How To Start a Tree Service Business: Follow These 4 Steps
There are many different reasons that people are driven to start an tree service business. Franchise owner Christina Rancilio, who joined the trade after leaving a career in the tech industry, was recently profiled by Tree Care Industry Magazine. Rancilio was drawn to the opportunity to work outdoors among plant life in a challenging field that requires a significant amount of specialized skill and knowledge.
This entrepreneur wanted to be a trustworthy service provider in the arborist industry. “Every single time I brought it up, people would emphasize to me how much they wanted someone they could trust,” said Rancilio, according to Tree Care Industry Magazine.
To start a tree service business, individuals need to be thoughtful, meticulous and thorough. This highly specialized field requires a unique set of understanding as well as careful planning and preparation. Here, we’ll walk you through the process step by step to get you on your way to producing a stable tree service business income.
Step No. 1: Make a Business Plan for the Tree Service Business
Do you know the old adage about “failing to plan”? It’s especially true for individuals who are in the process of starting a small business. If you don’t have a robust plan in place, you’ll have to create your entire tree service business piecemeal. This rudderless strategy will be inefficient at best but costly and dangerous at worst.
In addition to helping you chart a course toward financial success as you start a tree service business, a proper plan can be an invaluable tool for securing investors who will support your project and for applying for loans.
The U.S. Small Business Administration noted that there are two main types of business plans:
- The lean startup business plan format.
- The traditional business plan format.
Either version may suit your needs, at least initially. The traditional format contains more information and takes longer to produce, while the SBA claimed that the lean version could be completed in as little as an hour. This abbreviated format may serve as an initial document sent to pique the interest of potential partners, while the traditional format could help lead a more detailed conversation once they’ve requested to learn more.
Lean Startup Business Plan Format for Starting an Arborist Business
The SBA credited Alex Osterwalder’s Business Model Canvas as influencing the lean startup business plan format. On the Small Business Administration’s website, the lean business plan format features nine simple central components:
- Partnerships: With which companies will the arborist business form partnerships? This may include suppliers, dumpsites or equipment lenders and maintenance companies.
- Activities: Share how the tree service business will stand out from the competition. This can be related to specialization, service delivery or selling techniques.
- Resources: What assets do you have at your disposal to support your tree service customers? If you’re a franchisee, this may be built into the package, including a network of support.
- The value proposition: Succinctly summarize how the arborist service will deliver a unique benefit for its customers.
- Customer relationships: Outline how customers will interface with the tree service business, from initial contact through consultation, service, billing and any follow-ups.
- Differentiated customer segments: Determine who the ideal customers are for the tree care business, whether that includes local jurisdictions or government agencies, private enterprises, homeowners associations or individual property owners.
- Individual channels: Share how the business will facilitate customer interaction. Some examples include email, phone and online portals.
- The cost structure: Identify expenses associated with the operation, including tree specialist labor, storage, back-office necessities, equipment usage and machinery maintenance.
- Establish revenue streams: How will the tree service’s customers be billed? Is it per job or as a regularly recurring service fee?
Starting a Tree Service Business With the Traditional Business Plan Format
While the lean format is intended to give the reader a quick overview of the business plan in a one-page document, examples of traditional business plans may run several pages long. For instance, two examples on the SBA website totaled eight pages each. These plans provide significant depth and a comprehensive exploration of business strategies.
Traditional plans may contain the following sections:
- An executive summary.
- A company description.
- A market analysis.
- A description of the organization and its management, including the company’s legal structure.
- A detailed explanation of the services offered.
- A marketing and sales strategy outline.
- A specific funding request for the reviewer.
- Financial projections for the next five years.
- An appendix with supplemental materials.
It’s up to you to decide if a lean startup business plan, the traditional format or a combination of the two is best for mapping out your strategy and for recruiting potential partners and investors as you start an arborist business.
Visit the SBA’s business plan page for additional information and downloadable fictional examples, which could even serve as templates during the development of a new plan.
Account for Financial Constraints When Starting a Tree Service Business
A recent article in Tree Care Industry Magazine pointed out that arborists, like many small businesses, often struggle with cash flow issues. A thorough business plan, especially as it evolves, should include detailed financial guidelines, including contingency strategies for managing temporary cash flow constraints.
Step No. 2: Apply for Tree Service Licensing and Certifications
Depending on where an arborist business is located, different licensing requirements may be in place. States and local jurisdictions can mandate their own exams and fees for tree service licensing. Tree services should be mindful of the regulations where their businesses are located and in areas where they operate.
Certifications from national and international professional organizations can help make local tree service licensing processes easier and faster. Often, industry arborist organizations include continuing education requirements. To maintain their certification, businesses must achieve standards that frequently surpass those established by states and municipalities.
