Starting a Tree Service Business the Right Way

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– Start a Tree Service The Right Way – Why Does It Matter
– 10 Most Important Factors For Tree Service Business Success
– #10. Start with No Debt
– #6. Anticipate & Plan for Unexpected Events
– #2. Get Proper Tree Climbing & Tree Cuttings Skills!
– The Role of Customers in Your Business
– ‘Done For You’ Lead Generation Service
– Get More Customers

There are multiple success factors behind starting a new tree service business and keeping it going. A new tree service owner needs to juggle no less than 15 critical success factors. But which are more important? And why does it matter?

Start a Tree Service The Right Way – Why Does It Matter

It’s so important to get the best possible start to your new tree business. The US Bureau of Labor Statistics report that of the 653,000 businesses started in March 2015, only 330,000 survived to March 2019. That’s a success rate of 50% in 5 years. Winners and losers exist in the tree service industry too, at the same rate.

According to IBISWorld’s report published in May 2019, there are currently 181,400 tree service businesses in operation across the USA. Couple this with the fact that the average lifespan of a small business in USA is around 10 years according to the US Census Bureau, Business Dynamics Statistics, 2014.

With total numbers of tree service businesses reasonably stable, the above statistics mean that around 18,000 brave young men and women will venture into tree service business ownership every year in USA.

10 Most Important Factors For Tree Service Business Success

All 15 success factors were put into a poll hosted by a major Facebook Group of 24,000 tree professionals. Established tree service practitioners then voted for the 10 winning success factors. So here are the critical success factors ranked in reverse order. You MUST focus upon these if you want your young tree service business to survive and flourish:  

In reverse order of importance according to real-life tree service business owners/arborists

10. Start with No Debt

Tree practitioners recommend that you limit your exposure to finance, initially at least. Your expenses and outgoings can be made even more formidable if you have payments to make on machinery, for example. There is no guarantee that you can build your income quickly enough to cover your business expenses further elevated by monthly loan payments.  

Instead, save up for a good quality, new chainsaw and rigging equipment. Start with a reliable, second hand truck and second hand trailer. Then when you can afford it, replace with new for even more reliability. A chipper can come later as can a chipper body truck too.

All the time, save up for a second-hand bucket truck but only when you can afford it and predict a reliable stream of big jobs that would warrant such an expense.

9. Create and Use Proper Bid sheets and Terms of Service/Payment

Don’t copy a dubious template from some other tree firm (who probably copied it from someone else and so on). And never do business on a handshake. Get a decent bid sheet created by your attorney so that your written proposals are expressly linked to your terms of service and payment. In this way, your customer agrees to both the price and your payment terms when they agree and sign your quote. Acceptance of both your price and your terms is vitally important to form a strong contract between the parties (you and your customer). It will give you significant leverage before going legal because a good contract is so much easier to enforce in the courts.

Share your professional training marks and other credentials on your bid sheet. TCIA and ISA membership gives your customer more confidence of getting a professional job. When competing for work, this will help your bid stand head and shoulders above the low cost, uninsured operators out there who might be competing with you for the same job. Result: a higher hit rate of bids to jobs completed and fewer problems when asking for payment.

8. Plan your Business Carefully with a Written Business Plan

A systematic approach is best otherwise your enthusiasm could get the better of you. Get as much advice as you can. Get advice from your local Small Business Administration. A lot of the advice is free. Many SBA’s will even appoint a mentor for you to help with your business planning. A written plan will also be highly beneficial if you do end up seeking finance for heavy equipment.

7. Bid for Profitable Work

The basic principle is bid to make a profit rather than bid to win the work. Work backwards from your expected outgoings & expenses recorded in your cash flow forecast. From this you can work out what you need to earn every month, week and working day.

6. Anticipate & Plan for Unexpected Events

When running your own show, expect to get curve balls thrown at you on a regular basis. Expect your truck to break down at the most inconvenient time, expect a slower than expected start to your business fortunes. Anticipate that you may get injured at work. Assess the impact of each on your cash flow and make due allowance. Either that or put enough savings away to survive a couple of lean months. Also work out what you will do if you get a sudden rush of business. Will you intend to hire more crew, or subcontract the work out to another firm or decline the work. Try and figure out your preferred option and anticipate how you would carry it out if called upon.

5. Be Fully Insured

Aim to start your operation fully insured. This means Workers Compensation Insurance and also General Liability coverage of at least $1million. An insured operation will be much more attractive to a homeowner and it’ll win you more work. It’ll also help with industry accreditations. Insurance is also an essential qualifier if you intend to bid for municipal and utility work. This, in turn, leads to even more business. Yes, insurance can be expensive in view of the 200 tree work related deaths and even more serious injuries each year. But not being insured will slow your business growth and catch up with you sooner or later.

