John, thank you for doing this interview. I’m interested in the mindset shift required to move from employee to entrepreneur. I want to discover why some people able to make that move while others stay stuck. To kick off the interview, share how you started out as an entrepreneur.
I was an employee who trimmed trees for the power company. I got licensed, bonded and insured on a truck and chipper and started advertising. I was just going to do it on weekends, but be legal. But as soon as I advertised, the phone let loose. I gave my two weeks and went into full-time in my business.
I think I was 20 or 21 at the time. It was the first business I ever owned, and it took off! I did it without a college education. After I graduated from high school, I ran that company a little more than five years. I made some wrong moves. I dug myself in debt by buying equipment.
The company didn’t go under. I just shut it down. It got too hard. Then I went back to working for other people. After a while, I started another company. That company did twice as well as my first company. I learned from my mistakes.
That business had to end when I went through a bad divorce. Needless to say, it was easier to let everything go.
Now, here we are years later. I started J & F Tree Service here in Portland five and a half years ago. I put everything up out of my own pocket. I did not take loans in the beginning. I did buy some equipment. I think the first investment was about $25,000.
I bought some trucks and chainsaws. I got a chipper that was 50 grand, but I did a lease with option to buy so it cost me $1000 a week to rent that machine. After 50 weeks, if I made my payments on time, I got the title or the deed.
To launch this company, I worked two and a half years straight, seven days a week, from sunrise to sunset. Sometimes I worked from 6 in the morning till 10 o’clock at night, and I would collapse. I invested the money I earned back into the company.
I just kept buying more equipment. Now, five and a half years later I’m doing well. My income has grown substantially each year.
For the first two and a half years, I took just enough money to rent a house. I kept my overhead way down. I was careful with my money because I had slow spells. I needed my money to cover the bills. So here we are today. Now there is a 30 to 40% profit margin in the company. I have six employees.
You have started three different companies—two different companies before this one. Between each of those, did you transition back to an employee for a little while?
What is it about you that gave you the confidence to keep going from employee to entrepreneur?
Because I believed the people I worked for were the same as me. They put their pants and their shoes on the same way I do. There’s no difference between them and me. If they do it, I can do it. So I have that pure determination not to give up.
Were there a lot of roadblocks? Yes. Were there a lot of hurdles? Oh yeah. Were there times at the end of the day that I wanted to throw in the towel? Absolutely. But I would go to bed. When I woke up, I would say to myself, “I’m not giving up. I’m not a quitter.” And I’d get back at it.
It’s not easy. It’s for a person that’s self-motivated. You have to put in a lot of work. My whole goal was to make good money. That’s what I was after. So I didn’t rob the piggy bank at the beginning.
I built a cash cow. I invested in the cash cow and sacrificed two and a half years of my life to my job. Now it pays dividends with time. I could have taken the money in the beginning and made $80,000, or $100,000 a year. That wasn’t what I wanted to do. I wanted to make more, so I kept investing in the business
Since I’m a worker and I can do things faster than my employees, I used to push them out of the way and do it myself. But a guy said to me, “John, if you’ve got a thoroughbred horse let him run. Quit micromanaging.” He’s my sales guy now. He’s been here two years. So now I let my employees do their job, and it just kind of works out.
Yeah, do you ever think about how this business affects what you leave behind as your life’s work? Does your business allow you to affect more people for good than you think you could as an employee?
Absolutely, yes. Not only on the customer side. We’re doing the right thing. We do stuff that’s to the standards, and we do what’s right. We lose a lot of jobs because we won’t do the wrong thing. We do what’s healthy for the trees.
My employees make good money—above industry standards. And they get to hang out with their families and stuff like that. Some of our employees used to work six days a week just to support their families. Now they work here, and they work four days a week.
So do I think that’s a good thing? I do. I’m getting older, and I believe you can’t be a workaholic all your life. That’s not what we’re here for.
I think we should work, make money, and enjoy life. Does that answer your question?
