Would you guys take this trade

[Crazy Canuck]

The town I live in bought a vermeer 6" chipper 5 years ago. I need a chipper but its not in the budget right now. I may have the opportunity to trade them work for their chipper, but its a lot of work. They want me to prune all the trees in the parks and boulevard trees. I figure this would take me about 240 hours, but I would be able do it over the next 2 years. They want a chip pile for residents that I would have to stock pile free of charge (read I have a free place to dispose of chips that I don't sell) and they would want to be able to rent the machine from me when they need it.

The chipper has been used only 4 or 5 times and has less than 20 hours on it. I know its a lot of work, but honestly I have the time. It would also give me a lot of exposure here in town, I'm sure I would pick up quite a bit of work from home owners while pruning boulevard trees in front of their house. I don't have a lot of money right now but I do have the time. What would you do??????

 

[chipper]

I trade work here and there. It sounds like that is a lot of work. I would only aggree to something like that if I had some other income to keep the bills paid. I think I would do it. Like you said, it would give you a chance to advertise a bit and get yourself known in your area.

 

[chipper]

I also try to do as much work as possible in well known areas just to be seen. I have gotten many jobs just from exposure. Go for it. The pay off is sweet.

 

[begleytree]

Well, it seems you told us all the up-sides. What about the downsides?

I probably wouldn't do it.
Here's why:

@240 hours work
at my rate for crew, =@30,000 I'd rather have the $30,000. I can buy a chipper for less than that.
Money isn't comming in, but you still have payroll, taxes, W/C, insurance, fuel, and maintence. How do you take it off your taxes?
To me, ballpark guesstimation, thats what? $40,000 for a 6" chipper? Maybe someone, but not me. I guess you can play with the rates, and make it look better, but what could you be making somewhere else, while you're doing the city work?
What about them renting? Sounds good, but not if they have the right to pick it up whenever, like during a preplanned busy day. You know the rep for slow city workers, they need your chipper for an hour or two, but you don't see it again till tomorrow. Sure, you made rental, but look what you lost on the days job. Or you end up running over with a crew for rental price, just to get to use 'your' chipper.

This is assuming you don't have a chipper already, of course. I doubt anyone would jump that offer for a second unit.

When do you get the title/bill of sale/cert. of origin? How much hounding on you about doing their 'free' work will be done. Are they 'buying' them selves a free tree service for 2 years? Chip quality at this 'free dump'? What if you run out, dump some extra, and demand dries up, then they don't want that much left there? Who moves the 'excess'?

My questioning is: If it's not in the budget to go purchase it, how can it be in the budget to trade for it? It still costs you the money either way. You want free advertising, park your truck on the side of the street or something. You get what you pay for in advertising.

Offering another point of view, and saying if you do, get everything in writing, and still tread carefully. Hope it gave you something to think about.
-Ralph

 

[treeman82]

I would suggest not doing it. If your rate was $100 / man hour you are talking about $24,000 of work for a 5 year old chipper. If your rate is $60 / man hour you are talking about $14,400. You are better off pocketing the money and then using it to buy the chipper that YOU want, not what they are offering to you.

 

[murphy4trees]

have you used the chipper... or even any chipper like it...
Also you might try to bargain with them and make it clear that pruning is not necessarily beneficial to all trees... Tell them you'll evaluate all trees and prune them up to x man hours... remember with pruning less is usually better... handsaw not chainsaw etc... Sounds like there is some room for bargaining... how many trees? x how much (time /$) per tree=?
Value of used chipper=?
who is going to determine how the trees are to be pruned?
I'd work the deal if you need the chipper... but you might be better of financinga 12" chipper that has a ballsy diesel. The 6" chipper isn't really a good tool for commercial tree work too small..

 

[Lumberjack]

I might would do it after you explain the hours thing, the details of what they call trimming, and a couple other things.

Why I would do it?
Free place top dump chip (big plus)
The city might rent the chipper (help pay some exspenses of opperating it)
And you can work off the hours over 2 years, thats alot of chips you can dump off on the city.

 

[Tom Dunlap]

Your accountant will be able to walk you through this in fine fashion. Use the considerations that people wrote about in the thread and get out a sharp pencil.

 

[WMTP]

But from my expirience with city crews and chippers when they rent it from you and you get it back you will usually be changing the blades cause they dont care what they run through that thing.

 

[RedlineIt]

Canuck,

I will leave the business end of this deal to stronger minds than mine.

I agree that the exposure doing boulevard trees will be great for a new company, especially if you're looking professional and doing quality work. I have worked for a municipality trimming street trees and the number of "side-jobs" that came out of it was more than our crews could handle.

But I've got to strongly side with WMPT on the rent-back clause of this deal. Its a breaker. Our city's forestry department had a back-up chipper, a Bandit 250 that was available to the parks department gardeners. If it works the same in your town, the parkies strategy was just to build an enormous pile of anything semi-woody and then borrow our chipper and run it through.

Root balls and all, in it went! Tree plantings that didn't take, complete with tree collar support wires dangling, in it went! They had the chipper for eight hours, then it's someone else's (read, your) problem. What did they care, just get rid of it all.

Like I said, for me it would be a deal-breaker. Maybe you can rework this clause so that your best groundsman is in charge of the machine on rent-back days.

 

[tinman44]

yeah i would do it but i would change the deal, no using my chipper without me and my hourly rates. also i would tell them they want too many man hours for a trade. that sounds like first offer, make them offer a better deal or walk away they will probably call you back, if not no big loss, like others have said thats a tiny chipper for all those man hours.

disclaimer: i do not own a chipper, if i had the chance for a 12'' or larger i would go for it but 6''? no thanks

 

[DDM]

Is this a Vermeer 625? Is this there only chipper?

 

[Stumper]

Crazy, Lots of good points have been raised. I see the appeal but the deal needs to be better. I think I would counter with something like -take possession of chipper immediately, Title to be transferred after completion of 1/3 of the proposed work. Rent back conditioned upon rental with you or designated operator of your choosing and only with x days notice to allow scheduling. After completion of the first third and title transfer you will complete the remaining 160 hrs work at x per hour (a reduced rate so that they get a good deal but you make wages). I'm guessing that you live in a small town for this offer to even occur. I think being polite and appreciative of the offer is appropriate but they need to understand that their offer is for you do three-five times the actual value of the chipper in labor. Some mutual backscratching is in order when you get goods without having cash but you'll need a little itch relief yourself before the labor is done.