Establishing a tree service business is a good idea because it is profitable. We’re talking about an industry that grows steadily and is 100% sustainable. Moreover, you can run your business from your home.
If you feel nervous about starting a business, you can work your tree service business part-time. See how it goes, and then decide if you want to develop it further. However, this is only the beginning. Firstly, you need to have arborist skills. Then, you need to be able to set up and manage a company.
Business management becomes essential at this point. Customer retention, profit/expense balances, and planning will be a part of your routine. Besides this, you may need guidance and surely a lot of planning. Also, you’ll have to find the tools to help you streamline processes.
So, if you’re wondering how to start a tree service business, check out this guide. Here, you’ll find the basics to help you run a successful business in the tree care sector.
What Does It Mean to Establish a Tree Service Business?
Like in any other enterprise, you’ll have to learn the basics of running a business. One of the first things you’ll need is the initial capital to invest in the equipment you need to get started.
It’s a good idea to consider costs in advance. For example, setting up a legal entity costs; often there are fees. In many cases, you’re going to need a business license too. Acquiring a general liability insurance policy is also vital if you want to protect yourself from unforeseen events. Consider the time you’ll have to invest. Keep in mind that knowing the local regulations and their updates is vital.
When it comes to skills, a tree service company must be fully covered. You don’t necessarily have to be a board-certified master arborist. But if you’re not, make sure you hire the right people for the job.
Finally, it’s time to consider profits. Do your homework and find out how much a standard tree service business makes. Thus, you can establish realistic expectations.
In other words, check out the following guide on how to start a tree service business. Here, you’ll find practical advice on each of these points.
How Much Money Can You Make with a Tree Care Business?
Tree service providers make the most of their money by regularly maintaining several properties. Activities like monthly pruning and trimming are the most stable ones. However, the big bucks come from emergencies and tree removal services.
The size of your profits will depend on how big your operations are, but this is only the beginning. No business structure can survive without proper planning. In this case, your ability to keep costs down and negotiate smart prices will make the difference. The right balance of these two factors can bring you healthy profits.
If you want hard numbers, a tree services startup can make from $100,000 to $200,000 a year. This amounts to $50,000 after deducting expenses. There’s always the possibility to expand in the tree service industry and earn from $500,000 to over a million. You, as the business owner, will get approximately 10%.
The secret to achieving this kind of revenue is to expand while consolidating your reputation. Obviously, you must provide top-notch tree care and excellent customer service.
How to Start a Tree Service Business—Setting Up Your Company
When it comes to a tree service business, it’s always better to plan ahead. Ask yourself the following questions: do I want to run the company by myself or with my descendants? Do I want to eventually grow into a franchise? How many employees do I want to have?
The key is to see yourself ten or fifteen years from now and make your decision accordingly. Naturally, you need to set up your business plan to support such a framework.
Writing Your Business Plan
Your business will be as successful as your business plan is solid. Think of this as a roadmap that establishes the purpose of your tree service company. What are your mid- and long-term goals? How will you achieve them? By establishing these parameters you will be able to assess your progress.
Writing your business plan properly is key. Owners must set up the path toward a successful business. This includes realistic goals and first-year projections.
The next thing is to decide who your potential customers are. Will it be residential clients? Are commercial clients an option too? Keep in mind that commercial property owners produce a lot of profit. However, residential customers provide a more steady income. You’ll also get a steady income through premises that require constant upkeep.
Don’t forget to factor in the expenses for safety equipment and other resources that you may need for a smooth workflow. If you will need an office and staff for your tree care company, this should be considered in your budget.
How to Start a Tree Service Business—Choose the Right Business Structure
There are several structures that you can choose from: partnership, C corporation, S corporation, sole proprietorship, non-profit organization, or limited liability company. Depending on your state of residency, you’ll have different responsibilities and tax liabilities.
If you will run your tree service business solo, then you need a sole proprietorship. Yet, most people choose an LLC as this provides more protection. In other words, your personal assets are separated from the company’s. This option is useful in cases of lawsuits.
