tips from business owners!

[tomtrees]

I think like most marks the tree market is getting more and more competitive in real terms prices are going down and in general labour costs are going down. In the future at least in the short term wages are being forced down especially with a rise in unemployment.

 

Difficult for tree companies that on the hole dont do more than scrap a living. large companies rely on numbers of staff to make profit and small tree surgeons are often very good at their work as a tree surgeon but less good at running a company at a profit and often just about make wages.

[Matthew Storrs]

Nice post Stevie, I have been thinking about this today, whilst you obviously want to run your business in a way that works for you, you have to step back once in a while and look at wether it really is working! I don't just mean making money, are you happy, stimulated, do you get up each day looking forward to the work ahead of you?

 

However my comments on this thread are based on a fairly simple principle: however thrifty and well organised you are you can only get your overheads down so far, the cost of the kit we all buy and the consumables we all use are pretty standard across the whole country. You may only work local, and save money in all sorts of ways, but fuel is near enough £1.40 a litre wherever you are. I chose £80k as a turnover because I think after deducting an average amount of overheads that is a figure that ought to give you a reasonable profit / wage. You may do well turning 60k or you may need 90, but chances are the higher your turnover the more you will make.

 

Consider this: 2 arb teams both working in the same radius using a transit and 6" chipper, both pay the same wages and have similar overheads. Team A charges 350 a day for 200 days and turns £70k, team b charges 400 a day for 200 days and turns £80k. Given that their costs are the same team B has made a whole £10k more by just charging an extra £50 each day. In reality we will all have different overheads, (mine are £1800ish a week BTW) however adding a small amount to your turnover without increasing your overheads too much is the way to make money. So those who say turnover is vanity, think again, if someone else with similar kit and staff numbers like yours turns more, he probably makes more too.

 

 

One final tip. Don't work on a day rate. I hear you saying " I never do, I always price each job individually" thats fine but I used to find that I would look at a job and say " thats about a day" and stick what was effectively a day rate on it. Or a half day, or two days, I reckon we all tend to do this ( look at your invoices over the years, are they all different amounts? or lots of multiples of the same figure... your day rate:sneaky2:...) and there's nothing wrong with pricing that way, but what happens when you get one thats a bit more than a day but not 2 or 3/4 of a day? The best way to work is to have a rigid weekly target that you aim to hit every week, forget about having a day rate, and price each job as it looks, considering your competitors and what you think they will want for the job. This way you may find a job where for example you know it suits your setup perfectly and the the competition may struggle a little, think what they will charge and aim to beat that, it doesn't matter if you can do it in 2 hours because of your crane / climbing groundy / mini loader or whatever your "edge" is. You charge what you need to just beat the competition and no less. This means that on that day you made extra, more than your "day rate", you can now afford to go cheap the next day in order to win a job you know will be up against cheap competition. So long as you make your weekly target it doesn't matter if you do one job for £150 so long as you got in a £750 or whatever.

 

Set your self a challenging but achievable weekly target and go for it for 6 months, see what happens. My business has really taken off since I started doing this. Give it a try.

 

Is it really possible to quote a job as a job, rather than how long it will take you? surely when you look at a job instantly you would need to think how long it will take you and thus how much you need to charge in order to reach your daily target.

Whenever I look at a job i would find it impossible to quote without thinking how long it will take and in a way how many 'days' I need to put on it to cover myself.

[skyhuck]

Is it really possible to quote a job as a job, rather than how long it will take you? surely when you look at a job instantly you would need to think how long it will take you and thus how much you need to charge in order to reach your daily target.

Whenever I look at a job i would find it impossible to quote without thinking how long it will take and in a way how many 'days' I need to put on it to cover myself.

 

It depends a lot on your equipment, if you have a large chipper and Hiab crane you can often do jobs much quicker than your competition.

 

A trunk 12' long and 4' thick will take me 15minuets to load onto my trailer, that same trunk would take half a day with two men,saws and a transit.

 

So I don't base my price on how long it will take me, but how long it will take my competitor

[Stephen Blair]

Is it really possible to quote a job as a job, rather than how long it will take you? surely when you look at a job instantly you would need to think how long it will take you and thus how much you need to charge in order to reach your daily target.

Whenever I look at a job i would find it impossible to quote without thinking how long it will take and in a way how many 'days' I need to put on it to cover myself.

 

When you have been doing things long enough then yes.

 

I was always getting grief at school in Maths because I never did any workings for a lot of stuff, I just knew the answers:biggrin:

 

Then they started giving marks for workings, even if the answer was wrong:confused1:

But in the real world, there is no reward for mistakes.

 

I have done thousands of trees, and after a while they just fall into a category I suppose.

I will also know if I am passing with a half full load with the Valmet, so some jobs I can easily be £300 less than others, for 3-4 lifts with the crane.

Or other days I can match the competition and make that £300 profit.

[Leyburn Lad]

Thought i would start a thread regarding the business side of tree work.

