Starting up a new buisness

[gorman]

I'm currently working on starting up a tree care buisness in my home town as a licensed arborist and I was wondering if any buisness owners/arborists had some inspiring input.
Questions I have right now fall around: Do I get a small buisness loan from a bank or not? How do I market my services? How do I keep myself below the IRS radar in the beginning? Best place to get liability insurance. Equipment I should, and should not invest in right now.
All replies are appreciated.

 

[TREETX]

Stay above radar. Much easier to stay above from the start than attempt to reappear unnoticed.

Advice, read these 2 books. Each should take under an hour to take in. They are best sellers so you should be able to find them used.

Both By Ken Blanchard:

The One Minute Manager

Raving Fans

The biggest failures or struggles of start up businesses come from starting under capitalized.

 

[alanarbor]

More important than your equipment or skill is a business plan. Too many people fail as a result of poor business practice than lack of skill. Take some courses at your local community college, maybe even engage a consultant if you can afford one.

 

[John Paul Sanborn]

Get a tax accountant and pay what you have to.

Get a loan if you need it, but first ensure that you can pay it. Many capitol fincae companies will structure payments so you can pay more "in season" and less or nothing durring the lean months.

Liability can vary locally, the best thing to do is to shop indipendant agents.

Contact a few small companies that you would not be directly competing against and see if they need help from time to time. It will help flesh out your ballance sheet if your slow.

The largest chipper you can afford to start and a one-ton dump. This may be a 6 inch 35 hp chipper, but it will get the brush and you can make firewood with everything else.

If you can afford a 3/4 ton p/u too, having a support truck for tools, errands and those last few pieces of wood is noce. If an S-10 is all you can afford, it will still help out, but not critical equipment.

Sub your stumps out, upkeep on the grinder usually eats a startup alive. Bucket trucks are nice when they can be used, but need to generate revenew at least on a weekly basis to pay for themselves. IMO you should wait on that.

As soon as you can afford a fulltime climber, get one. Otherwise you're doing everything and bid-work allways suffers.

 

[Treeman14]

Questions I have right now fall around: Do I get a small buisness loan from a bank or not? How do I market my services? How do I keep myself below the IRS radar in the beginning? Best place to get liability insurance. Equipment I should, and should not invest in right now.
All replies are appreciated.

Definitely get a small business loan. You'll need a 1 or 2 acre commercial property, bucket truck, chip truck, log loader, chipper, small and large stump grinder, an assortment of chain saws, climbing and rigging gear, and PPE. You'll need worker's comp and liability insurance. A one-half to full-page ad in the local telephone directory, direct mail to middle and upper-class neighborhoods, maybe a few radio or cable TV spots.

You'll need about half a million, more if you can get it to cover operating costs until you get established. Good luck and welcome to AS. Let us know how it goes.

 

[MasterBlaster]

Your dump is just about the most important thing. Treemen gotta have a good dump.


Haha, that sounds funny.

 

[Treeman14]

Your dump is just about the most important thing. Treemen gotta have a good dump.

Ain't that the truth. At least once a day. :Eye:

 

[TimberMcPherson]

I guess I look at the game a little differently, I started small. Nissan pathfinder, big ass tipping trailer, an 020 and a 066 and my climbing kit. All up in US dollars it probably cost me about 10k with insurance and yellow pages ad included.
It meant that when times were a little tough or things didnt go right (such as an injury) I wasnt answerable to any bank and could weather it out.
You should know what your market is like, are you going to be doing more removals/pruning/large trees/small trees etc? Id Get the gear that will get the job done for the least cost, then youll know what toys you need to get bigger for when you have more clients. I know if I had brought a 9 inch chipper from the start it would have broken me, access in my city is a Biarch.

 

[treeseer]

I guess I look at the game a little differently, I started small.

Me too, and after growing big I went back to small, and life is good.
A tree CARE business is much different from a tree removal business. I've never owned a dump or a bucket (those two seem to go together somehow ), and never will. Sub out what you do rarely or what you don't want to deal with or what costs too much to start handling, i.e. stumpgrinding, loghauling, etc.

If you know enough about trees to do this, sell diagnosis and consultation instead of doing it for free as part of a free estimate. Clients won't pay for the cow when they got millk for free (and even if the milk is poison they may not know it). Connect with your university extension office to get free info on tree care, etc. that you can hand out to prospective clients. Go to www.treesaregood.com for more free info, and learn it. Connect with your ISA chapter. Knowledge is greater power than any modded chainsaw.

If you're selling tree CARE, see the trees as assets first, and liabilities second. Look for ways to increase their value to the property before you prey on fear. This more than anything will set you apart from the treecutters and incline a client toward paying more for your work when you are not the low bid.

