How to Start a Tree Trimming Business
If you’ve worked as a tree trimmer for years, you’re already familiar with the intricacies of safely working on trees. While working for a company can bring in a steady paycheck, if you have an entrepreneurial spirit and want to maximize your earnings, it might be time to start a business of your own. Starting a tree trimming business has its challenges, but it can also be a highly profitable opportunity. Be sure to familiarize yourself with everything that would be involved with your transition from employee to business owner as you plan out your next career move.
Tree trimming businesses typically offer a variety of services, and they may focus on residential or commercial properties or both. Common services include tree pruning, the removal of dead or inconvenient trees, as well as stump grinding and stump removal. Some businesses combine these tree trimming services with tree transplant or insect control services. Some may also venture into additional landscaping services to help build a customer base and increase profits.
The tree trimming industry has experienced recent growth. According to IBIS World, from 2014 to 2019, the tree trimming industry experienced 6.4% annual growth. During that time, the number of businesses increased to 181,394, and the number of employees also grew to 284,760. In 2019, the industry was expected to bring in $24 billion in revenue.
This growth is due to multiple factors. An increase in residential and commercial construction means increased demand for tree trimming and removal. During that time period, per capita disposable income also increased, meaning homeowners had more money to hire a professional to maintain the trees around their home instead of attempting the tree removal and maintenance themselves.
Multiple trends currently affect the tree trimming industry. According to Jobber Academy, one of those trends is an increased awareness of environmental preservation and the overall importance of the environment. More homeowners seek to preserve trees and create outdoor spaces their families can enjoy, and tree trimming businesses can help them fulfill those goals.
Now, more than ever before, tree trimming businesses need to make sure that their businesses can be found in the locations where potential customers are looking for those services. Businesses need to have an active online presence across multiple platforms. A Facebook page and a Google My Business page are a must. Staying active in local Facebook community groups and on the Nextdoor app is also important.
The increased focus on immigration regulation has meant that many tree trimming businesses have lost employees, adding to the ongoing challenge of recruiting and keeping on staff in a largely seasonal business. Tree trimming businesses increasingly need to find ways to offer employees value, whether that’s in the form of bonuses and pay raises or a supportive work environment that allows employees to access specialized training.
Tree trimming businesses market to property owners who need services like tree trimming, tree removal, or tree maintenance. This business’s target market is property owners who have the disposable income to purchase these services and who would rather hire a professional than attempt the tree trimming or removal themselves, whether for convenience or safety benefits.
Checklist for Starting a Tree Trimming Business
If you’re thinking about starting your own tree trimming business, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.
Step 1: Write a Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan.
The tree trimming industry is highly competitive, and detailed planning is important in ensuring a business’s success. Tree Views suggests that business owners invest plenty of time in creating a quality business plan. Not only will this business plan be important in validating that the business is practical, but it can also help to secure funding from lenders.
When creating a business plan, thoroughly research local competitors, and perform a competitive analysis. This analysis should focus not just on competitors, their services, and their prices, but also on factors like market share, trade territory, the years that a competitor has been in business, and the ways that those businesses are potentially valuable. Maybe you’ll discover that businesses have limited services in an important area, like providing tree care services using eco-friendly products. If you can find areas where services are limited, or competitors are weak, you can design your business to take advantage of those areas and bring in new customers as a result. Don’t forget to read reviews of competitors on sites like Yelp to get a sense of what customers feel are the business’ strengths and shortcomings.
Not only will a bank require you to have a business plan to get a loan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 3: Choose a Business Structure
A business structure (also referred to as a business entity) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of structure has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business structure is best for a tree trimming business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
While tree service businesses are largely mobile, renting a garage space for vehicles and equipment may be necessary, especially as a business grows to include multiple vehicles. Rental costs will vary depending on the location and size of the space. If operating out of your home, be sure to check zoning laws before starting.
Related: Choosing a business location
Step 5: Register for Business Licenses and Permits
Most states don’t require a tree trimming service to obtain a specific license to do tree work, though a handful of states require a contractor’s license. Additionally, the Occupational Safety and Health Administration (OSHA) has some requirements for tree trimming businesses, such as first aid training and the wearing of personal protection equipment.
