Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Updated on May 16, 2023
Fast Facts
Investment range
$15,550 - $32,100
Revenue potential
$104,000 - $260,000 p.a.
Time to build
1 – 3 months
Profit potential
$52,000 - $130,000 p.a.
Industry trend
Growing
Commitment
Flexible
How to Start a Tree Service
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Tree Service Business Name
Create a Tree Service Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Tree Service Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Tree Service Business - Start Making Money!
Tree Service Business FAQs
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.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
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
Start-up Costs
Ballpark Range
Average
Setting up a business name and corporation
$150 - $200
$175
Business licenses and permits
$100 - $300
$200
Insurance
$100-$300
$200
Business cards and brochures
$200 - $300
$250
Website setup
$1,000 - $3,000
$2,000
Down payment on two trucks
$4,000 - $8,000
$6,000
Equipment
$10,000 - $20,000
$15,000
Total
$15,550 - $32,100
$23,825
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
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
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 products or 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: Brief overview of the entire business plan; should be written after the plan is complete.
Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
Product and Services: Describe your offerings in detail.
Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
Appendix: Include any additional financial or business-related documents.
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.
Make Logos, Business Cards, Social Designs and More!
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
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.
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
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.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
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.
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.
They 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
Some of your business will come from casual online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
Instagram: Same benefits as Facebook but with different target audiences.
Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Book Now.” This can sharply increase purchases.
Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.
Kickstart Marketing
Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
Flyering – Distribute flyers in your neighborhood and at industry events.
In-Person Sales – Offer your tree services to local businesses.
Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal.
Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
Pay–per-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.
Do a webinar – Share your tree expertise online with a video seminar.
Testimonials – Share customer testimonials about how your tree service helped them.
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.
Tree Service Business FAQs
How profitable is a tree service?
Tree services are expensive, so it can be a very profitable business. You’ll need to know the proper tree care techniques so that you can do top-notch work, and that, along with great service, will drive your success.
How should I price my tree services?
The average price of tree trimming is $450. Stump and tree removal can cost $700, perhaps more, depending on the size of the tree. 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 Stepprofit margin calculator to determine your mark-up and final price points.
How do I ensure the safety of my team and clients during tree service operations?
Conduct thorough risk assessments before starting any job to identify potential hazards. Provide proper training to your team members on safe work practices, equipment operation, and use of personal protective equipment (PPE). Regularly inspect and maintain all tools and equipment to ensure they are in good working condition. Adhere to industry safety standards and regulations, such as using appropriate climbing gear and fall protection systems.
How can I effectively market my tree service business to attract clients?
Create a professional website that showcases your services, expertise, and customer testimonials. Optimize your online presence through search engine optimization (SEO) techniques to improve visibility in search results. Utilize social media platforms to share before-and-after photos, educational content, and engage with potential clients. Network with local landscapers, arborists, and property management companies to establish referral partnerships.
Can I start a tree service on the side?
Evaluate the time and resources you can dedicate to the business, considering the demands of your primary job and the availability of your team members if you have one. If you do start it as a side hustle, properly manage scheduling and client expectations to avoid conflicts and ensure a high level of service.
What is the best tool to cut tree branches?
The best tool to cut tree branches depends on the size and type of branches you are dealing with. Common tools for cutting tree branches include pruning shears or secateurs for smaller branches, loppers for medium-sized branches, and pruning saws or chainsaws for larger branches.