Sure does, that answer is great. Did you run the business on the side while you were starting out?
I spent money on advertisement, and I think we got 27 phone calls the first day. So, I had to pick one or the other. I either had to work for my employer, or I had to throw the towel in on my employer.
I left the union job, and I went into the company.
How long did you take to decide?
I’m a fast mover. I made that decision in two days. I gave my two weeks notice, and then I went for it. From my experience, I knew I couldn’t do both. I couldn’t run a side business and work for somebody because I just couldn’t give 100% for both.
I left the union on good terms, and I went in on my first business. You have to give 100%. That way if it fails, it fails. There’s nothing wrong with that.
The beauty is that instead of wondering if you could have succeeded, you know. I’ve made a lot of bad errors—a lot of errors that cost me money. But I know I won’t do that ever again.
I don’t get discouraged over it. I laugh. I turn it into a joke. I look at the positives and laugh it off. And I say, “Well, I won’t do that again.”
Is your relationship with that union job still important to you? Does it affect you now in any way, positive or negative?
The last union job I left when I started this company was with a huge international corporation. I was in management. It was my first corporate job.
I gave my two weeks notice and went back into business. My manager said, “You can’t succeed. Look at this economy. You can’t do this.” I just said, “Look at my resumé.”
When I quit was there animosity? On my part, I feel not.
Was there animosity on their part? I feel yes.
That corporate job was just grinding. It took get more and more out of me. The more I produced, the more they threw on my plate.
At the end of the day, I was so exhausted. There’s no way I could have done anything on the side.
I look at it as a free education. Like I told my old manager, “This is the best college education I’ve ever gotten, and you paid me for it.”
Yeah, that’s an amazing thing. Jobs are a great way to learn so much.
They are, yeah. I learned time management. I learned how to treat people, and I learned how not to treat people. I took those learnings from the corporate job and implemented them in my business.
But I came out of there a micromanager. It took me two years to calm down from that corporate environment—and I was only there a year and a half.
If you believe in your business idea, write it on paper. If you still believe, you have nothing to lose. Don’t burn your bridge at your job, and go for it.
You talked a bit about learning time management and other habits in your corporate job. How important is your daily routine to your success?
It’s very important. I get up early so I can get my head balanced. Then I go into work where I do high-volume bids.
I visit the client. I do the bid, give them the price, and go on to the next one. Once I land the job, I’ve succeeded. I would love to sit there and talk to some of these people for an hour. Don’t get me wrong, I enjoy a good conversation. But I need to go to my next bid.
My goal is to give you an estimate at a fair price, land your job, and go to my next customer. Time management is vital. I ask myself, “Is this activity helping me reach my goals?”
I do spend some time socializing, but I control the conversation and revert back to the reason I’m there.
It’s kind of funny. I’m the new kid on the block. Here in Portland, I have clients that have been in business 10 years or more. Do you want to know how I do so well?
Yeah. It comes down to the relationship, doesn’t it?
It does. We’ve built a huge customer service company. We answer the phone. We treat people right, and we don’t give up. I don’t post hours that say we’re open from 7:00 to 5:00. There are days I work until 9 o’clock at night. If emails are coming in, if people want tree work done, I’m responding to those emails. That’s my DNA. I can’t let it go.
When I go on vacation I still handle phone calls. When you become a business owner that responsibility affects your vacation. When I went on vacation as an employee, I didn’t have to worry about work.
But when I’m on vacation I still have employees—I still have customers. I have to be there, available for them.
What do you think is your best time management habit?
I get up early and take an hour or two to get balanced, and then I go into my day. I get up early, and I go to bed at 8 or 9 o’clock every night, 7 days a week.
That’s how got where I am today.
When customers request bids, we don’t set an exact appointment time. We give a four-hour window. As bid requests come in, I group them by area. I go first to the areas where I can knock out the most bids in the shortest amount of time.
I’ve talked to competitors who bounce all over the place, zigzag. We have a pattern to what we do.
