Description Report Examples
The purpose of this paper is to analyze the company known as Droege Tree Care, a tree care service local to St. Louis, Missouri. The company has been in business for 22 years and provides services in all aspects of plant health care to promote the health of trees. Droege Tree Care employs over 30 arborists, who are the most qualified individuals to make decisions about maintaining trees.
Droege (pronounced “dreh-gee”) Tree Care began doing business in 1993. The company is run by its president, vice president, and three executive shareholders. Before 2008 the company had over 60 International Society of Arboriculture (ISA)-certified arborists employed there, but due to the Great Recession it had to downsize to about 30 arborists.
Droege Tree Care has a variety of stakeholders who benefit from the company. They are listed in order of who has most to gain from the success of the company, to who has least to gain.
Employees: The employees of Droege Tree Care earn there livelihood by working there. Without the company they would no longer have the means to support themselves. If the company fails, it is the employees that have the most to lose.
Customers: The customers of Droege Tree Care rely on the company to provide debris-clearing services after a storm or tornado. Without this service people would have reduced access to the streets, their homes, and their cars.
Suppliers: Droege Tree Care uses a wide variety of suppliers depending on what kind of job they're doing. Though all of these companies benefit from Droege's business, they are all large companies, and probably wouldn't notice if they no longer received business from Droege.
Stock holders: The stockholders of the company have invested money into the company. The value of the stock rises and falls with the value of the business. While the stakeholders have a general interest in the company, they do not have money or stock to lose in case of Droege going out of business.
Economic: The state of the economy has a significant effect on the success or failure of the business. In a poor economy, fewer people can afford to have arborists come and assess and prune their trees. This is a type of job that poorer people will want to do themselves. The economic downturn of 2008 meant that a lot of people stopped soliciting Droege's services. This has been a huge burden to Droege, which has had to lay off over half of its employees since 2008.
Political/Legal: The legal factors to consider are the zoning codes that must be followed when trimming or pruning trees on people's and company's lawns. These can make a job more difficult or expensive. Political and legal factors are however not a threat to the success of the business.
Environmental: Environmental factors play a large role in arborism. The business thrives in the summer, when the trees are leafy and need pruning, and comes to a near stop in the winter, unless there is a major storm that uproots trees and strews debris everywhere. The environment tends to play a threatening role to the success of the company, since it is its most limiting factor.
Competitors: Droege Tree Care is one of the only tree care services that caters to the St. Louis area. Therefore, it does not have many competitors. However, Droege Tree Care is in direct competition with home owners who prefer to maintain their own trees and lawns themselves, without the proper licensure or knowledge of zoning laws.
Demographic: Demographic factors have a big effect on Droege Tree Care's success as well. St. Louis has a population of 319,000 according to a 2010 census. However, fewer people live in houses with lawns now than did 10 to 20 years ago, as people have been moving back into apartment-style housing. This means that the demand for Droege's business has gone down. Demographic factors tend to pose a threat to Droege Tree Care.
Global: Global factors have an indirect impact on price of the clearing, pruning, and assessment tools that Droege Tree Care uses. Global trade, therefore, has an indirect effect on Droege's daily expenses. However, most of the materials Droege uses are manufactured in the United States. On the other hand, the global economy also plays a factor in Droege's success, in that the global economy affects the national economy, which in turn effects the demand for Droege's services.
Target Market: The target market for Droege Tree Care is, of course, trees. Specifically, it is the people and businesses who own properties where trees are growing. Droege Tree Care strives to provide quality arboreal maintenance and care for all of the city of St. Louis at a fair and affordable price.
Management Style: Droege Tree Care operates under a leadership management style. The president is the leader of the company and is directly responsible for hiring new employees, setting the pace of the work and creating a positive work environment.
Employee Recruitment: Droege Tree Care has had a constant staff of over 30 employees since 2009 and has not hired any new arborists in the last 6 years.
This assignment has revealed much about the nature of managing a tree care business. If anything has become evident to me, it is that there are many more reasons why a business would fail than why it would succeed. Droege Tree Care is constantly in battle with forces that would cause it to fail, including falling demand, economic downturn, and the rising cost of tools and equipment. Owning a business in tree maintenance has much more to do with than just providing a service, but involves constantly assessing the risks and opportunities that confront the business.
This paper has taught me that there are many dangers to being a small business owner. Small business owners have less of a security net than the owners and managers of large businesses and are never truly far enough from financial failure for it to not be a constant worry. In order to minimize the chance of failure, businesses should be insured against specific risks. Not only should they purchase standard insurance policies, they should know the specific risks the business faces and insure against them.
Another way to minimize risk is to be cash-conscious. Droege Tree Care only handles cash and check transactions; they do not accept debit or credit. According to Scott Lovingood, CEO of The Wealth Squad, Inc., a small-business consultancy, “The number one risk for most small businesses is improper cash-flow management.” By accepting only cash and checks, Droege has simplified its accounting, making it easier to keep track of the cash flow through the company. Small businesses should create a contingency plan in case of a slowdown and set aside at least three to six months of operating costs in reserves.
It is also important for small businesses to keep their stakeholders informed and involved in the company's activities. Stakeholders are influential in setting the company's priorities and objectives. When a company plans a business strategy, it must consider the desires of its stakeholders and involve them in the decision-making process in order to ensure that the implementation is successful.
Nickels, William G., James M. McHugh, and Susan M. McHugh. Understanding Business. Tenth. New York: Mcgraw-Hill Irwin, 2010. 6-7,393-395. Print.
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Filisko, G. M. 7 ways to minimize small-business risks. Bankrate, 2014. Web. 25 February 2015.