Business expansion.

[Benarb]

On 03/03/2021 at 22:59, Clutchy said:

The first question has to be, are you consistently averaging a very profitable daily figure for your current gang/set up. If you're averaging say £1k + VAT per day, can you increase that to £1.5k + VAT by losing more quotes and winning fewer but much more profitable jobs?

 

If the answer is 100% no, we simply cannot make more a day than what we currently do then I suppose the choice is, stress or more money! 

 

I thought £1.5k a day was the max, this year is to try and consistently hit £2k + VAT per day for a 3/4 man gang and then and only then will we consider expanding to another gang.

 

That extra £3-400 profit a day can go directly into your pocket, having another gang is unlikely to be as directly profitable without being a lot more effort/time consuming. 

 

Honestly this business/industry really doesn't feel like something that will ever make you very well off without being Gristwood and Toms size! We treat our tree company as a good way to generate profit say 10-15k a month which we then set aside for other ventures.

 

The stress to financial reward ratio in tree work really doesn't feel worth it IMO.

If you're averaging 1.5k plus VAT a day i'm assuming that the majority of those days you're trying to cram several jobs in a day and not just pricing a days work at 1.5 plus vat on a 1 day job?

[Clutchy]

7 minutes ago, Benarb said:

If you're averaging 1.5k plus VAT a day i'm assuming that the majority of those days you're trying to cram several jobs in a day and not just pricing a days work at 1.5 plus vat on a 1 day job?

We never price work as a day rate, only by tree with the knowledge that ultimately we need to average 1.5k a day

 

Most of these jobs will last a few days at least but sometimes if something is only going to take us till 11am we might have 900 on it and then go to a second smaller job for 4-600 

 

Pricing per tree was a massive turning point for us, because risk and ease is a massive determining factor in our price per tree not just time. We have a £420 minimum aswell. Which helps filter customers out on the phone. 

[hamilton32]

i didnt read the whole thread but wouldn't 4 employees be ideal for you? You could subby 2 guys in when needed or just regularly a couple of days a week to begin with and book more days in if it goes well.

Maybe get one good freelance climber and if your other TL is climbing on the other team then just a decent groundy would do?

 4 is actually really efficient. obviously with 4 you can have 2 up 2 down which is really good on big reductions or on jobs with lots of different things to do..

i worked for a company that did this when i started freelance climbing. it worked very well. when work went quiet in spring he just booked fewer days with me and the other guy without the pressure of needing more work for his employees. 

 

[Hodge]

Have you tried a 230 with sharp rollers? If you're chipping straight stuff it's just the hp and so maybe not a huge difference but give it something gnarly and the 230 gobbles up stuff you'd have to dress and fiddle about with to get the 150 to take.

Huge difference to throughput, I think if you go with a four man team anywhere then a 150 could easily become a bottleneck whereas a 230 won't.

There is no comparing the efficiency of a 150 and a 230, you would get more stuff chipped up in a quicker time with out having to dress branches out etc.....I speak from experience.

[Hodge]

There will be problems when you start to run a second gang and you are sure you want the hassle? I'm my experience you are better having 1 gang earning good money rather than the hassle of 2. Going back to sort out the bits they missed/didn't do to the job spec or customers adding bits in here and there. Breakdowns, being let down if a staff member is off. You are far better streamlining the operation you have to give the best returns. You need to include profit into jobs not just wages and running costs. This is vital.

[Will C]

1 team or 5 plus. the 2 to 4 teams is just a pain in the arse, you have to get big enough to just be a paper shuffler/man manager/ social worker/ to get more reward from growing. 
we tried 2 it look far more time, stress and agro for no more reward.

[Chipperclown]

My advice, stay small, stay busy, stay professional and enjoy nice equipment and no real hassles.

[JLA1990]

The question is do you have someone you trust to head up the second team? If yes then as some of the other chaps have said subby in the rest of the team to start with and when you have repeat work/clients look to employ full time. If you’re looking to hire in the team leader/supervisor unfortunately in the current market id forget it. 

[Dan Maynard]

@Benarb as you started the thread over a year ago, what did you do in the end?

[doobin]

Machinery for me has been far more profitable than extra staff, with much, much less hassle.