If this is your hometown (and even if it wasn't), guard your reputation. Satisfied customers are your best sales tool, so list your references. Take the extra step to be safe; if you screw something up, that's what people will remember.

Focus on the work that you enjoy the most, no matter if other work pays better at first. If it ain't fun, why bother?

 

[Ny finest]

First know what your market can sustain and start from there.If there is a huge demand for tree work and not many people doing it(I doubt it)go ahead and get as big of a loan as you vcan get and jump in the big leagues.If your market has a bunch of guys already,but can use improvementstart small save money and grow with your clientel.Example I live in a metro area of 1mil(?) and theres over 100 tree guys in the yellow pages.I worked for a company for 5 years learning the trade and after a dispute with my employers I decided I'd be better off working for my self.So knowing I couldn't compete head on,but am known around the area as a really good climber,I subbed for companies until I could buy all my own stuff.Even though I did my own res work I did'nt compete with my contractors-They worked mostly in the richer suburbs,I stayed in the inner city.It worked out great because I didn't hane to remove debris-city picks it up.You should always have dump sites picked out before hand.Try to stay away from dupsters and landfills as you'll go broke.look for someone in the mulch manufacturing business,or someone who has a ravine they want filled.Sometimes landscapers take chips for a base under thier mulch.Just as with any other business research dilligently and dont jump in over your head. If I had to make payments every month there are times I would'nt make it.
Good Luck

 

[Ny finest]

Oh, and no employees until you can take care of them-Ie WC etc

 

[underwor]

And remember to bid fairly for both you and the customer!!! Don't try to underbid just to get work. As Lincoln said and i keep repeating: You "can't be concerned if the person down the street charges less, since he is the only one who knows the true value of his goods and services." Or something to that effect!!

 

[mikecross23]

And remember to bid fairly for both you and the customer!!! Don't try to underbid just to get work.QUOTE]

Besides, working for too cheap will just discourage you.
I dissagree with getting a small biz loan right away. You need to test the waters before diving in head first. Don't get into debt until you've established a name for yourself and your customer base is large enough to support loan payments. In the beginning you should spend a lot of $$$$ on advertising. Climb well, sub yourself out to other companies while your business picks up. You'll be fine.

-Mike-

 

[NickfromWI]

Don't start off with $500,000 debt. With that, only sheer success will keep you sane. A new business should be expected to be much less than perfect. How can you consistently make payments on a half a million dollar loan if you don't yet know if you can get through the slow season.

If you start with a huge loan and things get bad, you might have to go bankrupt, then you're basically screwed. But pay as much in cash as you can, if things get bad, you just sell everything. You will have a few thousand dollars to get started in something else.

Having/running a great business is a swell idea. But look up the stats on how many new businesses fail. Will you be any different? You might think so, but so did everyone else!

Keep your future open and don't bite off more than you can chew. Start slow and work your way up slowly. Much like climbing a tree.

love
nick

 

[Newfie]

,look up the stats on how many new businesses fail. Will you be any different? You might think so, but so did everyone else!

A few thoughts why many new businesses fail.

1) No business plan - the waters should be tested before getting wet. A good business accountant or the small business administration can show you how to make a real workable business plan. "thinking" you can make a new business work without any real research is just rolling dice.

2) Undercapitalization- most businesses start out w/ no or too little working capital. Business loans allow for equipment and operating costs while the business revenue cycle gets in to gear. Having a business plan makes this obvious. Again, a business accountant and/or the SBA are a good source of info for where and how much to borrow. You might even qualify for low interest loans from the SBA. Many succesful businesses and corporations make use of short and long term loans to meet cash flow needs. You can't make money without money. You also can't run a successful business w/o the proper equipment, a struggling one maybe.


Find out what your REAL needs are and what your options are. Seek professional advice.


Hope this helps, it was meant to.

 

[Scars2prove-it]

Do work that you will be proud of

Wear a "uniform"

Make your equipment look professional

Don't bid low

Use custom made professionally done proposal sheets (just last week a customer told me that another company bid $1000 less than me but his proposal was on a generic form from the office supply store)

If I were to start over I would bypass the one ton truck route and buy a used arbor body truck for around $15K and a used chipper for $12-15K. There are plenty of them out there. I've been running a Morbark Model 13 that I bought used for $11K. It was four years old when I got it and I've had it for five years with absolutely no problems. When I switched from a one ton to an arbor body chip truck, my business increased as well as my profits. It looked like a "big" company's truck and people were impressed. Customers like nice equipment and don't mind paying for it.

If you do what you say you're going to do and treat your customers well you will succeed in this business. Be patient though. You will have to deal with a lot of lowballers and customers that want everything done for free "while you're up there". You will also get customers that realize your value and tell all of their friends about your company.

One last thought: If you fail to plan you plan to fail.

 

[Newfie]

One last thought: If you fail to plan you plan to fail.

Exactly!