By Paul Taylor
By nature, most professional arborists are born climbers. Reaching for the next branch in business — both literally and figuratively — seems to be second nature to those of us who have carved out a career in the tree industry. The dilemma that many business owners, myself included, have wrestled with is how and when to implement a growth strategy.
The tree care industry is a particularly tricky business. Not only do we face extreme physical risks on the job site, but we also have to contend with the day-to-day hazards of navigating the waters of entrepreneurship. Risk assessment is absolutely critical when evaluating and approaching trees and it’s just as important when addressing the growth and expansion of a business.
As a climber, I always try to minimize the likelihood of prematurely removing a portion of the tree that could serve as a key rigging point for the balance of the job. As a manager, I believe the same risk assessment and disciplined approach to planning should be employed when considering a strategic growth initiative for a company as a whole. Just as a poorly planned cut can hinder the forward progress of a given job, poorly planned strategic moves can hinder the forward progress of your venture as a whole.
Owners and managers should have a keen understanding of the fundamentals that drive their business, as well as the infrastructure to handle an increased workload. There are several things to consider while planning for a growth spurt.
Get a grip
Companies gearing for growth need to have a solid foundation in place before they begin building. If you are having a difficult time managing your business at 200K in sales then it is highly unlikely that doubling your revenue will make for a smoother, more profitable operation. Regardless of its size, make sure you have a firm grasp on your business in terms of knowledge and infrastructure before you begin to expand.
Business owners and managers need to have a clear and concise understanding of their financials. Identify your breakeven point, as well as the implications of falling short of that mark. An increase in cash flow does not necessarily mean an increase in profits. I would much rather run a small but profitable tree care company than a large operation that bleeds money. The increase in time and stress that generally accompanies an increase in workload should be rewarded by an increase in dividends. I have spoken to many seasoned tree care company owners who have dramatically increased their gross sales over the years, yet aren’t banking any more money on a personal level.
There is more than one way to fell a tree and certainly more than one way to grow a company. One safe bet is to leverage the aspects of your business that have proven to be sustainable and profitable. Before you branch out into a new market or decide to offer additional services, consider whether or not you have maximized the potential of your current core competencies and customer base.
Be prepared to delegate
As a company grows, it is simply impossible for the owner/operator to continue maintaining all areas of the business. The manner in which an owner transitions from practitioner to manager will have a tremendous impact on the long-term success of his/her venture. Letting go is rarely a comforting proposition for any entrepreneur, but it is an important aspect of growing a business. No matter how hard a worker you are, you simply can’t do everything on your own and expect to get ahead.
Plot a course
Before you start buying equipment, booking more jobs and hiring additional employees, put together a roadmap that outlines goals, your strategic plan to achieve those goals, and a financial model defining milestones and minimums. Above all else, make sure you have the necessary team in place to execute the plan, and make sure that everyone is committed to the task at hand.
Top-line growth needs to have a positive bottom-line impact. If a company is growing like crazy in terms of gross sales, but isn’t generating sustainable profits — or is having a difficult time keeping the machine running smoothly — troubles are likely to come The Titanic was on pace to make a record crossing of the Atlantic, but we all know how that story ended. When considering a move to take your business to the next level, it is important that you chart a clear course, taking careful account of potential obstacles that could sink the ship. It’s the plan and the structure within that will determine the ultimate success of your business — no matter what size you are.
Paul Taylor, founder and former “head monkey” of Arborwear, has been involved in the tree care industry since he bought his first chain saw (before he was old enough to drive a car). He is now involved in a new venture, Long Splice Design, and specializes in the design, manufacture, and sourcing of sewn products. You will also find him a couple days a week plying his favorite trade in the treetops. He can be reached via e-mail at firstname.lastname@example.org