There are also some general business registration that may be needed like a business license, or Employer Identification Number if the business has employees.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a tree trimming business is another. While the cost to start is relatively small, obtaining funding to start a tree trimming business can be difficult. In order to get a loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
Tree trimming businesses rely on ongoing marketing to bring in new customers. Common marketing activities include handing out fliers and business cards in neighborhoods, being active on social media platforms, Yellow Pages, paid online advertising, and even the use of direct mail.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a tree trimming business. A few of these include:
– Workers’ compensation insurance is a must in this high-risk industry, and it helps cover expenses like medical bills or lost wages if any employees are ever injured while on the job.
– General liability insurance helps to protect the business if customers, or their property, are injured or damaged as a result of the tree trimmer’s work. This policy usually covers expenses like legal fees or medical bills.
– Commercial auto insurance covers the business’ vehicles and trailers, offering protection if the vehicles are involved in a car accident. Most personal auto insurance policies do not cover commercial activity, so be sure to check before operating your personal vehicle for business.
The cost to insure a tree care company will vary according to factors like the value of a business’ equipment and the number of employees on staff. To get the most accurate idea of what insurance will cost, it’s best to request quotes from multiple insurance providers. When comparing the quotes, pay attention to important variables like coverage limits and exclusions, premiums, and deductibles.
Insurance is important, but because of the dangers of this industry, it is essential to make a focus on safety a daily part of the business’ activities. Implementing quality training programs for both new and current employees can help everyone work together to spot safety risks and potentially prevent accidents. By developing a workplace culture of safety, business owners can help to protect their staff and themselves while on the job.
Step 10: Hire Employees
Even a small business will need to hire a crew for safety and practicality. According to Recruiter, tree trimmers or tree pruners make an average salary ranging from $24,000 to $36,000.
Experience and education often affect the salary range, especially since a highly experienced trimmer will require less training and start working sooner than an inexperienced hire.
In addition to budgeting for employee salaries, a business will also need to play for other employee-related expenses, like workman’s comp insurance, disability insurance, training costs, paid time off, and potentially health insurance and retirement contributions.
Having access to a pool of temporary employees is important as there will be times when additional labor is needed to complete big jobs.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start a tree trimming business?
The cost of starting your own tree trimming business will vary depending on the business’ size and the services that it will offer. If an owner already has access to a suitable business truck and trailer, the cost of starting the business will be substantially lower. With access to vehicles, expect to spend about $10,000 to start up a smaller business. If vehicles and trailers need to be purchased, the cost can be as great as $100,000 or more.
Some common startup costs for a tree trimming business include:
– Basic equipment like chainsaws and ladder
– Safety gear
– Specialty equipment like stump grinders, wood chippers, and shears
– Bucket truck and trailer
How much can a tree trimming business owner make?
The profit of a tree trimming business will depend on factors like the services the business offers, how long it’s been operating, and even how large the business is. According to PayScale, operations managers in the tree services industry average $62,000 per year. In most cases, operations managers also own the business, indicating that tree services businesses can be highly profitable.
Understanding the seasonality of the business is important to budget properly or provide counter-cyclical services to keep income coming in and employees paid throughout the year.
Are there grants to start a tree trimming business?
It’s extremely rare to find a grant to start a tree trimming business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What skills are needed to run a tree care business?
Starting a tree care business doesn’t require a business degree, but certain skills and experiences can increase the business’s chance of success.
Tree removal experience. Knowledge and experience in tree removal are essential. Ideally, a business owner will have worked for another tree trimming business before starting their own. Certification is also available from the International Society of Arboriculture (ISA), which may improve your business’s credibility.
Arborist knowledge. Knowledge of tree health and care is also important in this industry, especially if a business is offering maintenance and care services. The ISA Certified Arborist designation is available to help further professionals in the field.
Safety training. Tree trimming and removal are highly dangerous activities, so a business owner should have previous experience in safety training, and they should design and implement safety training programs for employees.
Management skills. When evaluating potential employees and hiring, training, and managing staff, previous management experience and skills will be valuable.
Customer service skills. A business owner will also benefit from customer service skills. Good phone etiquette, the ability to understand customer concerns, and punctuality will improve a business’ reputation and encourage customers to become repeat clients.
Marketing talents. Most customers only need tree trimming or tree removal services occasionally, so it’s important for business owners to take an active role in marketing the business on an ongoing basis.
What is the NAICS code for a tree trimming business?
The NAICS code for a tree trimming business is 561730, which is categorized under Landscaping Services.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?