How much should an owner of a tree business be on per year?

[Squaredy]

14 hours ago, Clutchy said:

Indeed, and the battle to keep my company going, in my opinion, is worth £90k a year to me for 2 x teams 

 

Or ill just take £50k a year as a contract climber (if I was) or more likely, back to my office job which would pay the same (50k), if not more with way less hassle, and I haven't got the worry of a wage bill every month

 

Perhaps I'm on my own when it comes to placing a high value on the stress, extra time and capital investment etc of running my own tree business 

I suspect what you are up against is what many business owners find over the years - that having all the financial risk, stress, commitment and effort doesn't always mean earning good money.

 

I have known people who employ dozens or even hundreds of people who one day jack it all in and go freelance, or even just get a PAYE job somewhere and say they are much happier.  It is horses for courses. 

 

Running your business may be the future for you but you will have to make it happen and make the figures stack up.  And there could be times when someone working for you just doing his or her job and going home at 4pm earns more than you.  And they won't have to deal with the crap that you do.

 

Only you can make it work as you want.  Or maybe it never will work as you imagine - plans in business have to keep evolving, and sometimes head in a direction not predicted.

 

However you move forward good luck; and even if it doesn't give you what you want in the long run the experience should prove invaluable.

[Clutchy]

10 hours ago, Steven P said:

90k - if you compare yourself to pretty much all 27 year olds then you are well ahead of them, average being just a little under 25k, and the upper 10% starting at about half what you think is an OK salary for a business owner. So at that, and even at 50k you are well ahead of pretty much all your mates. Again, a 50k desk job will be double their average salaries too.

 

Internet reckons an average business owner - the founder running it day to day which sounds like you are on mid £40ks - - which will have all the stresses you do with staffing, booking jobs, potentially the overheads of an office to keep up and so on.

 

Which brings me to a small question then - to take 90k out of the business, what does the turn over have to be? That might be the answer you want. If you work hard, get a good turn over, then you might expect better rewards, the internet reckons 2% of turn over is decent, ranges from 1% to 10% which would suggest your business turn over from 900K upwards - assuming the upper 10% because the overheads might be less - need tools and vehicles but no expensive city centre offices.

 

Final thought on all of this is how much you are returning into the business - tools, training, advertising, cash for a rainy day,. and so on.

 

 

 

Last final thing, I wanted to pick you up on the freelance climbers wages, a day rate, less 4 weeks holiday, plus bank holidays, sick days, money into a pension, insurances, machines, 'company' vehicle and so on - their take home won't be near 57k less tax. That is if they can get work every other day of the year - not sure they will. Same with all contractors, the rate sounds great till you deduct everything and take account that they don't work 200 days in the year

 

 

Nice research, makes me feel happier, but I struggle with being happy with the present, which I know is a toxic mindset to have.

 

I don't think you quite need that much turn over, on £540k + VAT per year on a 2 man team it should still leave £200k ish net profit 

 

£90k for the owner £100k retained in the company. My fear is always putting it back into the business, you keep growing, but 5 years down the line it goes tits up you never actually pulled the profit out yourself 

 

The real hard part is consistency in keeping the daily earnings up, pretty easy when the works there but we burn through it so fast.

 

Point taken regarding subbies, but what's not been factored in is that as an owner you are likely earning a lot less than the subbie for a few years whilst building, which I think should later be made up. 

 

£5-60k also sounds acceptable with benefits in fairness 

[doobin]

1 hour ago, Clutchy said:

 

Nice research, makes me feel happier, but I struggle with being happy with the present, which I know is a toxic mindset to have.

 

I don't think you quite need that much turn over, on £540k + VAT per year on a 2 man team it should still leave £200k ish net profit 

 

£90k for the owner £100k retained in the company. My fear is always putting it back into the business, you keep growing, but 5 years down the line it goes tits up you never actually pulled the profit out yourself 

 

The real hard part is consistency in keeping the daily earnings up, pretty easy when the works there but we burn through it so fast.

 

Point taken regarding subbies, but what's not been factored in is that as an owner you are likely earning a lot less than the subbie for a few years whilst building, which I think should later be made up. 

