Starting a tree service.

Yes, remember your a "Tree service" not a "Free service"

Always err on the "too high" side.

...two things working on bids for a new Tree guy... no reputation and competing with established companies...hmmm, I have low bid high profile jobs knowing I would get noticed thus getting work in the neighborhood...Bussiness types call it a loss leader and it works

...you gotta do whatever it takes to establish and keep a good reputation...

Altissimus said:

...two things working on bids for a new Tree guy... no reputation and competing with established companies...hmmm, I have low bid high profile jobs knowing I would get noticed thus getting work in the neighborhood...Bussiness types call it a loss leader and it works

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You make a valid point, it's sometimes easy for the established guys to say "don't go too cheap" but as a starter I went cheap often just to get the work, human nature, after a bit you up the prices and the next hungry young snotter can flog their nuts off for little reward. I'd do the same again as well!

I've personally debated this many times, being cheaper to sell and having to raise prices. or charge higher an strive to show the value in my services compared to others.

Cheap will get you nowhere IMO. Turning wheels for cheap is not a way to build a business IMO. Make yourself more skilled and efficient than your competition allowing you to offer value and still be competitive and still rake it in. Not everyone is good at their job and the same holds true for treework. Be better than your competition and charge for it.

I agree with Squish. What cheap may do for you in getting started is one thing, but what it does for the trade as a whole is another. Give potential customers the idea that less is all that they should really need to pay, opens the door to individuals or companies that will provide that, but shouldn't really be in the trade due to being unqualified. Tough it out and believe, if you deserve it, the work will happen, especially in the places where many folks can afford to pay deserved fees. It takes time to build a business, like maybe three years, that is unavoidable unless you just happen to be one of the lucky ones.

Bid high. This is business, not charity. You are in it to make money. Make some. Don't be absurd on your pricing when people start simply trusting you after building a reputation. Many people ditch their tree company when that company feels they'll get the work no matter what, and throws outrageous numbers at the work.

Also, don't worry about what the next guy bid it for and all that. His finances are not yours. Bid it for YOUR needs. In simplified terms, figure out what it costs you per hour to do the work (fuel, labor, rentals, anticipated maintenance, breakdowns, short lived tools). Figure out your cost of living per hour (cost of living per month divided by average hours on the job per month), then figure out per hour the amount you need to grow your company or better your personal life. Add those three numbers together, and shoot for that. That target hourly rate will fluctuate, usually upward as time goes on. Cost of living rises, cost per hour to operate rises (higher fuel prices, increased labor costs, etc). Remembering the 3rd part of that formula is where most men fail or never get anywhere. You can get work and break even. Your help will be paid, and your bills will be paid. But there is no disposable income left to take a vacation or put money down on a truck.

In the case of a young business, the cost to operate is usually very low, so don't be bashful about tacking on profit. That's a golden time to watch cash fill your wallet. That's why weekend warriors do great. Its almost all profit.

Its a high risk profession. Risk must equal reward for you or it's not worth it.

Work your ass off and trust why you got into it in the first place. Most people don't really know how much effort they can extend until they force themselves and push their boundaries. It's beyond just the idea. Things will get easier if you tell yourself that it will in ten years, then when ten years is up, tell yourself that you need another ten.

I would rather be a tad high than nigh.....

I strive for competitive with my friendly competition.

For perspective, I used to sell a lot of firewood. We had a deal with Asplund, they would drop in our lot when in the area, and we would take what they gave us! We would sort and cut the wood, then split it, trying to make 1/3 of it hard wood and sold it for $50 a face cord. It wasn't a bad gig. Then we got into Oak, it was selling for $125 a face, decent money. It was 100 miles each way and we did good to bring back 4 face. Then I got mechanized with a mini, I could bring back 5-6 face in less time, less work. but no matter what, the first face off the trailer paid for fuel alone!
Then the economy tanked and everybody and their brother got a chainsaw for Christmas, so now we are competing with idiots selling Oak for $65-75 a face cord! I know they can't be making any money and they will be done in a year at best, but they killed my business! I had better wood, it was seasoned and split in burnable sizes, but the customers are looking at price. No way I could win that battle so I bowed out. Now, years later, I am getting calls because old customers are tired of being ripped off and can't get a hold of the people they were buying from!
So yeah, you can go low as you want to undercut everyone else, but I doubt you will last long at that rate!

