Even when it comes to the tree care industry, numbers are important.
If you don’t see the numbers, or the impact they have on your tree care business, you could be missing growth opportunities.
Return on Marketing
Stop and ask how new clients are finding out about you. Did they come from past clients, new referrals, radio ads, yard signage, billboard adds, or social media for example?
It’s simple; whenever you get a new call always ask, “Well, how did you hear about us?” This helps you gauge your marketing efforts. You can now start to make your marketing strategies as precise as your felling cuts.
A common metric is that every ₤1 you invest in marketing should create at least ₤5 in revenue.
For example, if you invested ₤500 into marketing, your target revenue should be ₤2,500.
If this is not the case, take a look at your past client demographics. Did you receive business mainly from residents, businesses, realtors, landscape referrals, municipalities, etc.? Once you know this, you can think about how you got them and use the marketing medium that caters best to that specific group.
Next, we have to go out and close the prospective clients. This is about your closing percentage.
Take the number of jobs that you got, divided by the total number of jobs that you assessed.
For example, if you looked at 25 jobs and closed 12, then you have a 48% closing rate. This allows you to see how successful you are at selling your services.
Your sales conversion ratio can tell you a lot about your sales process.
Once you know and understand this number, you can ask better questions, especially if your results are not favorable, for instance, “Did we over-bid on these jobs”, “Did we not present our unique value proposition well enough to prospective clients.”
Understanding margin help you control profitability better. This formula is simple and all about efficiency…
Sales minus Direct Cost = Gross Profit
Your direct cost is essentially the money you have to spend to get the job done, for example, the cost of haulers, climbers, and ground personnel (the individuals who are directly providing the service).
First, set a gross profit % target. This depends on several factors: how you operate, your personnel, the amount of equipment used, and your profitability target. If you desire a 50% margin, your total direct labor costs should not exceed 50%. So, if you bid on a job for ₤2,000, then your costs should not be over ₤1,000. Your desired gross margin depends on the amount of sales and the return that the company needs, to not just stay in business, but to thrive.
Typically, gross margin should be at least 30% to ensure that the company has enough sales to cover the remaining fixed and variable costs of the business.
Second, use a simple spreadsheet to track your gross profit per job. Start with the price of the job minus the direct hauling, climbing, and ground costs. Knowing the power of margin helps you make course corrections quicker along the way.
Keep these 3 metrics in mind as you manage your tree service.
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Man has always had a direct link to the landscape, though that link, whilst it is always there, may not be in the form that it once was. Keeping with the wood pasture theme, which I am really enjoying learning about through books and journal articles, I thought we’d look at how the manner in which we approach the ecosystem has changed over the centuries (quite briefly). Of course, what is written below doesn’t stop just at wood pasture – it has cross-over to other ecosystems, where the reasons for interaction with the landscape have altered through space and, more pertinently, time.
Historically, wood pastures were managed for economic purposes. The grazing of animals on grasslands containing trees (and the feeding of the livestock with cuttings from pollarded trees, and a tree’s fruit crop), such as cattle and pigs, was for the direct benefit of communities, who relied upon the produce of the livestock (milk, meat, and so on) in order to make a living, and to generally therefore survive. Of course, the wood pastures needed to be conserved, so that they did not disappear, due to over-grazing. In this sense, they were actively conserved (by replanting dying and dead trees, and limiting grazing intensity), though largely because, without actively conserving them, the livelihood of many tens of thousands of people would be challenged. A by-product of this conservation of wood pastures, for the benefits created from grazing livestock, was that the sites were very rich in biodiversity – birds, fungi, insects, and plants, for example. The complex mosaic of niches within the wood pasture, ranging from open and disturbed soils through to the (perhaps sizeable) groves surrounded by the mantle and fringe vegetation, meant that a large number of organisms could viably frequent the site. However, for all of the biodiversity present as a result of the careful management and conservation of wood pastures throughout history, biodiversity was not the reason for management – until recently.
The shift, in Europe, probably begun when wood pasture became disliked (for hope of a better word), during the 19th-20th century (varies depending upon the country). Foresters wanted to maximise output from the trees (coppice – sometimes with standards), and farmers wanted to maximise agricultural output. Therefore, the two practices, initially married, were divorced from one another (somtimes farmers were forced to stop grazing their livestock in wood pasture!). Wood pastures were thus either cleared of trees entirely, or alowed to regenerate into forest. With this came a decline in the richness of biodiversity and, eventually, this loss of biodiversity caused a rather evident of panic amongst conservationists. Ironically, therefore, the rationale behind creating and maintaining wood pasture became largely ecologically-driven, in place of economically-driven (though, particularly in Spain and Romania, wood pastures remain, are these are generally economically viable). Regardless of reason however, the status of wood pastures essentially went full-circle.
A fantastic wood pasture in Estonia. Source: Ideas for Sustainability.
