way, but if they are a 800k to 1M a year tree service. and have 3 different subs AND their #1 sub is a truck and trailer guy then they aren't interested in investing in more equipment because they clearly have the financial capability.

I'm not saying anything against anyone using a truck and trailer, but that is evidently their business plan.

also, if SOMETHING were to happen and they decide to part ways, then the equipment ownership would cause a problem.

Further more, I DON;T know how consistent the work they are providing is( do they keep you working every day/ all the time?) but you would probably be able to make more on your own. If you are carrying all the cost of running a tree service: payroll, fuel, insurance, tools and making it on basically HALF of a tree job. you could , in theory, go out and get the same jobs and have the same overhead and still make more money.

AND you would only need hALF THE jobs because on 5 $1000 JOBS YOU make $2500 subbing. with 2 $1000 jobs and a $500 you would make the same money.

AND I definitely wouldn't like having to cut them in on jobs you pick up on your own.

JUST my 2 cents.

 

[z71mike]

don't take this the wrong way, but if they are a 800k to 1M a year tree service. and have 3 different subs AND their #1 sub is a truck and trailer guy then they aren't interested in investing in more equipment because they clearly have the financial capability.

I'm not saying anything against anyone using a truck and trailer, but that is evidently their business plan.

also, if SOMETHING were to happen and they decide to part ways, then the equipment ownership would cause a problem.

Further more, I DON;T know how consistent the work they are providing is( do they keep you working every day/ all the time?) but you would probably be able to make more on your own. If you are carrying all the cost of running a tree service: payroll, fuel, insurance, tools and making it on basically HALF of a tree job. you could , in theory, go out and get the same jobs and have the same overhead and still make more money.

AND you would only need hALF THE jobs because on 5 $1000 JOBS YOU make $2500 subbing. with 2 $1000 jobs and a $500 you would make the same money.

AND I definitely wouldn't like having to cut them in on jobs you pick up on your own.

JUST my 2 cents.

I see what you're saying. Makes sense in all but one instance. The county I grew up in was run by 'XYZ' Tree Service (I'll keep their name anonymous). There were some smaller outfits coming in and out sometimes, but couldn't stay afloat in the tri-county area with XYZ around. Everyone used them. They had most of the municipal contracts in the area too. If this is the case here, our buddy Beaver would hafta leave the area to get any work. Hopefully that's not the case in his area.

 

[Grouchy old man]

I have an exclusive contract w/ them and work only for them. All jobs I sell on the side I can not keep to myself

I question whether you are even a subcontractor. Sounds like you and your guys would be classified as their employees according to the IRS in which case they should be paying for insurance, doing withholding and payroll and giving out W2s at the end of the year, not a 1099.

 

[z71mike]

I will respond to your input later cuz I'm driving.
Great points from everyone
Let me throw y'all a bone

I now know why you have so many kids. Good lord. I miss them Houston girls. Ten years ago, Sam's Boat was like a friggin cattle auction.

 

[B Harrison]

I am unable to remember what I was going to say after that last one.



Thinking clearly again.

Looks like $540 payroll and you say 200-500 gross, surely your not going in the hole $40+ each day. Can we asume that your netting $200-500 daily after you pay employees and for your equipment?

 

[beaver316]

I am unable to remember what I was going to say after that last one.



Thinking clearly again.

Looks like $540 payroll and you say 200-500 gross, surely your not going in the hole $40+ each day. Can we asume that your netting $200-500 daily after you pay employees and for your equipment?

$200-500 is clear money after expenses.
Biggest variable in my daily cost are fuel & dumps.

 

[beaver316]

I question whether you are even a subcontractor. Sounds like you and your guys would be classified as their employees according to the IRS in which case they should be paying for insurance, doing withholding and payroll and giving out W2s at the end of the year, not a 1099.

Technically I think you're right. That's the way it's setup. We all know (business owners) how hard it is to turn a profit with all the money that needs to be withheld for taxes

 

[beaver316]

Happy Father's Day
View attachment 300559

 

[beaver316]

you buy better/bigger equipment: you want bigger cut

I don't know how much of a friend you are with the owners but strictly speaking from a business perspective, I doubt they care.

IF you get bigger/ better equipment and you become more efficient, then you profit more (in the long run).

It doesn't sound like the guys you are subbing for are interested in taking any risks or else they wouldn't be subbing out everything.

Both owners were my groomsmen
I agree if I got equipment to work more efficiently, it would increase amount of production, but I'm still capped % wise