Slow the Snowball To Start the Business?
Mark has already paid off $100,000 in debt and has $40,000 left. Can they slow down a little and spend about $10,000 to get his small business off the ground?
QUESTION: Mark in Iowa has already paid off $100,000 in debt and has $40,000 left. Can they slow down a little and spend about $10,000 to get his small business off the ground? Also, when will he know when to give his tree removal business a full-time try? Dave addresses those one by one.
ANSWER: I wouldn't spend a dime on advertising. Let advertising be your sweat. Buy Guerilla Marketing by Jay Levinson and learn ways to inexpensively advertise and grow your business. In your world, it's as simple as letting everyone in the building business, the real estate business, the insurance business and the insurance adjusting business know you exist. Keep fresh donuts in your car at all times and drop them off at the local real estate office. Put flyers of what you do everywhere. They always need a tree removed.
When you see an old tree while driving down the street, pop into that person's driveway and offer your services, then ask for referrals. Look for guys who are selling firewood. That kind of stuff will get you so much business if you'll keep your prices right. After that, I might spend $3,000 for a used chipper truck. But all you want right now is something cheap and used and barely gets the job done. We don't want to have an ego the size of our chipper truck.
As far as knowing when to quit and go full time, if you've just made $5,000 or $10,000 in the past year, so far it's just a glorified idea. It's not yet a business. You need to get your income up in the tree business to some healthy percentage of your other job. If you make $40,000 at your other job, you don't need to make $40,000 in the small business to quit, but you do need to make $25,000 or $30,000.
Get the business moving and the income up. Run it like a business and have a set of accounting books on it. Put your estimating on a computer and keep up with your jobs. Figure out what source you are getting most of your business from and pound them with your marketing efforts. Do all that and build yourself up, and then you're ready to go.