Tree Service Certifications From the International Society of Arboriculture (ISA)
One industry-leading credentialing organization is the ISA. The association’s Certified Arborist designation is one of the most popular certifications provided by the group. Individual crew members employed by the tree service business may have to earn specific licenses and certifications.
Additional certifications available from the ISA include:
- Certified Arborist Utility Specialist.
- Certified Arborist Municipal Specialist.
- Certified Tree Worker Climber Specialist.
- Certified Tree Worker Aerial Lift Specialist.
- Board Certified Master Arborist.
The ISA also offers a qualification in tree risk assessment.
Tree Service Accreditation and Certifications From the Tree Care Industry Association (TCIA)
TCIA is another professional arborist organization that provides specialized certifications for tree service companies and individual workers, including:
- TCIA Accreditation: This businesswide accreditation program aims to help tree service companies improve safety and employee performance while providing strong customer service and meeting industry standards. This credential can help arborists stand out from competitors.
- TCIA Utility Contractor Accreditation: Like the organization’s broader accreditation above, this third-party certification is available for tree service providers that work on clearing vegetation away from utility lines and rights of way.
- Certified Treecare Safety Professional (CTSP): This designation is available to staff members who want to participate in industry-specific safety education and learn about current best practices. Having CTSPs on staff can prove beneficial for several reasons, including for insurance purposes.
- Electrical Hazards Awareness Program (EHAP): This TCIA safety program can help arborist businesses ensure that employees have the skills and training necessary to meet standards from the Occupational Safety and Health Administration.
Step No. 3: Get Properly Insured
To start a tree service business, it’s essential to have proper insurance policies in place. Arborist businesses must also be able to verify for customers that their policies are up to date. Tree services inherently involve some amount of risk, as workers are tasked with performing their jobs safely in potentially hazardous conditions that can involve unstable trees, weather-related issues and high-powered equipment.
In addition, customers and clients rely on the work of arborists. Their services ensure that individuals can safely inhabit buildings and residences. If work is performed incorrectly, the results can include significant property damage. Particularly drastic errors may constitute a threat to the health and well-being of individuals in the area.
For these reasons, arborist businesses need to work with industry-savvy insurance professionals to acquire the coverage they need and that their customers demand.
Types of Insurance Needed To Start an Arborist Business
Insurance coverage helps protect against loss for tree service business income. As we explored in a separate article, tree service businesses require both general policies that would apply to any small business – but with terms pegged to industry-related needs – and specific policies unique to arborists.
Some of the more general small business insurance policies needed to start a tree service business include:
- General liability insurance.
- Commercial vehicle protection.
- Workers’ compensation support.
- Policies for protecting property.
Insurance agents who can demonstrate membership in industry trade organizations like ISA and TCIA – like the representatives at NIP Group – are likely to be more attuned to the needs of arborists. They may be able to assist entrepreneurs who are trying to start an arborist business by helping these leaders to acquire specialized protections for the field, including policies pertaining to the use of specific chemicals and equipment required in the industry.
Demonstrate Coverage With a Certificate of Insurance
Many customers will want to know that their arborist’s insurance is currently in force. To verify that protections have not lapsed, it may be beneficial to present customers with a recent certificate of insurance (COI) when bidding for a job, talking with a prospect or performing services.
Step No. 4: Market the Tree Service Business
Marketing and sales are always important business practices for arborists, but they’re absolutely essential when starting a tree service business. The specific practices that businesses undertake should align with the channels and customer details outlined in their business plans. However, it’s important to remain flexible. New arborist companies may have to update their strategies periodically until they find a formula that works for them.
There are two main categories of marketing techniques for acquiring new leads, nurturing them and converting them into customers: traditional and digital.
Use Traditional Marketing Channels To Start a Tree Service Business
Franchisees will have a definite advantage here if there is significant brand equity in the arborist franchise they’ve acquired. Business founders will have to start from scratch. They’ll want to develop a brand identity that is distinct and meaningful for their customers. Simplicity can be beneficial as long as the brand concept is memorable.
With some brand guidelines in place, tree service businesses will want to leverage traditional channels like direct mail, ad buys, door hangers, business cards and face-to-face networking.
How Digital Marketing Can Support Growth When Starting an Arborist Business
A tree service company that published an article on the TCIA website recommended that tree service companies should engage in local digital marketing so they could generate leads. The author specifically encouraged companies to use Google My Business, optimize the page, solicit reviews from existing customers and participate in other online listing services, like Yelp.
Designing a simple website with a contact form, and engaging in email marketing campaigns, can help give an arborist’s brand a more distinct personality and a greater reach. Interacting with customers and prospects on social media can also facilitate progress toward these goals.
Creating meaningful content is another way for business leaders to stand out as they start a tree service business. Think of your target customer. Imagine the kind of things they might want to learn. Then, give them that content for free. That’s the basic premise of content marketing, and it can be useful for generating organic traffic to commercial websites or for nurturing leads in tandem with automated email marketing or social media promotion.