Finally, keep in mind that you can change your structure as your tree care business grows.
Registering Tree Service Companies
The next step is to register your legal entity with the local businesses registry. If you want trademark protection, you’ll have to register it on a federal level too. The processes, the fees, and the business license will depend on the jurisdiction and the structure.
Find out what are the required documents at your city’s town hall. There, you’ll know the exact cost of registration. At this point, it’s important to register your domain name and set up your social media platforms. Thus, you’ll make sure that no one takes the name of your brand.
The cost to establish a tree care business is between $10,000 and $50,000. It includes the business license, business insurance, equipment insurance, umbrella insurance, renting a warehouse, et cetera.
Moreover, you’ll need all kinds of equipment, like safety gear, trucks, pruning shears, computers, chainsaws, ladders, a wood chipper, wheelbarrows, and other tools. You’ll also need business cards, an accounting system, invoicing software, and a website. Also, think about how many employees you’ll need.
It’s hard to estimate the costs without knowing the services that you’ll offer and the equipment you’ll need. However, once you establish these two parameters everything else depends on your planning skills.
Defining Your Key Partnerships and Revenue Streams
Now, it’s time to think about how your tree-trimming business will generate income. The first step is to choose what services you’ll provide and your target market. By considering what type of customers you want, you can attract them more easily. Remember that you’ll get more work by partnering with other tree care companies than competing with them. Try to see what’s missing and fill in the gaps.
Also, define what tasks your company will do and what you will subcontract to other providers. For instance, you can specialize in tree care and health inspection. Thus, you can delegate trimming and removal to one of your partners.
Subcontracting to landscaping agencies is a good idea. Also, you can offer tree planting, pruning, bracing, stump grinding, fertilization, and tree storm repairs.
Finally, it may be a good idea to stick to one service at the beginning and expand later.
Establish a Business Bank Account and Credit Card
By setting up a business bank account, you’ll be protecting your personal assets. If you mix both, assets like your home, car, jewelry, et cetera., may be at risk. Nobody is safe from a potential lawsuit, and you can never be too cautious.
Another great tool is the business credit card so that you can get financing on behalf of your tree service business. Thus, you can access benefits like higher credit lines and better interests.
Pricing Your Professional Tree Care Services
The next step is to put a price on your services. You need to make a profit, otherwise, your business won’t be sustainable. In other words, offering the lowest price does not guarantee success.
You need to consider various factors like local costs, insurance premiums, gas costs, labor costs, and others. Also, you need to know what your competitors are charging. The price you choose must cover all expenses and generate a healthy profit margin.
Don’t hesitate to choose the fees that are more convenient for you. Think about the experience you have, the equipment you need, and the employees you must hire to get the work done.
Once you’ve made sure that you’ll get a decent profit, you can go ahead and release your services. Charge by project or by the hour. This depends on you, but keep in mind that the hourly rates vary from $100 to $500.
Getting a Business License
You don’t need a license to become an arborist. Instead, you need lots of experience. But things are different when it comes to tree service businesses. In this case, you’ll need the corresponding business license.
Tree services involve many things, but emergencies and removals are more expensive than simple landscaping. Customers may have structures or important plants at stake that need to be saved, for example, a Japanese maple. In other cases, a tree can threaten the foundation of a house.
One thing is sure, in these extreme cases, people want to be safe. Thus, they won’t even consider you if you don’t have the proper license in place. Insurance is also vital for protection if something goes wrong.
To speed up the licensing process, you can get either national or international certifications. A common practice is the establishment of ongoing training programs as a requirement.
All in all, if you want to maintain the license for a tree-cutting business, you need to comply with certain standards. Many times these are even higher than those required by the state or the local government.
Get a Good Business Insurance
Tree trimming is an activity that needs extra caution. It not only entails a high risk but also a potential liability. In line with this, you can cover your tree service business with a reliable insurance policy. This protects you against different risks.
For arborists and tree professionals, the following are the most common policies:
- Auto insurance: This is a mandatory requirement in many jurisdictions. With this policy, you are protected when using one or more vehicles for your business.
