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Principles of Estimating

by | May 21, 2019 | Business Strategy | 0 comments

Principles of Estimating

Have you ever heard the phrase…

“It’s not the job you lose that puts you out of business, it’s the job you won.”

I know you’re nodding your head in agreement. We all have taken on a job that we shouldn’t have and it cost our company dearly from a time, team morale, equipment or profit standpoint. Many times, all four of those items suffer and our company regresses.

The importance of proper job estimating in the tree care industry is undeniable. In order to become and remain successful, your company must be proficient at providing accurate estimates to win profitable jobs. When your team begins to feel confident with their estimating skills it is easier for them to walk away from a job that won’t meet your profitability numbers. I wrote an article on the power of saying no to certain jobs in November of 2018. You can read it here: The Power of Walking Away.

So what goes into job estimating? How can you get your sales team to produce profitable jobs for your company? Let’s begin by looking at the steps in the estimating process.

Steps to job estimating for the tree care industry:

Discussion with Property Owner – Obviously, everything begins with setting clear expectations with the property owner for the work that is desired. This also means specifically describing what will not be done during this job. When discussing what they want you to do, dig into the emotion of their request. Why are they asking to have those services performed? When done properly, the sales conversation changes and a relationship is born, one that usually produces additional work as well. Read one of my prior articles titled, The Most Important Question to Ask Customers for a simple way to help your sales team connect immediately with the customer.
Assign Number of Hours – Once you have a clear description of the work to be done, you can start to assign the number of work hours necessary for each task to complete the job. Make notes regarding, drive time, site/equipment set up, completing the work, and cleanup. By doing this you can show the property owner everything that goes into performing the job safely and efficiently without damaging anything. Be sure to also include notes on any special equipment necessary for the job.
Signing the Work Order – Once the property owner has chosen your company, get their signature on the work order approving the specific work to be done, the cost for each service (either in time or dollars) and the payment terms agreed upon. This agreement is vital to ensuring both parties know what to expect. As you know, many times the property owner wants to make slight changes or additions to the work once the crew is on-site, so having the initial cost and job specs outlined will help you accurately account for any additional work so you can appropriately bill for the addition.
Job Completion Analysis – Looking back at completed jobs can be difficult to do. Most companies feel they do not have the time to get each job done, much less enough time to analyze how each job went. However, if you do not take the time to look at how your jobs are performing, how do you know if your estimating practices are solid? To do this, simply have the crew foreman complete a post-job analysis that looks at each of the factors from #2 above to see how close the job estimation was to reality. These post-job forms should be brief, but must be completed at the jobsite before the crew drives away. Any jobs that have a large discrepancy on any of the factors need to be looked at further by the management team.
Lastly, if you are not using an integrated proposal building software like Arborgold, ServicePro or SingleOps, get one today. Being able to produce professional looking proposals in the field that automatically sync up with your customer database is invaluable for a tree service. While the software may come with a large price, ask any owner who has made the switch from paper proposals to one of these and you will quickly see the efficiencies that you gain make you much more profitable even with the additional software cost. The software will also help you analyze your estimating process, thereby allowing your team to continually better their proposals and win more profitable jobs.

Don’t let poor estimating practices put your business at risk for failure. Work only on jobs that will produce a positive outcome for your company and you will see your business reach its goals.

Written by: Eric Petersen

The Most Important Customer Question for Tree Services to Ask

by | Apr 16, 2019 | Business Strategy | 0 comments

The Most Important Customer Question for Tree services to Ask

Last weekend I embarked on what is an annual springtime tradition in the Upper Midwest: the initial voyage outside my house into my yard after a long, cold winter. Like almost every one of your customers, I had to pick up some fallen twigs, rake some leaves, and look around to see the condition of the yard. I know this journey prompts a lot of phone calls to your office, however, what I never thought of before was the importance of this stroll.

