How to Start a Tree Service

People are really starting to take care of their trees. Tree trimming and related services have boomed in recent years, with the industry doubling in size over the last decade. If you’re a bit of a tree hugger, or just enjoy working outdoors, you could start your own tree service and get in on this fast-growing market. It will take a bit of an investment to get started, but you could run the business from home and make good money.

But before you fire up the chainsaw, you’ll need to cut through all the red tape and learn how to launch a business. Fortunately, this step-by-step guide will teach you all you need to know to get your successful tree service off the ground.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a tree service has pros and cons to consider before deciding if it’s right for you.

Tree service industry trends

Industry size and growth

• Industry size and past growth – The US tree trimming industry is worth $29.1 billion in 2022 after expanding 230% in the last decade.((https://www.ibisworld.com/industry-statistics/market-size/tree-trimming-services-united-states/)) 
• Growth forecast – The US tree trimming industry is projected to grow 2.3% in 2022.
• Number of businesses – In 2022, 125,065 tree trimming businesses are operating in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/tree-trimming-services-united-states/)) 
• Number of people employed – In 2022, the US tree trimming industry employs 279,392 people.((https://www.ibisworld.com/industry-statistics/employment/tree-trimming-services-united-states/)) 

Trends and challenges

Trends in the tree service industry include:

• Tree diseases are becoming more prevalent, driving up demand for tree services.
• Construction growth has increased demand for tree removal services.

Challenges in the tree service industry include:

• Injuries are a huge problem in tree services work, creating a liability for businesses.
• The seasonality of tree services has created a labor shortage in the tree service industry, as most workers prefer year-round opportunities.

Demand hotspots

• Most popular states – The most popular states for tree trimmers are New York, Ohio, and New Hampshire.((https://www.zippia.com/tree-trimmer-jobs/best-states/))
• Least popular states – The least popular states for tree trimmers are Arkansas, Kansas, and Wisconsin.

What kind of people work in tree services?

• Gender – 4.8% of tree trimmers are female, while 95.2% are male.((https://www.zippia.com/tree-trimmer-jobs/demographics/))
• Average level of education – The average tree trimmer is high school educated.
• Average age – The average tree trimmer in the US is 37.6 years old.

How much does it cost to start a tree service business?

Startup costs for a tree service range from $15,000 to $32,000. Costs include the down payment on two trucks and a variety of equipment. 

To learn tree service skills, you can take a variety of courses through the Tree Care Industry Association. You can also become an ISA certified arborist by taking an exam. 

You’ll need a handful of items to successfully launch your tree service business, including: 

• Blocks and pulleys
• Light and heavy-duty slings
• Friction brakes
• Rigging plates
• Carabiners
• Winches
• Power pullers
• Ring slings
• Cable hoists
• Swivels
• Rigging thimbles
• Rope
• Hand saws
• Pruners
• Polesaws
• Hand pruners
• Tree loppers
• Wood chippers
• Axes and wedges
• Hedge trimmers
• Hatchets
• Chainsaw
• Saw scabbards
• Pruners
• Chainsaws
• Wood chippers
• Tree loopers
• Hatchets
• Hydraulic tools
• Pole saws
• Helmets/hardhats
• Saddles
• Protective goggles/glasses
• Straps
• Spurs
• Ascenders and descenders

How much can you earn from a tree service business?

The average price for tree trimming is about $450. Tree removal and stump removal can cost up to $700. These calculations will assume an average job price of $500. Your profit margin after labor should be about 50%. 

In your first year or two, you might do four jobs per week, bringing in $104,000 in annual revenue. This would mean $52,000 in profit, assuming that 50% margin. As you get repeat business and referrals, you might have 10 jobs per week. With annual revenue of $260,000, you’d make a tidy profit of $130,000.

What barriers to entry are there?

There are a few barriers to entry for a tree service. Your biggest challenges will be:

• The skills needed to properly care for trees
• Acquiring the long list of equipment necessary for a tree service

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a tree service, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research tree services in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing an ISA certified arborist, or a stump grinding business.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as tree trimming or tree removal.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your tree services

You can offer a variety of services including:

• Tree trimming
• Tree pruning and hedge pruning
• Tree removal
• Stump removal and stump grinding
• Tree health evaluation

How much should you charge for tree services?