4. Look professional, Be Professional

Take care of how your business is presented to your customers. When doing work in neighborhoods, you will often be under close scrutiny from residents, some of whom could be future customers. As well as professionally-drafted bid sheets, think how else to put your best foot forward.

For example, have you and your crew decked out in clean, branded work wear. Get a logo designed for your firm and print it on t-shirts, overalls, jackets etc. Invest in communications gear for your hard hat so you are not shouting at your ground crew in quiet neighborhoods. Instead, you are whispering to them softly into your microphone. Pay attention to your vehicle signage too as covered in point 1 of our separate article here. It needs to be noticeable from some distance at least your brand and phone number. Add your credentials as you have done on your bid sheets. Result: quiet, efficient, professional looking work and crew increasing your chances of word-of-mouth referrals.

3. Hire & Retain Great Crew

Your crew can make or break your business. Take care to choose and train the right team that works well together. Doesn’t matter if they are groundies or climbers. It’s dangerous work and they have to gel as a team.

Retention is as important as recruitment. It’s tough to hang on to good staff, in this industry. Problems can multiply in winter when trade is slow, especially in the northern U.S. states. Luckily, we have 22 winter tree service marketing ideas for you to keep the phone ringing in the quieter months. This will keep your crew gainfully employed in your tree business year-round.

2. Get Proper Tree Climbing & Tree Cuttings Skills!

Proper tree climbing and tree cutting skills will give you more work, better profitability and fewer work mishaps because a decent skill-set will:

i). Reduce risk of personal injury

ii). Cut lost business days inept operations and injury

iii) Improve your market reputation as a safe, competent operator

No-one argues that tree removal and tree trimming is not one of the most dangerous trades in the country, even more hazardous than roofing. There are countless online examples of failed tree felling incidents, horrible injuries and worse unfortunately. TCIA records around 200 deaths from tree work every year.

Start In Someone Else’s Tree Business …Not Yours

So you must have tree climbing and tree cutting skills to reduce the risk. Personal injury will stall your business progress and put its future at risk. So you simply must get professional training. Go work for the best operation you can find, absorb as much as you can and study for the ultimate ‘climbing arborist’ qualification. This approach will give you the best possible foundation for your young business. Join your local Arborist Society too to network with the professional independents and pick up more, best practice in the industry.

If you’re not allowed to climb trees on the job, show that you have studied the basics to accelerate your learning whilst employed.

As well as reducing the risk, a well-honed skill set will enable you to do a better job for customers. It’ll help you decide when to climb and when to use the bucket. Better service for your customers is the key to a long term, durable business. Build your reputation from the start and it’ll build your business for you …almost.

And Now For The Most Important Factor to Get Right when Starting a Tree Service Business…

1. Build Your Reputation for Excellent Service

This is the top-voted factor of them all. This is because it’s the most sustainable way to achieve tree service business success. Build your reputation for good work and good service. Customers love polite, smiling crew who respect their property whilst working and clean up afterwards. Go the extra mile if it doesn’t make you late for the next job. Set up your job to improve chances of a referral. At the least, make it easy for the customer to leave a testimonial on your website. To accelerate your reputation build, direct the negative reviews to your email inbox and the positive ones to Yelp or Google.

If something goes wrong with the work and it will, make it right so that your customer has little opportunity to leave a negative review. Get this area of reputation management right and your customers will eventually do most of the heavy-lifting to promote your business through positive ‘word-of-mouth’ advertising.

The Role of Customers in Your Business

This simple poll confirms the supremacy of the customer in your business. Of-course, you don’t have a business until you have a few customers. For example, you can’t build a good, local reputation for your business unless you have customers; even then, it takes time to build. You can’t hire and retain the best crew unless you have paying customers.

And you can’t pay yourself, the number 1 shareholder, executive chairman and CEO.

So you’re going to have to get the word out to get the ball rolling when starting a tree service business. The low cost activities include creating an active Facebook Page, Yellow Pages listing (but a small ad can cost between $250 and $450 per month), free Yelp listing. A rudimentary website from a low cost page builder can amplify your efforts. From there, you can consider press ads, radio ads and digital marketing. There are many options from which to choose.

‘Done For You’ Lead Generation Service

If you’re starting a tree service business, you’ll need paying customers. You’ll want a reliable stream of live phone calls from prospective customers in your local service area. Therefore, you should consider a ‘done-for-you’ lead generation service. Compare how well-qualified the calls are, the cost per qualified call, whether the inquiry is exclusive to you or sold to 4 other businesses and whether you can listen back to the calls. Our own phone call service competes strongly with available options as you can see here:

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John Hackwood