Some customers get mad because they want an exact time. I just can’t do that.
I’m not going to give you a 9 o’clock appointment when every appointment takes a different amount of time. I can pump out way more volume by doing a four-hour window.
Yeah, I understand that. That’s smart.
People get upset, but then that means we’re not the right company for them.
Do you think others should build a business quickly by borrowing money?
No. They should not. That’s my opinion.
And why shouldn’t they borrow money?
Because you don’t know what’s going to happen. I did it in my first company. I bought some equipment out-of-pocket, and I bought a new truck. It was probably one of the biggest errors I ever made.
With this company, I bought what I needed. Then I went to the manufacturers and asked for rent or lease-to-own agreements. That way, if the business didn’t work I was able to walk away and go back to my job. I wouldn’t have had the burden of these payments.
Yes. You were able to get through the down times a little better.
Absolutely, yes. I stayed a sole proprietor for three or four years because of the tax loophole. Since I was a sole proprietor, I was able to buy equipment and write it all off every year. Now I own about half a million dollars worth of equipment.
Now I’m structured as an S-Corp. I need write-offs, so I do have loans. After a year and a half I did borrow money to buy a brand new truck. I bought it in December for $60,000, and I had it totally paid off by May. I didn’t have other debt. As I kept purchasing equipment and getting it in the field, the revenue kept growing. I wasn’t getting surrounded by bills.
As you look back over your career, how important do you think friendship is to your success?
Very, very. I’ve built friends that are customers, and customers that turned into friends. Customer service is a huge part of my company.
Could my customers hire another tree service that’s cheaper than us? Yeah. But they love our customer service. They know it’s going to get done right. They pay a bit more than the lowest price, but they don’t have to worry about our work.
I believe in what I’m doing. If you’re going to start a company, you’ve got to decide what you want. What kind of company do you want to have?
At the end of the day, the numbers don’t lie. If you do things dirt cheap, you’re going to get a ton of work. You can do things dirt cheap in the beginning—just to get your name out there. Then you go back to a normal pricing schedule. My company is not the highest and we’re not the lowest.
We’re right in the middle on pricing.
How do you recommend others handle negative criticism when they’re starting out?
Go back to what you believe in and what your gut tells you. I believe you must have the intuition.
You also have to be a person who can process problems and solutions without emotions. You have to drop the emotion out. One of my buddies is a multi-millionaire, and he did not agree with the route I went. He said it was dumb. I was going to lose. I just told him, “You could be right. I could be wrong.” His criticism gave me more motivation. I wanted to prove him wrong.
That might make me look psychotic, but that’s what happened. The more people said I couldn’t do it, the more driven I was to do it.
Where should aspiring entrepreneurs find people who will encourage them?
You never know who might steer you wrong. It’s tough to build a support network.
I do believe in reading books. Don’t worry just make money is a good book. I’ve it that over and over. When I read something that clicks in my head, I run with it. That book helped because everywhere else I went, I got negative or discouraging feedback. People were saying, “You’re crazy, that idea is stupid.” I just had to go with what I believed.
I want to talk a bit about faith. I don’t know if you’re a person of religious faith or not. And the answer doesn’t need to be religious.
I’m a firm believer in God. I pray several times through the day. I wake up in the morning and pray. I go to bed and pray. And I don’t pray for selfish things. I pray for guidance. I ask God to help me do the best I can. I pray for my employees to be safe, and stuff like that.
Have you ever had to make a decision without complete information? Perhaps you did your research, but you just couldn’t get a definitive answer and you had to decide.
I won’t make a rash decision. If someone needs an answer right away I will avoid the question until I’ve had time to process it. As I dwell on the decision, I notice whatever alternative keeps coming up—you know? “This is the route. Take the road to the left.” I choose that way. I accept my decision, and sometimes it’s a good decision. But sometimes it’s like, “Well, I shouldn’t have done that.”
Does faith help you cope with uncertainty?
Oh, absolutely. We’re human. We don’t have a crystal ball to know which way to go. So we make the best decision at that moment and go with it.