The average price of tree trimming is $450, which stump and tree removal cost considerably more. After costs and labor, you should aim for a profit margin of about 50%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market may be homeowners or businesses. You can find homeowners on Instagram or Facebook. You can connect with business owners on LinkedIn or find them on Google or Yelp and call them directly. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire more workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Tree Service Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “tree service” or “tree care”, boosts SEO
• Name should allow for expansion, for ex: “All Seasons Tree Care” over “Tree Disease Control Services”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Tree Service Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Summarize your tree service business’s mission to provide comprehensive tree care, including trimming, removal, and emergency services.
• Business Overview: Describe your business’s focus on offering professional tree care services such as tree removal, pruning, stump grinding, and health assessments.
• Product and Services: Detail the range of services, including tree trimming, disease management, emergency removal, and stump removal.
• Market Analysis: Assess the demand for tree services in your area, considering factors like local climate, types of vegetation, and residential or commercial landscaping needs.
• Competitive Analysis: Compare your business to other local tree service providers, highlighting your unique strengths such as specialized equipment, expertise, or customer service.
• Sales and Marketing: Outline your strategy for attracting clients, using tactics like local advertising, social media marketing, or partnerships with landscaping companies.
• Management Team: Highlight the qualifications and experience of your team, especially in areas like arboriculture, business management, and safety compliance.
• Operations Plan: Describe the operational process, including service scheduling, job execution, and equipment maintenance.
• Financial Plan: Provide an overview of financial aspects, covering startup costs, pricing strategy, and revenue projections.
• Appendix: Include supplementary documents such as business licenses, insurance policies, or detailed service agreements to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to tree services. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your tree service will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a tree service business. 

Step 8: Apply for Tree Service Licenses and Permits

Starting a tree service business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your tree service business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Jobber, Arborgold, or ArboStar, to manage your scheduling, communication, workflows, and invoicing.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your clients are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Marketing

Here are some powerful marketing strategies for your future business:

• Local SEO: Make sure your business appears on Google Business and other local online directories. This helps you show up in local searches and maps, which is crucial for businesses like tree services.
• Social Media: Use platforms like Facebook and Instagram to show your work, especially before-and-after photos of your services. Also, interact with local online groups.
• Content Marketing: Create a blog or videos about common tree issues. Cover topics like tree care tips, identifying diseased trees, or the benefits of professional tree services to showcase your expertise.
• Referral Programs: Start a program that rewards customers for referring new clients. This can be through discounts or other perks.
• Local Business Partnerships: Work with local landscapers, garden centers, or construction companies. This can lead to more customer referrals.
• Email Marketing: Collect your clients’ emails and send them regular updates, tips, and special offers. Ensure the content is interesting and useful.
• Branding and Uniforms: Invest in professional branding, like a memorable logo and company uniforms, to build brand recognition and trust.
• Community Involvement: Get involved in local events or sponsor community projects to increase your visibility and reputation as a community-friendly business.
• Flyers and Local Ads: Hand out flyers in neighborhoods, especially after storms or seasonal changes. Also, advertise in local newspapers and community bulletins.
• Free Assessments or Consultations: Offer these to engage with potential customers and demonstrate your knowledge and professionalism.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your tree service meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your tree service business could be:

• Professional tree services for lovely landscaping
• Sick trees? We’ll save ‘em if we can, remove ‘em if we must 
• Regularly scheduled tree trimming to keep your property perfect

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a tree service business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in tree services for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in tree services. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

You will need workers to fill various roles. Potential positions for a tree service business include:

• Tree Service Workers – trim trees, help with removals, etc 
• General Manager – scheduling, administration and more 
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Tree Service Business – Start Making Money!

People are finally showing their love for trees, driving an industry boom. That’s why now is a great time to get in on the action. With your own tree service, you could do good for the environment and provide a much-needed service to businesses and homeowners while making a good living and working outdoors. If you’re willing to work hard and have a passion for what you do, building a lucrative company will be a snap! 

This guide has given you some much-needed business skills, so now it’s time to gather your equipment and launch your successful tree service.