Scaling your business

[Ryan@OTT]

I realize there's only a few people reading this and most will say this questions been answered, but I've looked around and still have to ask it anyway. I've done a tone of research in the forums on what the best setups are, ideal number of employees (consensus seems to be keep it small with a three man crew), and have a good idea of what's worked for some and not for others (hiring a salesman vs becoming the salesman, etc). I'm debating on whether I'd like to stay small (me and two or three others with me doing the majority of the tree work, nice chip truck, nice chipper and stump grinder, maybe a bucket truck or spider lift next year), or try to scale the business, extricate myself completely as an arborist, become solely an owner who handles the business end, and see what happens.
I feel like keeping it small may keep life simple, and it's obviously still very profitable if you run a tight ship, but I'm so tempted to at least try to go bigger.
I'm wondering if anyone can share their personal story of a successful operation they've scaled from a small startup, and their experiences along the way, particularly with staffing. Who you hired for which positions, did you pay salary, were they part time or full time? The more info the better, hopefully this post doesn't seem to redundant for the more seasoned arboristsite users!
Thanks
Ryan

 

[northmanlogging]

Thats really on you, 1 guy can do treework, if hes dilligent, 2 makes it easy, 3 invites either drama or good work ethic and friendship, much more then that you start looking into having 2 sides going meaning more equipment and faster way more overhead way more issues with finding good people.

The best thing is start small, build until you can't handle the stress and maintain that level.

We all rise to our own level of incompetence.

 

[Rosss]

Not an arborist but I have done business consulting, coaching and have had a successful small business with national sales and 5 employees.
Looking back I learned a lot by trail and error, it would all go so much easier now.

My first question is. if you look at your life in 3,5 10 years what do you want it to look like. I am not asking about the business, but what do you want to be doing, what is important to you, what kind of life do you want to have? As much detail as possible here.

The reason I am asking this is because the most common approach for small business owners is to go with the first good ideas they have and see where that takes them and from there take what seems like a good path and see where that goes. This can work well, but it often takes people to places that are not conruent with what they really value or want. It can lead also lead to creating a life where one is serving their business, rather than the business serving their life.

Example would be wanting to see the world but having a business that only runs when the owner is working or having a demanding business and missing out on time with children and loved ones.

The more clear you can develop what you want your life to look like, then you can use that to make decisions about what you want to do with your business and the choices in the business can be made through the filter of does this take me to where I want to go?

Lots of times someone can like or love the work but when the business grows they end up doing parts of the business that they don't like or aren't good at. This can be addressed by either keeping the business in the form where they are doing what they love or staying working in what they love and hiring someone to do the things that need to get done that they don't like. If you love being up in a tree and hate paper work for example.

You could also take a look at where the pull for you comes from to grow your business.

You can take your 3,5 or 10 years picture and then reverse engineer you business and life from that so that what you design for your business will take you to that place.

There is no right or wrong in having your business bigger or smaller, just what makes for the best life for you and what you want to share with the world.

This is a bit abstract, i hope is makes sense.

I wish I had had this perspective when I was really working on my business, rather than coming to much of it after I was burned out/burning out. I would have enjoyed the time when I had employees and they didn't need me around except to make some important decisions, to be out kayaking weekdays an just checking in every couple of days and also to engineer the business so I didn't burn out.

 

[Woodcutteranon]

Not an arborist but I have done business consulting, coaching and have had a successful small business with national sales and 5 employees.
Looking back I learned a lot by trail and error, it would all go so much easier now.

My first question is. if you look at your life in 3,5 10 years what do you want it to look like. I am not asking about the business, but what do you want to be doing, what is important to you, what kind of life do you want to have? As much detail as possible here.

The reason I am asking this is because the most common approach for small business owners is to go with the first good ideas they have and see where that takes them and from there take what seems like a good path and see where that goes. This can work well, but it often takes people to places that are not conruent with what they really value or want. It can lead also lead to creating a life where one is serving their business, rather than the business serving their life.

Example would be wanting to see the world but having a business that only runs when the owner is working or having a demanding business and missing out on time with children and loved ones.

The more clear you can develop what you want your life to look like, then you can use that to make decisions about what you want to do with your business and the choices in the business can be made through the filter of does this take me to where I want to go?

Lots of times someone can like or love the work but when the business grows they end up doing parts of the business that they don't like or aren't good at. This can be addressed by either keeping the business in the form where they are doing what they love or staying working in what they love and hiring someone to do the things that need to get done that they don't like. If you love being up in a tree and hate paper work for example.

You could also take a look at where the pull for you comes from to grow your business.

You can take your 3,5 or 10 years picture and then reverse engineer you business and life from that so that what you design for your business will take you to that place.

There is no right or wrong in having your business bigger or smaller, just what makes for the best life for you and what you want to share with the world.

This is a bit abstract, i hope is makes sense.

I wish I had had this perspective when I was really working on my business, rather than coming to much of it after I was burned out/burning out. I would have enjoyed the time when I had employees and they didn't need me around except to make some important decisions, to be out kayaking weekdays an just checking in every couple of days and also to engineer the business so I didn't burn out.