- General liability insurance: This option grants you financial protection against accidents that may occur while you’re providing services. This includes damage to a third party’s property and injuries.
Choosing Your Equipment and Crew
You’ll have to rent a place to allocate your equipment. Another option is to make room in your own home. By contacting a storage provider you’ll have a good idea of space sizes and monthly fees. If you decide to make room in your house, make sure that everything fits. There has to be room for a computer, equipment, client files, and bookkeeping.
Your equipment will vary according to your services but it can include anything from pruning shears to ladders. Chainsaws, stump removal equipment, or climbing equipment are also possible options. When it comes to safety, you’ll need glasses, gloves, and work boots.
Purchasing a corporate vehicle for transportation is a good idea. After all, you’ll need to transport employees and equipment from one job site to another.
Finally, those who have a tree removal business will need space to carry trunks and branches. In this case, an industrial mulching machine can come in handy.
Defining Your Workflow
If you’ve managed to create a reputation and a presence in the industry, you’ll start getting new clients. Now, what do you do at this point? It’s time to create a work process that is efficient. You need to provide good services while making sure you answer all your leads.
Here is a standard workflow:
- Collect customer details from the first contact (by phone, email, WhatsApp marketing, et cetera)
- Create a job proposal
- Schedule the job
- Create the order
- Invoice your client and collect payment (receiving card payments via phone or tablet)
When your business is still small, you can handle this with pen and paper. However, as you grow you’ll have more clients, employees, and possibly different departments. Don’t underestimate the power of good CRM software. It will help you stay on top of things.
Setting Up a Phone System
Keeping your personal life separated from your work can be challenging. However, it’s not impossible. Start by setting up a different phone line for your company.
You won’t only gain some privacy but your business will benefit as well. Potential clients will be able to find you more easily, and you can automate the lead collecting process. Moreover, this gives your company legitimacy.
When you decide to set up your business phone system, find out the packages available in your area. Base your decision on rates, services, and features, and start enjoying the benefits.
Defining Your Brand
Naming your company is a very important step. Remember that it must reflect your brand and convey trust. Some companies, for example, use the family’s name which is a great option. If people in your area know and trust you, your last name will help you get more clients.
Choosing the right name for your brand is difficult but necessary. In general, a good name describes your services and conveys professionalism. It also has to be easy to remember.
Tree services companies usually have their names on the side of their trucks, on uniforms, and on documents. It should also be visible in your office and social media profiles. Clients will see this name every step of the way from the first quote to the final invoice.
After this, the next step is to create a logo. Besides being compelling and attractive, it must be in line with your type of business. Naturally, the logo will also appear on all your social media channels.
Any arborist benefits from marketing, especially if they run their own tree service business. In other words, marketing is essential. When it comes to nurturing and converting leads, there are two main approaches, digital and traditional.
The oldest and most successful tool is word of mouth. The ball will start rolling once you get your first customers. Startups, then, need to find other ways.
You can create flyers that describe your services in detail and contain your contact information. Business cards are also a good promotional tool. You can hand these out to potential clients and current ones after you’ve completed the work.
If you want to go the extra mile, you can put your business name in local directories. For local companies, participating in local trade shows and entrepreneur events can be a great boost.
Digital marketing is about online presence. Start by setting up a website with the basics: an about us page, a services page, and a contact form. You can also include pictures, reviews, testimonials, and an “our team” section. Then, you can set up marketing campaigns so that your brand can reach a wider audience.
Keep in mind that social media accounts are an extension of your website and a key feature of your online presence. You’ll see that interacting with clients on Facebook and Instagram will help you get more leads.
Once this is set up, you need to create the most important thing in digital marketing, content. From blog entries to social media posts, make sure that your content reflects your identity. Content must be engaging and provide value so that your audience recognizes your knowledge in the tree service business. If you don’t know where to start, analyze what your target audience wants. Find out what people need from providers like you and write content to fill these needs.