I play it out in my head, in scenarios. If I make this decision, this other thing has to fall in place. Then, this. I make sure it happens, to the best of my ability.
Well, we talked about some of your difficulties. This is your third business, so I have no doubt that you have persistence. Will you share a story of when you wanted to give up on your business, and how you kept going—despite discouragement?
I just go to bed. It’s usually at the end of the day when I want to give up and say, “This ain’t worth it.” I think it’s human nature to feel discouraged when we’re tired. Maybe our brains run out of gigabytes, or out of power.
So do I go sideways and say, “I’m done, I’m selling it”? Yes. Then I wake up the next day, and I stay focused on what I have to get done.
Part of running a business means I have to accept imperfection in others. I have to make compromises a lot of areas that I’m not used to. I’m a person who wants perfection. That’s who I am by nature.
When I do something, I’m in it 110%. I want to do it perfectly.
Is there ever a good time to just give up? How do you know when it’s time to quit on something?
Well, we’re planning our retirement. I’m 43 years old. I have years left in me. But the stress level comes like a roller-coaster.
When it’s stressful, it’s stressful for days.
There are sleepless nights during the tough times. Then when it’s good, it’s good. Am I at the point of giving up? No. Because then what would I do?
I bought a house. That’s one part of my retirement. We are buying investment properties. I won’t check out on the business until I have another revenue stream—probably from real estate.
I will buy more houses, duplexes, and four-plexes. Once I am making money every month without doing anything I’ll make the retirement decision.
If I gave up, I’d have to move somewhere else. I’d have to sell my house, my cars, and my toys.
What is one mistake you’ve seen lots of new business owners make, and how can we avoid it?
When you make good money, you spend the money. That’s the biggest error, in my opinion.
As money comes into our business, we set some aside for taxes. That way it’s available when the tax bill comes due.
Money management is the biggest challenge. When I have a good week, will I spend all that money? Absolutely not. It will sit in my business account.
When bills come in, I pay them in full.
I pay the rent, trucks, and whatever else I can as far forward as possible. That is a 100% write-off. When my bills are paid in advance, I have a comfortable feeling.
In my industry there are six months where I make good money. The other six months I’m just keeping the employees working.
Hold off on your list of wants as long as you can. Make a short-term sacrifice for the long-term win.
John, what’s been your biggest business success so far?
Keeping my company small. Each time we want to expand, I can’t hire people to do the job to our high-quality standards. I believe I’m in a sweet spot. There’s a law of diminishing returns. I don’t want to expand, put more crews on, have more headaches, and more fires to put out—all of that for just a little more profit.
I started my company to make good money. Did I think I’d ever make this kind of money? Absolutely not. I’m fine where I am.
I just want to keep money coming in, to earn my paycheck, and to live a happy life.
Other business owners go after the money and have to chase dollars to stay busy. I don’t want to do that. I worked two and a half years, seven days a week. Now I just want to work a regular schedule. My family’s more important than work.
To summarize my advice: money management is the big key. When you make good money, don’t jump on a plane and go on a vacation in the beginning. Try to build your nest egg—your savings account. Have as many months of bills in your bank account as you can before you start buying things.
Why do you recommend the book you mentioned earlier, Don’t Worry, Make Money: Spiritual and Practical Ways to Create Abundance, and More Fun in your Life?
If you start a company, pick your rate. Stick to your rate. And if people don’t want to hire you they’re not a good fit for you. I like books because I don’t have to ask for suggestions from a human being. I’m able to read the literature, and I’m able to take it in and process it on my own.
Yeah. There’s something about books with that distilled wisdom. The person that’s sharing it isn’t looking at your life pointing things out. They’re just saying, “Here’s what works for me.” If they have a bias, it’s not a bias against you. It’s just their bias.
Right. And there are ideas in a book you won’t relate to, or even comprehend, and that’s okay. The parts of the book that I understood and believed in helped me out. I ran with those ideas.