As I was cleaning up my yard, I realized my thoughts were on what I really wanted to do with this space. How I would love to have an in-ground pool or bigger patio with built-in barbeque pit. How the corner of my yard, which was full of buckthorn and sumac a year ago, looks so much better all cleaned up and manicured. I thought to myself; why didn’t I do that sooner. And that’s when it hit me – the one singular, most important question for tree care companies to ask their customers…

What is your vision for your yard?

It is a simple question that carries tremendously powerful results. No matter what their response is, you have an answer that is based in emotion and we all know that emotion is truly what makes a sale. Additionally, an emotion-based sale allows you to provide a customer experience that they will rave about into the future to their friends and family members.

Getting people to talk about their vision for their yard opens up conversations well beyond the reason that they called you to come out. It gives you a chance to recommend a tree replacement that fits their vision, schedule regular pruning on other trees, or begin the discussion about how a PHC program would benefit their yard. Plus, seeing someone’s face light up when they start telling you about an idea they had for their yard makes every sales call more enjoyable.

Starting with this question when you first meet with the customer, can help your conversation flow naturally to their emotions. If they wonder why you asked them that, simply talk about how proper landscape planning needs to consider the largest plant first – the trees. Without planning with trees in mind, their vision certainly will not take shape.

Transform your sales appointments with this question and I promise you, your closing ratio will increase and you will have more smiles to talk about. Isn’t that really what we all want?

For additional help with objection handling and one-on-one sales training, check out ArboRisk’s Thrive Sales & Marketing Package! Our team of industry experts has the skills and knowledge to help you take your tree care company to new heights. Click here to learn more!

Written by: Eric Petersen

Stages of Business Growth

by | Apr 2, 2019 | Business Strategy | 0 comments

Stages of Business Growth

Written by Jim Skiera

Here’s an article ArboRisk published in the past that is a good refresher for business owners year after year. It helps answer the question: Is what we are working on today going to get us to the success we want in the future? Put simply, are we on course? With the challenges experienced the past few years, you may need to set a new direction for your business if growth is your goal. Understanding the stages of business growth will help you plan for the future business you want yours to become.

Whether you’re starting up a tree care business for the first time or growing the company you have been managing for years, understanding the stages of business growth can help you focus your planning for a profitable future.

This article presents a condensed overview of the Five Stages of Small Business Growth developed by Neil C. Churchill and Virginia Lewis for an article in the 1983 Harvard Business Review. The five stages are Existence, Survival, Success, Take-off, and Resource Maturity. Not all businesses go through every stage, but depending on your level of ambition it’s a quick read that may help you recognize where you are and how to get to the next level.

Existence

At this stage the business is an idea. The owner may or may not have a business plan at this stage, but it is a recommended first step. The owner is working hard to develop a product and or service that customers want. Success at this stage is measured by the development of a customer base that generates enough revenue to offset expenses. Consistent with the term existence, the business is likely doing just that existing. It may generate enough revenue to break even. The owner is experimenting with service offerings and pricing structure that will generate a profit. It is not uncommon in this stage for a business to run at a loss for a period of time. Keeping costs under control is paramount.

Customers at this point are your greatest asset. Customers that refer you to other customers are of even greater value. If you’re able to establish a client base that begins to get you past the break even point you may move on to the next stage; survival. If not, you likely will run out of capital and need to close the doors.

Survival

In this stage you have established a service a customer is willing to pay for and an adequate customer base to generate enough revenue to offset your expenses. Going forward the challenge will be to price your services appropriately and generate enough work to earn a profit, so revenue outpaces expenses. Businesses have good times and bad times. You’ll need to begin to develop a reserve during the good times to get you through the eventual bad times. You customer base and reputation has likely grown, and you may need to hire employees to keep up with the demands of a growing customer base.

New challenges come in the form of hiring, training and keeping employees, maintaining equipment, scheduling work, making payroll and managing cash flow. Businesses that eventually advance to the success stage develop systems to manage customer expectations and profitable production as the company grows. In addition, the business will need to find more customers to continue to grow revenue. If successful in this stage, the business begins to thrive, however, this is also where many businesses stall. Typically, the owner is very good at providing the service the customers want, but may not be good at managing a growing a business. Working harder may not be increasing profits, just the amount of time spent working. Moving past this requires the owner to develop business management skills or hire people who assist as needed with financial management, operations, hiring, legal issues, taxes and accounting, risk management, insurance, etc. to get to the next level; success.