 

£5-60k also sounds acceptable with benefits in fairness 

If you put it back into the business it’s there in machinery etc. not all black and white. 
 

Honestly, if you want to be wealthy, it’s less of a gamble trying to get into banking than tree work. Or there are other trades which are much more scalable if business is your forte. 
 

I doubt very many tree business owners are on 90k a year for two teams. Far too many other two team businesses are willing to do it for less. So you either need big investment in machinery, or luck/an in to the big jobs. 
 

It sounds like you are heavily reliant upon turnover. That’s not a great place to be in a recession. Plenty of businesses expand very quickly, but disappear even faster. 

Edited April 21, 2023 by doobin

[swinny]

1 hour ago, doobin said:

If you put it back into the business it’s there in machinery etc. not all black and white. 
 

Honestly, if you want to be wealthy, it’s less of a gamble trying to get into banking than tree work. Or there are other trades which are much more scalable if business is your forte. 
 

I doubt very many tree business owners are on 90k a year for two teams. Far too many other two team businesses are willing to do it for less. So you either need big investment in machinery, or luck/an in to the big jobs. 
 

It sounds like you are heavily reliant upon turnover. That’s not a great place to be in a recession. Plenty of businesses expand very quickly, but disappear even faster. 

I got to a stage where I looked at everything. I was and am usually always busy. But when you expand you need bigger yard space, more trucks, more guys and most of all more work. Then it's quality control of said work. 

 

Then I wondered just how much extra I would be earning for all that stress..... 

 

I figured in the end I was happy as I was which is a horrible thing to admit when the sky is the limit. 

 

But it's a sensible decision and I'm happy where I am. 

 

Chasing figures and having to hit constant targets just shortens your lifespan and induces un necessary stress in my mind. 

[Scott Walker]

6 minutes ago, swinny said:

I got to a stage where I looked at everything. I was and am usually always busy. But when you expand you need bigger yard space, more trucks, more guys and most of all more work. Then it's quality control of said work. 

 

Then I wondered just how much extra I would be earning for all that stress..... 

 

I figured in the end I was happy as I was which is a horrible thing to admit when the sky is the limit. 

 

But it's a sensible decision and I'm happy where I am. 

 

Chasing figures and having to hit constant targets just shortens your lifespan and induces un necessary stress in my mind. 

Completely agree with that mate.

 

I did the same and came to the same conclusion.

 

It's all about balance and quality of life has to be worth more than chasing figures, otherwise you'll never be happy especially with the economy the way it is at the moment.

[Mick Dempsey]

40 minutes ago, swinny said:

I got to a stage where I looked at everything. I was and am usually always busy. But when you expand you need bigger yard space, more trucks, more guys and most of all more work. Then it's quality control of said work. 

 

Then I wondered just how much extra I would be earning for all that stress..... 

 

I figured in the end I was happy as I was which is a horrible thing to admit when the sky is the limit. 

 

But it's a sensible decision and I'm happy where I am. 

 

Chasing figures and having to hit constant targets just shortens your lifespan and induces un necessary stress in my mind. 

All very true.

But you’re not 27, there’s a world to conquer at that age.

[swinny]

1 hour ago, Mick Dempsey said:

All very true.

But you’re not 27, there’s a world to conquer at that age.

I'm not masses older lol 😆 only In my early thirties 😉

[monkeybusiness]

What work are you doing to get £2500ish per day every day for a 2 man team out of interest? 

[doobin]

1 hour ago, swinny said:

I'm not masses older lol 😆 only In my early thirties 😉

I think it's about this time in life that you realise quality of life is important too. I can relate to the OP at that age.

[doobin]

53 minutes ago, monkeybusiness said:

What work are you doing to get £2500ish per day every day for a 2 man team out of interest? 

Indeed. Averaged out that suggests there must be a few 10k days in there!

 

I consider myself to be very much on a 'jam' job if I invoice £2.5k for two men and a digger. I usually get one of these a month and it's always down to using machinery to do what would take labour much longer, as well as buying materials by the lorry load and then invoicing them at normal rates.

 

How did you arrive at that figure? I haven't looked back at the numbers posted in the thread, but I know @Clutchyruns a pair of two man teams. £1250 per team per day is more realistic- still very high to do every day but more realistic.