Of course, this new found love for wood pastures does not necessarily mean that they can ever exist in the manner in which they did before. First and foremost, wood pastures are extensively grazed, and thus, for operations to be self-supporting financially, they must cover large expanses of land (unless the wood pasture is maintained for subsistence purposes, or grants are provided as a means of financial support). As farmers in Europe are generally in ‘the game’ for profit (they must make a living), managing livestock in wood pastures is probably not going to be all too popular, as it’d probably signal a marked drop in profits and / or a marked increase in labour input (at least, initially). Scope does exist to harvest edible mycorrhizal mushrooms from the wood pasture, such as truffles, though this is a specialised pursuit that is far from the current farming status quo of Europe.
Furthermore, European culture has changed. Gone are the days of communities being self-sufficient, and instead many Europeans now work a job (that they may even hate) and buy their food from the supermarket (or even order it online). Therefore, is there even the desire to re-introduce wood pastures, for anything other than ecological reasons, or to supply the market with a niche animal product (such as Iberian ham from the black Iberian pig, in the holm oak dehesas of Spain). With this change in culture there has also been a change in learning priorities, and unfortunately many today seem to be fixated with knowing pointless facts about sports teams and celebrities. Functional and practical knowledge is largely gone. As a consequence, the management of wood pastures will be left to an expert few, where knowledge has either been gained academically, or via being passed-down through the generations (usually limited to rural areas where grazing still takes place). However, as more people now live in cities than in rural areas, and this trend will likely continue as rural areas are swallowed up by urban sprawl, or people move into cities for economic reasons, this tradition of passing practical knowledge on and keeping up the family tradition of extensive livestock grazing within wood pasture may very well become ever more the stuff of legend.
The black Iberian pig grazing amongst a landscape of holm oak, in a Spanish dehesa. Source: Andrew Petcher.
Society is simply in a different place than it once was. For this reason, the conservation of wood pasture is to be far from mainstream. People are certainly aware of nature (of which wood pastures feature), though more and more awareness comes from watching on the television and less from direct experience, and with this comes a discord. There is less emotional and cultural attachment to nature, and as a result, less of an impetus to associate with nature. Why help with the recreation of wood pasture when you can watch about its conservation on television, utter some lamentations, and then switch the channel and soon relegate it to a mere memory? That’s even assuming people watch such programs, in large numbers, in the first place.
This probably turned out far more dystopian than I ever intended for it to come out as, though hopefully this illustrates how social changes have led to landscape management changes, with specific focus upon wood pastures in Europe. This is obviously applicable to other landscape types as well, of course. The principle generally carries across.
Source (of inspiration): Hartel, T. & Plieninger, T. (2014) The social and ecological dimensions of wood-pastures. In Hartel, T. & Plieninger, T. (eds.) European wood-pastures in transition: A social-ecological approach. UK: Earthscan.
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We have been splitting logs lately, the timber has been lying in the yard for a couple of years and now we want to get it converted into logs to finish seasoning indoors so we have been busy with the firewood processor. Looking at the pile of logs and thinking about selling it all next winter has led me to consider the best way to market and sell our produce. Since Trading Standards and the Weights and Measures Act 1985 have little to say regarding firewood we are a bit in the dark when it comes to quantities, packaging and pricing. With most goods the law is quite clear and very strict with serious penalties for suppliers who sell goods in quantities or measures outside those prescribed in the Act. Firewood however is a bit of a mystery, I suspect that it falls under the category of solid fuel, but its hard to confirm if thats the case. However it is viewed officially it would appear that the market is wholly unregulated.
Logs are sold in a variety of ways, here are a few of the most common:
By weight; usually by the “ton” however this is almost never confirmed by any kind of weigh bridge ticket something which is likely to be illegal as far as the weights and measures act goes as one thing they are strict on is selling by weight. There is however a fundamental problem for the consumer with buying timber by the ton, this is simply that the wetter the wood the more it weighs. So there is an obvious incentive for the supplier to sell unseasoned wet wood as this will significantly ‘up’ his margin, if he bothers to weigh it at all that is! Supermarkets have been dicing with the same issue for years when it comes to meat, hanging the meat performs the same function as seasoning logs, it dries out a little and whilst the flavour may improve, and possibly the price per kilo, the lost moisture is lost profit since they bought the meat by weight in the first place. They have got around this problem by injecting the meat with “stuff” to bulk up its weight, and apparently this is ok with trading standards! This has gone on for years of course, in times gone by bakers used to be infamous for adulterating their flour with fillers such as bone meal, chalk, sawdust and even gypsum! Thankfully at the end of the 19th century laws were brought in to standardise what could be called flour, maybe its time they took a look at bacon! (all that white stuff that comes out as it fries is the supermarkets added filler).
So back to logs, selling by weight simply encourages the supplier to sell wet wood, and wet wood is not good for burning, not only does it produce little heat but because it burns at a lower temperature the combustion is incomplete, so gaseous tar and soot condense in your flue potentially leading to chimney fires. It would perhaps be ok to buy logs by weight at a known moisture content as happens in the wood chip for biomass industry, but that rarely happens.
