Are You Ready for Success? Financing for Expansion Often Requires a Leap of Faith

As I write this, I’m watching six guys take down a massive 100-foot pine tree next to my house.

The tall trees in this neighborhood were one of the things we loved when we moved to North Carolina from New York three years ago. When they developed my neighborhood, they left many of the trees intact, giving it a somewhat “storybook” look–my wife’s words when we first drove in.

That said when these trees get too big, too close, and start leaning your way … well, in the words of the guy who came to price the job: “If you’re thinking about it when the wind blows, it’s time to take it down.”

What impresses me as I watch them work is the equipment this company has. Of course, they have a commercial chipper and a dump truck. They brought two skid steers of different sizes to maneuver the cut branches across my yard to the chipper. They have giant plastic sheets to lay down to protect the grass. They have a mini-crane to help maneuver the larger logs into the chipper. Never mind the saws, ropes, safety equipment, and similar. If my yard and logistics allowed it–they don’t–they’d have brought their bucket truck and perhaps the giant crane they used on my neighbor’s tree last month.

A tale of 2 tree companies

Seeing all their equipment strikes a chord with me. When I write about equipment financing for my client Crest Capital, I often use tree service companies as an example. Because there is almost no way to grow as a tree company without a substantial investment in big equipment. And this company working in my yard today is a prime example of this.

I had some minor tree work done several years ago as well. It was a small trim job. The company I used did a fine job, but I did notice a lack of big equipment. Its one skid steer was tiny. Its dump truck was old. In talking with the owner, I found out he had been in business for years but bought only used equipment when he could pay cash, as financing or “owing people” made him nervous. So basically he started small and stayed small. Which is fine, mind you. As I said, he did good work on the little trim job, and I would hire him again for that, but I never considered him for this big, complicated, and somewhat dangerous job. Heck, the small guy didn’t even have a website, relying exclusively on Facebook. The company that I hired for this big job? It has an excellent website, with pictures of its modern equipment and previous jobs. 

This is what small business growth is all about, seeing the potential in what you offer and making sure you can execute on it. 

Recognize the growth opportunity

There’s a critical juncture in a business where you get beyond that initial startup phase and look around and say, “You know, I actually have something here.” This is the point where you likely need to grow beyond your garage, your little office, or the limitations of your current bank balance.

There is no time limit on this either. It could come six months after startup, or six years. It depends on you, your mindset, and of course, how busy you are. But for most companies, there’s a grow-or-stagnate point. Perhaps you can relate?   

Recognizing this point is a matter of realizing just how much more you could do if only your business was more. Maybe that means bigger or more equipment to put on another crew or offer a new complementary service. Or moving to or opening a new location to serve a larger area. Maybe it’s bringing on new people. Or any combination of these. This is where your entrepreneurial spirit needs to soar.

Taking the growth leap

Your entrepreneurial spirit soaring often requires a leap of faith. Unless you are already rich, the new and bigger equipment or expansion or whatever growth looks like for you will often involve financing and or borrowing of some sort. That takes a confident, growth-oriented mindset. It takes looking objectively at your business and ascertaining that whatever equipment or expansion you have in mind will be profitable. And then you take that leap of faith. It’s really the only way to grow.

This is why I repeatedly return to tree companies when writing about equipment financing. It’s such a great example that’s easy to relate to. The amount of equipment necessary is a major factor in tree company growth, and a major factor in separating these companies. Mind you, the guy who did that small trim job a few years ago told me he could remove the tree I’m getting taken down today. I was just starting to worry about it then, but I couldn’t envision him doing it. His company, and the company here today, are playing two completely different games. One took that leap of faith, got the equipment it needed, and grew. One didn’t.

Which path makes the most sense to you?