Behind the Bark
Busy is not the same as profitable.
You might have a packed schedule for the next three weeks. Crews rolling. Trucks moving. But at the end of the month, the bank account barely moved.
When you quote a job, do you know exactly how much of that price covers your overhead? Or are you just hoping there is enough left over after payroll to pay the bills?
Most owners price jobs based on gut feel or "what the other guy charges." That is not estimating. That is gambling.
The owners who break past $3M and push toward $5M do one thing differently. They know their numbers cold. They can tell you their overhead cost per field hour, their equipment hourly rate, and their break-even on a truck roll. And they price accordingly.
The ones stuck at $1M or $2M? They are guessing. And guessing is expensive.
Limb of the Week
The Overhead Recovery Formula
Every hour your crew bills needs to cover the hours you cannot bill.
That includes:
Time spent quoting jobs
Drive time to the dump
Truck downtime in the shop
Insurance premiums that run 24/7
Office staff, software, rent, utilities
All of that overhead has to get recovered somewhere. If it is not built into your hourly rate, it comes out of your profit. Or worse, out of your pocket.
Here is the basic formula:
Overhead Per Field Hour = Total Monthly Overhead ÷ Total Field Labor Hours
Let's say your overhead last month was $18,000. Your crews logged 600 billable field hours. That means every field hour needs to carry $30 just to cover overhead. Before wages. Before profit.
If you are bidding jobs without adding that $30 per hour, you are subsidizing your customers.
The Equipment Trap
Here is where it gets worse.
You buy a $180,000 bucket truck. It makes your crew faster. A job that used to take 8 hours now takes 4. So you bid less because the job takes less time.
You just punished yourself for investing in better gear.
Equipment has its own hourly rate. It has to cover:
Purchase or lease payments
Maintenance and repairs
Fuel
Insurance on the equipment
Depreciation and eventual replacement
If you are not billing separately for the bucket, the chipper, the grapple saw, you are donating their wear and tear to the customer.
Ask yourself: Does your pricing get better when you invest in better equipment, or does it accidentally get worse?
Action Steps (30-45 minutes total):
Calculate your overhead rate (15 min): Pull last month's numbers. Add up rent, insurance, office staff, utilities, marketing, software, shop costs. Divide by total field labor hours. Write that number down.
Add it to your next bid (5 min): Take your labor hours estimate for the next job. Multiply by your overhead rate. Add that line to your internal estimate sheet, even if the customer never sees it.
List your three most expensive pieces of equipment (10 min): For each one, estimate an hourly rate that would cover its replacement over 5-7 years plus annual maintenance. Start tracking equipment hours on jobs.
Test your minimum (15 min): Calculate what it actually costs to roll a truck to a job site. Drive time, fuel, setup, teardown, opportunity cost. If your minimum charge is lower than that number, raise it.
Sawdust
The Minimum Charge Reality Check
Your minimum is not about what sounds affordable. It is about what covers your cost to show up.
A truck roll has fixed costs. Travel time, dispatching, fuel, setup, teardown, the fact that crew could have been on a higher-value job. If your minimum does not cover all of that plus margin, you are losing money on small jobs.
When was the last time you calculated your actual break-even on a truck roll? Not what you think it is. What the math says it is.
If the job does not clear that number, let the guy with the pickup truck and no insurance have it. Protect your calendar for work that actually pays.
Kickback
“We stay competitive on price" like it is a badge of honor.
Competitive with who? The guy running uninsured crews out of his garage? The company that will be out of business in 18 months because their margins are underwater?
You are certified. You are insured. You have real equipment and trained crews. You earned your rate.
But if your estimate looks like a grocery receipt with a single line that says "Tree Removal: $2,500," you are doing yourself a disservice. You look exactly like the cheap guy, just with a bigger number.
The homeowner cannot see your insurance policy. They cannot see your safety protocols or your equipment investment. They just see two pieces of paper with two different prices.
Your pricing has to communicate value, not just state a number. And it has to be built on math, not hope.
So there’s no need to apologize for charging what the work is worth…
If you know exactly what the work costs you.
If you read this and realized you have been guessing instead of calculating, you are not alone. Most tree services are.
The question is whether you want to stay stuck at your current revenue or build the foundation to grow.
Your marketing might be bringing in leads. But if your pricing model is broken, those leads are just keeping you busy, not making you money.
We help tree service owners figure out where the real leaks are, whether that is marketing, pricing, or both.
If you want a second set of eyes on your numbers, reply to this email and let’s get you more clarity and profitable growth.
Until next Saturday, I hope everyone has a safe and busy week as we all prep for Spring.
-Jacob