Success

In this stage the business has begun to prosper. Systems and processes are in place that guide the business and the owner has been able to delegate control to qualified and trusted employees to run most of the day to day activities. This provides time for the owner to work on refining systems and processes to optimize business growth and profitability.

At this point the owner is receiving a good income from the business. They may choose to pour profits back into the growth of the company or allow the team in place to manage the business while the owner steps away to use profits for funding new ventures. Many entrepreneurs bring businesses to the success stage and then sell to start a new company.

Take-Off

If the goal is to reinvest profits back into the company, this stage opens the door to rapid growth. The success stage has allowed you to develop systems and processes that can be replicated to expand into new markets. The company can bring on and train additional team members and resources to grow the customer base profitably. At this point it is vital that the company has a well-defined business plan guiding growth. Strategies for growth will need to be monitored and refined as the company expands. What may have worked in the earlier stages, may not during rapid growth. Epic growth can become epic fail if it is not managed properly.

Systems may need to be decentralized as processes become more complex. The growth opportunities may require the company to find new funding sources such as venture capital partners or other forms of equity investment to keep up with demand. Your small business may begin to transform into a big company.

Resource Maturity

The expansion of the take off stage cannot last forever, eventually markets become saturated. The challenge here is to stabilize the company and remain profitable as growth slows. The energy of rapid growth will need to be replaced with new drivers to keep team members inspired. Customization of processes and systems will need to yet again be refined to meet the needs of this new stage for the company.

The company may begin to look at new services and or at purchasing new businesses to increase growth and revenues through different avenues. Departments may be formed to assist with budget development and management. The company will also need to keep fine tuning processes and products to keep up with changes in the industry and customer needs. As a large company you are always at risk from smaller nibbler companies like the one you were in during the success stage. One strategy is to purchase these companies to gain access to their innovations and manage competition.

The intent of the article is to inspire you to think about your current stage of growth and begin planning for your next. Recognizing the stage your business is in will help deal with the challenges and leverage opportunities that come with growth. For more help with developing your business, contact ArboRisk for more information on their Thrive Strategic Planning Package! With this package, ArboRisk can help you identify who you are as a company today, what you want to become, and what strategic milestones will be needed to achieve your goals.

Drug Free Workplace – Is it Possible?

by | Mar 5, 2019 | Business Strategy | 0 comments

Drug Free Workplace: Is it Possible?

One in four workplace injuries arise out of drug or alcohol abuse. Operating with a drug free workplace has become a hot topic, particularly with the legalization of recreational marijuana in eleven states across the country. No matter the stance you take on the topic, the question we all want to know the answer to is “How will this impact my business?”

Depending on your company’s operations, you may be subject to different standards in regards to substance abuse. For example, if you travel across state lines, you are subject to Federal laws and regulations in which case there is a Zero Tolerance policy for drugs and alcohol. The same goes for any tree services falling under DOT regulations, as the DOT took its stance stating “Marijuana is still illegal under federal law, meaning all “safety sensitive” employees who are subject to federally-mandated drug testing are still prohibited from using the drug. This group of employees includes anyone who operates commercial vehicles, including train engineers, pilots and school bus drivers.”

When looking at the state regulations, tree care companies are in an entirely different situation. In Colorado for example, there is Amendment 64, which provides business owners with the choice to test employees and determine the consequences should those tests come back positive. Make sure to check with your state and verify its stance on the topic.

Although some states say implementing a drug free workplace is up to the employer, here are my three reasons you should have one.