By far the best way to buy firewood is by volume, this way you get what you pay for, they may still be wet, but 100 logs are still 100 logs wet or dry, so now the incentive is with the supplier to sell a quality product, assuming he wants to keep your business that is. So the next problem to arise is quantifying that volume, a cubic meter is a relatively common unit and should be the ideal but thats not always the case, which leads us to what is perhaps the most common way of selling logs…..
The load. So what is a load of logs? Well, anything you want it to be really, and this is where the industry really needs some guidance from the government. The load could be a bulk bag, but these vary in size from 2 cubic meters down to less than 0.5, or it could be a vehicle of some sort, trailer, pickup, 4×4 or even a car boot. From the consumers perspective how are they to compare one ‘load’ with another, does the back of one suppliers transit van compare favourably with another’s trailer? Who knows? The upshot is the poor consumer is left in the dark. With weights and measures regulations so strict on other industries, including coal and smokeless fuel, why is it that logs are still in the dark ages when it comes to consumer protection?
The answer may lie in the fact that during the industrial revolution we abandoned wood as a fuel, only to re-discover it in the last 10 years or so, and when the laws on weights and measures were made firewood just wasn’t on the radar. But these days it is most definitely back as a serious contender in the fuel market, sales of wood burning stoves have soared thanks to the carbon neutral credentials of burning wood over fossil fuels. (don’t get me started on the carbon credentials of imported eastern european logs though!)
Its time for HM Government to wake up to the burgeoning market in firewood and apply a little common sense to the way in which our logs are sold. We could do with a standardised moisture content for firewood, so that customers can expect to be able to get a certain calorific value from their wood, at least if its advertised as ‘ready to burn’ anyway. Then theres the weight / volume issue, logs really should be sold by volume, and all prices should be advertised by the cubic meter, irrespective of the size of vessel used to deliver them. This way the consumer can confidently compare prices from one supplier to the next. We have found that selling by the cubic meter we loose out to other suppliers selling by the bulk bag, our £60 per m3 has less appeal than a £50 bulk bag even though that bag may only contain 0.6 cube, making it considerably dearer, what do we do, sell unseasoned wood in order to cut our prices further, or try and skimp on the amount we sell?. Sadly the lack of regulation is currently driving quality down as firewood producers engage in a race to the bottom to stay in the game.
So if you agree with the views expressed above please share this article on Facebook with your local trading standards office, yes they all appear to have FB accounts! You could also share it with your MP. You never know we may end up with a fairer firewood market in the not to distant future.
For some further reading here’s a helpful PDF from the Forestry Commission.
Between 2016/17, 802,000 trees were planted across England, an increase from the 642,000 trees planted in 2015/16. This follows the Conservative government pledge in 2015 to plant 11 million trees by 2020.
To work safely and efficiently, coping with strenuous workloads in such busy times, you must be protected. Wearing the appropriate safety footwear is critical and can reduce the likelihood of you suffering an injury or developing a health condition whilst at work.
Injuries and Illness in 2017
The Health and Safety Executive (HSE) 2016/17 statistics show in the forestry, agriculture and fishing sector, 15,000 workers suffered from work-related illnesses with 12,000 non-fatal injuries and 27 fatal injuries. The figures reveal safety gaps in this industry, highlighting where more could be done to improve protection.
There are also pressing health issues that must be considered. The HSE statistics also show musculoskeletal (MSK) disorders were the most common work-related ill health condition to workers across the three sectors, accounting for 46% of all ill health problem, significantly higher than all other industries. Many of these cases could be linked to unsupportive footwear, lacking appropriate protection and safety features, ultimately making your working life a lot more difficult.
MSK- where are we now?
MSK disorders can develop through wearing safety footwear that is not fit for purpose and can damage joints, causing swelling of the legs. This could result in a range of problems for the feet including bunions and corns, steel spurs and even flat feet. General pain and discomfort around feet, legs, hips and lower back is also likely. If these problems develop all areas of your life could be affected. This might prevent you from working, possibly leading to a lack of earnings
Focus on footwear
Protective, durable and comfortable footwear is essential for your safety, helping to prevent injuries whilst also ensuring you don’t suffer from long term health problems because of work. HAIX is committed to developing functional footwear features for forestry professionals, meeting end user demand, continually setting new trends and exceeding standards to reduce health issues.
Every pair of boots incorporates the latest materials and footwear technology to offer comfort and protection, with cutting-edge design. Key features in our boots that will help prevent MSK injuries and improve safety generally include:
- higher quality materials for better support to the foot and lower leg
- arch support to ensure correct posture
- sturdy soles to give a strong platform for a range of surfaces
- Gore-Tex membrane keeping feet warm and dry.
- chainsaw cut protection
Busy times are ahead for the forestry industry and HAIX boots could be the key, helping to reduce incident rates and improve health statistics, ensuring continued growth in the forestry industry.
Invest in HAIX boots and protect your health as well as the success of your industry. For more information visit, https://www.haix.co.uk
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