 

Any tips from Business owners.? Anything from Marketing, accounts, quotes and of course growing a successfull business, lesson learnt etc.

 

I'll start from obvious ones - Do everything is writing, makes quotes detailed and have terms and conditions on your quotes. ..even the nicest client can turn sour and if your quote doesn't state exactly what needs done they will try to get more work done.

 

Eggs! Baskets! Not all in the same, lesson just learned.

[Tom D]

It depends a lot on your equipment, if you have a large chipper and Hiab crane you can often do jobs much quicker than your competition.

 

A trunk 12' long and 4' thick will take me 15minuets to load onto my trailer, that same trunk would take half a day with two men,saws and a transit.

 

So I don't base my price on how long it will take me, but how long it will take my competitor

 

That was my point, You just made it better Dave:001_smile:

[Matthew Storrs]

It depends a lot on your equipment, if you have a large chipper and Hiab crane you can often do jobs much quicker than your competition.

 

A trunk 12' long and 4' thick will take me 15minuets to load onto my trailer, that same trunk would take half a day with two men,saws and a transit.

 

So I don't base my price on how long it will take me, but how long it will take my competitor

 

Interesting point, but on many jobs your setup may be no quicker then tranny andchipper one, yet your rig/outlay will be costlier to run, you wouldn't/couldn't charge what your competitor charges then. I guess it all comes down to having the most efficient kit for whatever majority of your work is.

[Tom D]

I think you end up getting work that suits your kit / skills rather than the other way round. Dave will maybe loose out on some jobs where his kit gives no advantage but win a higher proportion of those where it does. Maybe thats the best tip of all: give yourself an edge, that will allow you to do some jobs cheaper than most others.

 

It doesn't have to be kit either, it could be having 2 climbers as your 2 man team. Get a job with 6 or 7 trees to climb and you could still do it in a day where as a one climber setup would struggle.

 

It could be having all the tickets under the sun and going for jobs where the clients insist on loads of H&S.

 

I know that I found when I bought the alpine tractor a few years ago I suddenly started getting jobs where there was a lot of timber, or winching jobs.

 

Today we felled 3 50' sycs and an 50' ash, we took the big tractor and the wee one and the van and chipper, the van and the trailer on the valtra were brim full by 3.00 so that was our day. A few years ago that job would have taken us 4 days minimum..... But now I find we don't win many hedge jobs anymore as we are too dear.

 

Its horses for courses. Even having a tracked barrow would give you a wee edge over someone who hasn't.

[Tom D]

Interesting point, but on many jobs your setup may be no quicker then tranny andchipper one, yet your rig/outlay will be costlier to run, you wouldn't/couldn't charge what your competitor charges then. I guess it all comes down to having the most efficient kit for whatever majority of your work is.

 

Thats my point about a weekly target, Dave does a big dismantle on Monday for £900, say his target is 2250 PW, he does a £500 job on tues and another on wed, he can then afford to work for only £350 on thurs and he has hit his target. So he can still work cheap if he needs to so long as he gets some jobs that suit his mog. Mondays job that would have taken others 2 days he has done in 1 allowing him to work thursday "at a loss". He could go and work friday for £150 if he likes, its all profit as he has made his target for the week. or he could stay at home and put his feet up.

 

I find working this way liberating, and it keeps you on course to make a decent profit at the end of the year.

[Matthew Storrs]

I think you end up getting work that suits your kit / skills rather than the other way round. Dave will maybe loose out on some jobs where his kit gives no advantage but win a higher proportion of those where it does. Maybe thats the best tip of all: give yourself an edge, that will allow you to do some jobs cheaper than most others.

 

It doesn't have to be kit either, it could be having 2 climbers as your 2 man team. Get a job with 6 or 7 trees to climb and you could still do it in a day where as a one climber setup would struggle.

 

It could be having all the tickets under the sun and going for jobs where the clients insist on loads of H&S.

 

I know that I found when I bought the alpine tractor a few years ago I suddenly started getting jobs where there was a lot of timber, or winching jobs.

 

Today we felled 3 50' sycs and an 50' ash, we took the big tractor and the wee one and the van and chipper, the van and the trailer on the valtra were brim full by 3.00 so that was our day. A few years ago that job would have taken us 4 days minimum..... But now I find we don't win many hedge jobs anymore as we are too dear.

 

Its horses for courses. Even having a tracked barrow would give you a wee edge over someone who hasn't.

 

Thats never a bad thing:biggrin: Your totally right tho, A local team to me has 4 staff whereas I only have subbies, He runs his company on manpower I run mine on machinery. Even though he has bigger overheads and is VAT registered, he can beat me on some jobs simply because he can do in a day with 4 blokes what takes me 2 days with 2 of us, even tho Im probably cheaper, But he runs a very standard setup compared to me and thus on the whole I reckon i have the edge over him on many (usually rural) jobs with my tracked chipper/minidigger & grab combo. AL about having the right tool/setup for the job