Your Safety Culture – Creating a drug-free policy at work is fairly straightforward. The easiest way to approach it is making it synonymous to your alcohol policy. Just as it seems ridiculous to think of an employee operating a 23 ton grapple truck after consuming alcohol, we don’t want anyone operating while being under the influence of marijuana. In doing so, you exemplify the importance of your employees along with others who would potentially be at risk.

Insurance Availability & Discounts – We recently attended the Ohio Tree Care Conference and had the opportunity to sit in on a presentation regarding Ohio worker’s compensation. Ohio employers are eligible for up to 10% rebates on their worker’s compensation costs if they implement a drug-free safety program, the same goes for employers in Washington. Here in Wisconsin, we have seen insurance companies require a drug-free workplace program from insureds in order to renew their policies. Check with your insurance carrier to learn about possible discounts from implementing a drug-free workplace policy.

Productivity – A WCF insurance company study shows employees who have substance abuse issues are twice as likely to change employers three or more times in a year. The average cost to account for the lost productivity, new training, and risk of higher claims adds up to about $35,000 per year in expenses to the employer. Minimizing these expenses will have a direct impact on increasing your bottom line.

Employers have many resources that will assist in building a drug free workplace for example: Society for Human Resource Management (SHRM) offers a free document on their website that will serve as a good starting point. To view the site (click here: https://www.shrm.org/resourcesandtools/tools-and-samples/policies/pages/cms_019908.aspx).

Personalize your program to your business’s location and operations, and have each employee sign off stating they have read and understand the policy.

If you are unsure of what guidelines your business may be subject to, contact our office as helping implement drug and alcohol policies is part of our Thrive program. Building and believing in this policy will help increase your bottom line and most importantly ensure that you are doing everything you can to make sure each employee gets home safe at night.

Written by: Malcolm Jeffris, CTSP

Drones in Tree Care

by | Feb 21, 2019 | Business Strategy | 0 comments

Drones in Tree Care

SJust thinking about using drones in tree care gets me excited. Being able to get a bird’s eye perspective while standing safely on the ground definitely has its advantages for your company. The Federal Aviation Administration (FAA) estimates that by 2021 there will be 3.5 million unmanned aerial vehicles in the United States with 1.6 million of them being used for commercial purposes. A large percentage of those commercial drones will be used in the tree care industry. So if you’ve been thinking about using them, here are some things to consider.

Uses for Drones:

Drones can be utilized in many different ways within the tree care industry. The most common application for them will be in doing visual inspections. The operator can perform both Level 1 (fly-over) and Level 3 (aerial inspection) tree risk assessments. Flying a drone up and over the crown of a tree can help limit unnecessary or potentially dangerous climbs by identifying hazards before a rope is set.

How about using them for planning out landscape design or tree replacement plans? The US Forest Service is already using drones for overall forest health assessments. They also are being utilized for help in disaster area cleanup, where the workers on the ground cannot see beyond their immediate vantage point. The drone can give them an idea of what dangers lie ahead as they work their way through the damaged area.

Even though Jamie Hyneman was unsuccessful at retrofitting a pruning shear onto a drone in a recent episode of MythBusters, advancement of this piece of equipment will probably one day include a pruning or removal drone.

Issues to Consider:

As with any new equipment or technology, drones have limitations and issues to contend with. By no means do I want you to think these are deal breakers, but rather items that you must consider before going out to purchase a drone for use in your tree care company.

Flight Times: Currently, flight times are limited to only 15-20 minutes even less when winds higher than 15 mph. The batteries aboard drones today take a while to charge back up, so an experienced pilot must have a plan in place before the drone is turned on so they can capture as much data as possible in that small amount of time.

Regulatory: Laws for drone usage are continuing to be created however currently, there are three major regulatory issues to understand.

500 feet height limit. The FAA has limited drone flight height to minimize accidents with aircraft and lost drones. Many drones have geolocators built into them now that limit the height.
Operator must possess the following documents:
Section 333 Exemption or Aircraft Certification
Certification of Authorization (COA)
Aircraft Registration and Markings
Pilot Certificate


Cannot fly over people unless the commercial operation entails recording the people. Your COA will state the commercial application that you are authorized to use the drone for.

