Arboricultural Management – Part 1
Talking Business – Creating the business you want
Most people running businesses, looking back over their working life, would probably agree that things would have taken a very different path if they knew then what they know now.
They say you can’t put an old head on young shoulders, but that doesn’t mean that people starting out can’t learn a huge amount from people who have been there, seen it, done it and got the t-shirt. Surely one of the key skills in life is to learn from other people’s mistakes, rather than having to make the mistakes yourself? As someone who has learnt most of my lessons the hard way, I thought it might be useful to offer a few insights that might help anyone with an open mind, and aspirations, to build a profitable business more quickly and efficiently than I did.
Firstly, there is an absolutely huge difference between being good at your job, and being good at running a business. There are plenty of really excellent arborists around who do
a great job, but who never manage to build a sustainably profitable business. This is partly because they are unaware of the need to ‘run’ the business, and partly because we all tend to gravitate to what we enjoy – climbing trees – and avoid what we least enjoy: admin. But this policy overlooks the fact that there is a lot of satisfaction to be derived from being successful, and financially viable, particularly when you consider the alternative.
Few people, given the option, would choose not to run a successful, growing, business that could afford to invest in new equipment, be compliant and pay good rates to their employees.
Looking back over my 17 years of contracting, I realise I had a very loyal customer base, and was almost always busy, but I did not build the business beyond one, four-man team. It ran pretty smoothly, and turnover and profit grew every year without exception.
With hindsight, however, I can see that the business was far too dependent on me – I did not delegate enough and I worked too many hours. I did not market myself properly – in fact, I did not really market myself at all – and my paperwork was, in all honesty, a bit slapdash. In reality, there were things I did well, but there were too many things that I really should have paid more attention to. To sum up my business management shortcomings in one sentence, and this is fundamentally important, I spent too much time working in the business, and too little time working on it.
So what would I have done differently? The simple answer to that question is ‘quite a lot!’
Here are a few ideas, mostly very simple and cheap to do. In this series of articles, you will find a mixture of practical ideas, good business management principles and a few basic economic theories thrown in.
Write a business plan
Sit down and write down where you want your business to be in 12 weeks’ time. Then write down where you want to be in a years’ time. Then five years’ time. And then write an exit plan – in other words what do you want to be able to sell on, even if this is way into the future?
Consider why you do the job in the first place, what you want to achieve financially and how your ideal work/life balance would look. Are you an ‘empire builder’, or is one, well-organised team all that you want to run?
There are no right or wrong answers here, but the process is important. The logic behind it is simple – if you consider your working life as a journey, how will you ever make the right decisions along the way if you don’t know where you want to end up? An awful lot of businesses are, in all honesty, like a rudderless boat – they go where the wind blows them. It is clearly to your advantage to choose your direction.
You can’t run a business from up a tree
This might seem blindingly obvious to most people, and they wouldn’t normally try it, but very often tree surgeons do. Even with the modern advantages of mobile phones, tablets and other mobile devices, the boss will struggle to run an efficient business if he spends too much time in the canopy.
This is one lesson I learned a long time ago. I would come down from the tree for lunch, and my groundie would tell me that the neighbour came round to ask for a price, but they have now gone out. Bearing in mind that it is absolutely essential to have a second climber on site for rescue purposes, why not have the other climber in the tree, and the boss on the ground? At the very least this could be the default setting for routine work, with the boss keeping his hand in on the trickier jobs. If the second climber is not as fast as his boss, he will soon speed up with the increased practice he gets! This has the obvious advantage that the boss can take phone calls, and make appropriate arrangements with neighbours to look at further work (he obviously can’t leave the climber unattended).
Choose your customers
Would you rather work for an affluent customer, or one who is struggling financially? Would you rather that they can offer you the chance of repeat business, or they have one dead tree in their garden? Would you rather that they were 5 miles away, or 50 miles away?
Would you rather that they had similar neighbours who would see you working, or be miles from anywhere?
The answers to these questions are obvious, but most contractors don’t choose their customers, they let their customers choose them. So their customer base is comprised of the people who happen to hear about them, and not of the type of customer who they would like to work for.
In my opinion, the ideal domestic customer lives in an affluent suburban area, where the gardens are large enough to have plenty of trees, but not so large that their size or safety is unimportant. A huge number of people have treework that needs doing, but it needs something to trigger them to get it done. Your team working in an adjacent property could be that trigger.
I am not saying that you should turn work down if your customer does not match your ideal demographic profile, but I am saying that you should design and target your marketing so that the profile of your average customer changes in the direction that you want.
From essentialARB, Summer 2014 edition.
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