Considering SEO is also vital. SEO stands for “search engine optimization” and is a practice that helps you rank on Google’s search pages. People will be able to find you online when they look for services similar to yours.
SEO can be applied in several places of your strategy. It involves web design and optimization, articles, pages, posts, reels, and other similar elements.
Think About Ways to Make Your Tree Care Business More Profitable
A great way to optimize your profits is to specialize in high-value services. Consider niches like tree and root removal and emergency care. If there are no strong competitors in your area, you can expect to have a lot of clients.
Having employees perform these tasks can be expensive. The solution is to recruit a crew that can handle more ordinary tasks like fertilization and trimming. Parallelly, you can have two experts in the more challenging tasks so that you can cover both wings.
FAQs about starting a tree service business
1. What qualifications or training do I need to start a tree service business?
Qualifications and training required: A solid grasp of safety procedures and tree care procedures is necessary for starting a tree service business. There are certification and training programs available to provide you with the knowledge and abilities you need. Search for courses that have received accreditation from professional bodies like the International Society of Arboriculture (ISA).
2. What equipment do I need to start a tree service business?
Equipment required: Chainsaws, stump grinders, chippers, ropes, and harnesses are just a few of the tools needed by tree service organizations. To guarantee that you can handle any job that comes your way, you will need to invest in high-quality instruments that are reliable and effective.
3. How much does it cost to start a tree service business?
Starting a tree service business can be expensive, depending on the size and scope of your enterprise.
The price of the necessary tools, insurance, licenses and permissions, marketing, and employee wages must all be taken into account. You may evaluate your startup expenditures and make a realistic budget with the aid of a business plan.
4. How do I find customers for my tree service business?
Customer acquisition: One of the best ways to bring in new clients for your tree service company is through word of mouth.
In order to reach a larger audience, try building a website and social media profiles, asking happy customers to recommend you to their friends and family. You can find new business by establishing connections with neighborhood contractors, property managers, and landscapers.
5. What insurance do I need for my tree service business?
Insurance is required because tree service companies run the risk of liability claims, property damage, and other concerns.
To safeguard your company against monetary losses, you must get liability insurance, workers’ compensation insurance, and commercial auto insurance.
6. What are the risks involved in a tree service business?
Risks: Working in the tree service industry sometimes entails operating at heights and with heavy machinery. To prevent mishaps and injuries, you must make sure that both you and your personnel have received the appropriate training in safety procedures.
7. How do I price my tree service business?
Pricing policies: Most tree service companies bill by the job or the hour. The complexity of the project, the equipment required, and the location can all have an impact on pricing. Consider offering discounts to recurring clients or sources of referrals while researching your local competition to make sure your pricing is reasonable.
8. What are some common mistakes to avoid when starting a tree service business?
Avoid common mistakes by Underestimating start-up costs, skimping on high-quality equipment purchases, neglecting to acquire the required licenses and permissions, and failing to develop a marketing strategy are all common errors made when beginning a tree service business.
To avoid these dangers, it’s critical to write a strong business plan and consult with professionals in the field.
9. How do I market my tree service business?
Marketing techniques: In addition to word-of-mouth advertising, tree service companies can use marketing techniques including developing websites, social media profiles, and business cards.
To draw in new business, think about providing free estimates and special deals for first-time clients. You can locate new customers by developing connections with neighborhood contractors, property managers, and landscapers.
10. How do I expand my tree service business?
Company expansion: When your company expands, you might want to think about adding landscaping, lawn care, and other similar services to your offering.
In order to manage an increased workload, you might also want to hire more employees. Make a business plan before growing and evaluate the expansion’s operational and financial viability.
Final Thoughts on How to Start a Tree Service Business
This guide will help everyone who wants to know how to start a tree service business. Besides a big initial investment, you need careful planning.
From finding storage to hiring the right professionals, you must consider every detail. Establish your services, create a roadmap, and set up a marketing strategy. With this, you’ll have a successful tree care business before you know it.
If you liked this article on how to start a tree service business, you should also check out this one with service business examples.
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