Thanks for this response. This took a lot of time and thought.

 

[Ryan@OTT]

I totally agree northmanlogging, I guess I was just curious to see where others ended up, but sounds like you're implying a slow organic build, and to stop when you're sick of the stress that a bigger company adds. Thanks for the advice!
Thank you Rosss for that extremely insightful reply, I really appreciate the time taken, and it absolutely helped me answer the questions that I was playing with. The reverse engineering part of your suggestion was extremely useful! Turns out after doing what you've suggested keeping it smaller is probably the better way to go to fuel the lifestyle i'm looking for (ie.. five years have a family, have more free time for kids, wife, modest house paid off etc). After reviewing I think the stress free smaller operation after a few years of hard work and smart financial decisions sounds much better than a huge headache that I can't handle. What's nice now is that it's all written down and it kind of reminds me what I'm working towards as well... this has been an extremely helpful exercise!
I've noticed that I legitimately do enjoy being an arborist more than a business person (I love climbing trees, I am not so much a fan of paperwork, although I'm alright at it, and i do it).
I've read a lot on the site about tree company owners here that start off as arborists, grow somewhat, and then hit the "hire a salesman, or become the salesman". I find the answer is almost always that clients remember the salesman, and so the correct answer for the companies and owners sake is to become a salesman, and hire an arborist.
Personally I need to climb at least twice a week to really enjoy my season (I know I'm weird), just wondering if anyone went the opposite route, found people to handle some of the business end (quotes, scheduling, etc), and still had good financial success? Anyone find a salesman who did a good job and didn't screw them who wasn't family, so that they could stay in trees?
Sorry for the lengthy questions, I guess in the off season I have a little to much time on my hands to ponder these things ! Thank you all so much for your input so far!

 

[Deleted member 110241]

The off-season is the right time to ponder these things
I'm on the other side of the pond but I think the basics of running a business are the same everywhere, it's more about mindset than anything else.
I've run my business close to 15 years (time flies!!!) and always kept it small, I used to do precommersial thinning and had 3-4 guys so we were 2 teams going to different job sites. I came to a point where I needed to decide if I would grow or do something else, I decided to do something else and went to school and now I'm back in the woods managing/planning thinning and clearcut sites. I think you guys call that timber cruising?
Anyway, now it's just me and sometimes I miss having a second crew, it's so much easier to keep up production with two crews and you can take a bigger bite of the market. Right now I have to turn down jobs, which of course is better than having too many employees and not enough jobs but still...

So scaling or not, that is the question
With a bigger business comes more paper work, more time on the phone with clients and longer travels. But that also comes with greater satisfaction when it all runs like planned and you have crews on different sites doing a good job themselves, without you being there to tell them what to do.
Moneywise it's harder to say what's better, if everyone stays healthy and productive a bigger crew should mean more money on the bank, but a bigger crew also means more opportunities for things to go wrong, machines that break down, trees fallen over buildings etc. You never know, no one knows...

 

[Ryan@OTT]

The off-season is the right time to ponder these things
I'm on the other side of the pond but I think the basics of running a business are the same everywhere, it's more about mindset than anything else.
I've run my business close to 15 years (time flies!!!) and always kept it small, I used to do precommersial thinning and had 3-4 guys so we were 2 teams going to different job sites. I came to a point where I needed to decide if I would grow or do something else, I decided to do something else and went to school and now I'm back in the woods managing/planning thinning and clearcut sites. I think you guys call that timber cruising?
Anyway, now it's just me and sometimes I miss having a second crew, it's so much easier to keep up production with two crews and you can take a bigger bite of the market. Right now I have to turn down jobs, which of course is better than having too many employees and not enough jobs but still...

So scaling or not, that is the question
With a bigger business comes more paper work, more time on the phone with clients and longer travels. But that also comes with greater satisfaction when it all runs like planned and you have crews on different sites doing a good job themselves, without you being there to tell them what to do.
Moneywise it's harder to say what's better, if everyone stays healthy and productive a bigger crew should mean more money on the bank, but a bigger crew also means more opportunities for things to go wrong, machines that break down, trees fallen over buildings etc. You never know, no one knows...

Yeah, I'm sure it is the same on either side of the pond. Did you take something unrelated at school or something somewhat tree related? The way I'm starting to see it is that although turning down jobs kind of makes you cringe, or feel a little sick, it is better than having to many employees, too much equipment, and not enough work... It's very comfortable.
LOL I think you probably summed it up perfectly with " you never know, no one knows....". It is nice having more employees when things run smooth, feels great... but then the hassle of not knowing if things are being done right, everyone's completing the work in a safe manner... I think that's my biggest fear, is hire a few employees, get a second climber (and crew), and have someone get a log to the head from forty feet up. I really appreciate all your input, and everyone elses input, and I'm glad to hear that I'm not alone in not knowing the answer. I think I'll keep it small this year, and just run a tight ship... turning down work kind of sucks, but if you've got plenty anyway, why risk losing a good thing?