“There are always lessons in business,” says Niko, “it takes time to up-skill yourself in any new business and it won’t happen overnight.”
Niko Kurta is well-versed in the realities of work within the tree industry. He has been running Jim’s Tree & Stump Removal since 2012 and in that time he has helped the franchise to generate over 100,000 new leads.
Running a tree business is not like running a retail business. You don’t need to think about leasing a shop, negotiating your lease renewal, stocking your shop, dealing with rent increases or property equity.
Instead, you need to think about whether to buy an existing business or start one from the ground up. You have to learn how to bring in new clients, which clients to keep and how far you’re willing to travel for them. You’ve got to be aware of different rules within different council areas and the challenges unique to those locations. Then there’s the equipment you use and the staff you employ. In this article we discover exactly what it takes to run a successful tree business.
“ Business is so much easier if it has good will ” – Getting Started
One of the very first decisions you will have to make when starting out is whether you create your own business or buy an existing one. The advantage of buying into an existing business is that you start with a platform to grow your business from. This is a result of the good will that comes from a mature brand with a good client list.
Starting out on your own gives you freedom to make all of the early business decisions yourself. This is generally a more difficult path as you have to attempt to grow your business without brand recognition or a client base.
“I tinkered with the idea of getting into the Tree Industry for a while,” says Niko, “I recognised that it could be very lucrative but felt that a brand and business system have great value… Business is so much easier if it has good will.”
When buying into a franchise like Jim’s Trees, you have this same choice but with a stronger platform. You can buy a new franchise, giving you the opportunity to start your own business with the benefits of the Jim’s brand to give you public awareness and the Jim’s network for support.
Alternatively, you can buy an existing franchise, which allows you to take on their client list. Generally the longer the business has been around, the better the quality of the clientele and the good will of the business within the community.
“ All you have is your time to sell ” – Clients
Once you’ve decided whether to buy into an existing business or to start your own, you then have the core challenge of every tree business, clients. There are so many challenges involved on the client side of business:
How Do You Acquire New Clients?
- How do you keep them?
- Are they all worth keeping?
- How far should you travel to keep them?
- How do you keep them happy through winter?
In retail you can rely on foot traffic to bring customers into your shop. In the tree business it’s not so simple. You have to consider how to reach them, where to advertise and how much to charge. While digital platforms make targeting demographics easier than ever, it also means that you are competing with other businesses who can do the same.
Client acquisition in the tree industry is variable to competition, weather, price and cost per lead. All of these things must be weighed up and there is no simple answer. Instead, you’ll need to experiment, iterate and adapt. After learning how to acquire your new clients, eventually you’re going to have to decide whether all of your clients are worth keeping.
“Being a franchisor, we sometimes talk about the quality of clients, ” says Niko, “ I grade them as A, B, C or D. It’s up to you how many, if any, D grade clients you have. If you are in a small business – all you have is your time to sell .”
As a seasonal business, it is important to retain your clients through the low winter months. This is where prioritisation of clients can be important, as you will want to make sure your best clients are kept happy through summer so that they’ll be there for you in winter.
“ Distance is Crucial”- Location
Tree businesses aren’t confined to any one location, which can be both a benefit and a challenge. Having the capacity to drive to where the demand is can be a huge asset. However, if you drive too far then there is a chance for that travel time to eat into your profits. This means that too much travel can actually cause you a loss.
“Distance is crucial,” says Niko, “ downtime needs to be taken into consideration .” For this reason it is important to research the potential market of the locations that you wish to work. If an area shows a lot of promise for clients, it may even be worth moving there to cut down on your unprofitable travel time.
Being unrestricted to a single location poses other challenges too. Moving between different councils means you will need to navigate different council rules. Each council has different laws around tree maintenance and removal. As such, you will need to be familiar with a number of different variations of similar rules. Different suburbs also have different challenges in terms of demographics and accessibility.
Some regions might have dense urban forests, but tight streets. Others may have demographics less inclined to pay for tree maintenance, while others may have strict council rules that make your job more difficult.
There are many obvious challenges of a roaming business and others that aren’t so clear.
The best way to plan for this is to do your research, familiarise yourself with the area and speak to local professionals familiar with working in the region.
“ The more you travel, the less productivity ” – Expenses
Any business has to deal with expenses, a tree business is no different. Instead of rent and stocking supplies, your major expenses are wages, equipment and travel time. It is essential to have a good team of employees who are happy and hardworking. To achieve this, staff wages and superannuation must be a priority. If you don’t have a paid and happy staff, you won’t have a successful business.
Travel time represents another large part of your business expenses. “ Managing downtime is very crucial ,” says Niko, “ the more you travel, the less productivity in a day which will affect your bottom line.”
The final component of your major expenses is equipment.
“ Equipment maintenance is key to running any business with machinery and will serve you better for the long run ,” says Niko.
Your tools and your machinery are the foundation of your business. It is therefore advised that you do not cut corners wherever possible when it comes to the quality and maintenance of your equipment. Premium tools that last a long time will always provide your business with more value than cheap tools that deteriorate quickly.
“Not everyone is cut out to run a business” – Running a business
Once you’ve set up your business, chosen a location to focus on and started acquiring clients, you then need the management skills to keep the business running smoothly. These are the X-factor skills that you learn from practice and experience.
“ Not everyone is cut out to run a business ,” says Niko, “ time management is key, but so is business management, staff management and customer service .”
All of these skills feed into each other, so as you learn one you’ll improve the others. “ Better business management also teaches you better productivity so you can be more profitable .”
A successful business owner needs to be able to manage all of the areas we have discussed, while also having the humility to admit that you have more to learn. Business owners are constantly needing to learn lessons, accept failures and adapt to an ever-changing marketplace. While not everyone is cut out to run a business, anyone can do it if they are willing to jump into the deep end, learn from their mistakes and persevere.
“ We would like to hear from you ” – You Ready?
Whether you are an existing Tree business looking to improve, a new start up looking to grow or you’re thinking about starting a new business – we would like to hear from you.