Comes down to a simple fact... hard to fix or replace gear if you are just making enough for gas and beer at the end of the day.

CurSedVoyce said:

if you are just making enough for gas and beer at the end of the day.

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What else is there to pay for besides gas and beer

I sell face cords for 95 delivered and full cords 250 delivered stacking is 40 a face extra, wood is pretty easy to come by around here so people have a hard time spending the money. My prices are slightly lower, 20 bucks, but even tho firewood is in my business name it is not my primary income. I make enough to pay for the first quarters fuel bill and I am good with that maybe ten to fifteen cords a season.

sawinredneck said:

For perspective, I used to sell a lot of firewood. We had a deal with Asplund, they would drop in our lot when in the area, and we would take what they gave us! We would sort and cut the wood, then split it, trying to make 1/3 of it hard wood and sold it for $50 a face cord. It wasn't a bad gig. Then we got into Oak, it was selling for $125 a face, decent money. It was 100 miles each way and we did good to bring back 4 face. Then I got mechanized with a mini, I could bring back 5-6 face in less time, less work. but no matter what, the first face off the trailer paid for fuel alone!
Then the economy tanked and everybody and their brother got a chainsaw for Christmas, so now we are competing with idiots selling Oak for $65-75 a face cord! I know they can't be making any money and they will be done in a year at best, but they killed my business! I had better wood, it was seasoned and split in burnable sizes, but the customers are looking at price. No way I could win that battle so I bowed out. Now, years later, I am getting calls because old customers are tired of being ripped off and can't get a hold of the people they were buying from!
So yeah, you can go low as you want to undercut everyone else, but I doubt you will last long at that rate!

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Just reading your post, they killed your business and then "years later" the customers come back 'cos they cannot get hold of the guys who were apparently ripping them off, how? By selling the wood cheaper than you? Sounds like all those years they were doing ok and now are out of the game.
No ones saying that you should work at a loss but when starting out you cannot just "bid high" what if you consistently miss out on work?
Of course the established companies want newbies to bid high, so they don't undercut them.

Starting...means starting...you have to do what it takes...the bid high thing will work great later.

I assure you it is hard to reform someone you had given a deal to. That will be the expectation forever with them.

I love it when they say "Gimme a good price! I can get you a lotta work!" Yea, RIGHT.

La becasse said:

Just reading your post, they killed your business and then "years later" the customers come back 'cos they cannot get hold of the guys who were apparently ripping them off, how? By selling the wood cheaper than you? Sounds like all those years they were doing ok and now are out of the game.
No ones saying that you should work at a loss but when starting out you cannot just "bid high" what if you consistently miss out on work?
Of course the established companies want newbies to bid high, so they don't undercut them.

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Those that killed my business finally learned that they weren't making any money and weren't keeping regular customers because the wood they sold was trash and not split in burnable sizes that the customers could burn. The customers were getting ripped off, not me, so we all lost out in the end! The customers lost good wood, the guys undercutting me went broke, and I folded that part of the business up!

rskybiz said:

I assure you it is hard to reform someone you had given a deal to. That will be the expectation forever with them.

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Understood, but as the business develops you have to say goodbye to some clients and leave them to the next generation of newbs.

MasterBlaster said:

I love it when they say "Gimme a good price! I can get you a lotta work!" Yea, RIGHT.

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Yes Butch, heard that many many times. Far too long in the tooth to fall for that!

This year I lost a lot business that I had already estimated on and the customer says go ahead. Before I could get to them a roving utility line clearance company from our capital city 400 miles away named Kildonan Tree Service Ltd. steals my work by doing it super cheap while they pass through my customers neighborhood. My customers see them near their yard and ask them what they would charge and probably show them my written estimate..

It so happens that Manitoba Hydro who hires them to clear their lines are already paying these crews and then these crews are picking up my jobs as they go and pocket the sideline cash without Manitoba Hydro knowing about it.
It's hard to do business with competition like that. Good thing they only come around here to The Pas every 3-5 years.

Man that sucks Holmen, seems very unethical to say the least! One suggestion I have is to invest your time and energy going after work that is satisfying to you and makes you want to keep getting up and going to work. Every company has a niche. Find your niche and invest your energy at that niche. Keep your focus of why you do tree work in the foreground so you don't loose your center. Good luck,


jp

Sorry missed in my post that i decide i was going go for value over cheapest price.