Liability: Drone operators are subject to a number of liability issues that you need to be aware of. These are the two main issues to focus on.

Injury or property damage to others – Whether it was from the pilot’s error or a mechanical failure, drones can cause significant damage.
Privacy – Most states recognize some sort of tort for invasion of privacy. The laws have different components concerning privacy, but generally contain one of these principles.
Public disclosure of private facts.
Intrusion – The plaintiff must demonstrate that there was an intrusion upon his or her physical solitude or seclusion and be offensive or objectionable to a reasonable person
Appropriation of name or likeness – When someone’s name or likeness is used for commercial or newsworthy purposes.
False light in the public eye or defamation of character.

Insurance: Just like technology changes the laws we abide by, it also has a great impact on the insurance coverages available. Almost every General Liability insurance policy issued today have considered drones with most of them specifically excluding coverage.

Exclusions – CG2109, CG2110 and CG2111 are all used to remove coverage for Unmanned Aerial Vehicles. The difference between these three exclusions is how much coverage is removed. From excluding everything to do with a drone to only removing coverage for just privacy concerns, your General Liability policy probably has one of these three attached.
Physical Damage Coverage – With prices ranging anywhere from $75 to $3,000 and beyond when specialized cameras are added, it is important to think about insuring the drone for the damage while flying.

Despite the concerns that I listed in this article, using drones in your tree service can be a huge differentiator for your organization and can literally take your business to new heights!

Written by: Eric Petersen

Keys to Great Company Culture

by | Feb 4, 2019 | Business Strategy | 0 comments

Keys to Great Company Culture

Google.

Zappos.

T-Mobile.

We’ve all heard about giant companies having great company culture, right? But what about your tree service? How can you create the best culture for your team that keeps your top performers engaged while still attracting new talent?

Creating the proper culture doesn’t happen overnight, however, focusing on these four key areas will help you accomplish this important aspect of your business.

Your Why – Employees want to be a part of something bigger than just work. They want their employer to stand for more than just the services they provide. So, ask yourself: why do you do what you do? Write it down and share it with everyone in your company. Ask your employees for their input and have them help define who you are. If you are struggling trying to define your why, check out an article that I wrote last year here (What is your Why?).

Delivering Happiness, a book written by Zappos’ founder Tony Hsieh, states that his company’s culture was simply based around living a life of passion and purpose. This translated into treating his employees like they were family and empowering them to be able to do whatever they could to help their customers have a great experience with their company, aka deliver happiness to their customers. I strongly recommend reading this book for ideas on how to improve your company culture.

Structure = Direction & Communication – With your “why” firmly in place, you must provide the proper direction and communication to your team so everyone knows where you are headed and how you are going to get there. This structure to your organization is vital to keep everyone on task and engaged during the grind of production season. Providing clear expectations of what you expect each employee to do is critical. Everyone wants to know what they are responsible for and how that fits into the overall success of the company.

Collaboration. Not Competition – Teamwork, teamwork, teamwork. To build a great culture, you need to have everyone working together for the common goal. Take an honest look at your company to see if you have unintentionally pitted one crew against another or have fostered a competitive environment between employees. Friendly sales competitions may work for some companies, however, the vast majority of your employees want to be successful together. Make sure to include a member of each department on your safety committee, as well as conducting strategic planning sessions so that every employee feels that they are part of the team and building something great.

Have Fun – Some owners mistake “company culture” as only about having fun at work. While enjoying what you do and the people you do it with is very important, it really is only a piece of a comprehensive company culture. Take time to plan team events to get everyone together to relax and socialize, whether it be at a cookout at 2pm on a Friday or an evening trip to a local Escape Room. Ask for input from your team to hear what they would like to do. Create a “Social Committee” and give the members a certain dollar amount to spend on fun activities each month.

Having an exciting culture is something that all employees want and will help attract quality workers to your business. Think about these four areas within your company and how you can focus on building the best culture possible.

Written by: Eric Petersen