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For a successful tree business startup, you are looking at costs of between $10,000 and $50,000. Now this is not a definite figure but it is a guide and depending on how you approach your start, these cost can vary dramatically, take for example you have the budget and you buy all new equipment truck, Shredder, a few chainsaws and your at 50,000 before you’ve even worked out how your getting your first customer.
Unless you’ve spent the last twelve months researching your idea and you have a budget that you can afford to loose, my advice is not to start this way.I believe in the lean approach to business startup, that is only buying what you need when you need it and managing with what you have until you can’t any longer as well as measuring you progress as you go.
This approach is the most reasonable but however my experience tells me when someone who is tech conscious and loves tools, equipment etc, they will always purchase when they can and this can lead some startups into trouble down the road when the hit a rough patch.
Manage with what equipment you have and if you don’t have it, buy it second hand or hire it out until you are in a position that your work will pay for it without any stretch.
The more planning and research you do and preparation for difficulties, the better prepared you are for the challenges ahead, the only other alternative is to waste your money getting it wrong so can learn what you could have prepared for initially
Firstly, you have to find a good location for your office and paperwork, maybe in the house in a quiet room, if you already have an external building, great. You may need to buy some basic equipment necessary for the job.
All these costs will always be more than you think it will. So, it is better to start planning your business first and create a 2-3-year business plan and cash flow. This would help you know where you lie financially and what you have to achieve with only that amount.
When comes to talking to tree experts about developing a plan, they can start to get bored and can come up with amazing excuses to avoid such, however process of planning is not to plan for the sake of it but to force you to think through the problems you will have to deal with down the road, you may even be grateful for having to do it because after a few weeks of planning you realize that this business isn’t going to work at all.
I have been there myself in the past with projects that without sufficient planning would have started and failed and cost me a lot, this process minimize that possibility. If I have not convinced you about the importance of this step, before you go ahead, then just do one thing for me, read the E-myth book by Michael Gerber, a lifetime of advice for just over 10 dollars.
The startup owner must never compromise on these four things at any cost. He/she should memorize the key elements because, without them, there would be no successful tree service business.
In order to start a tree removal service business, you need to have proper knowledge about the industry and mainly about tree removal itself. You can’t just ask for people`s money for removing trees which is something you haven’t done before.
You need to have field experience and familiarize which new industry practices.
Dealing with heavy equipment and tools is not as easy as it sounds.1 (See Resource List At End of Article) You need to have a the proper certificates for chainsaw to use them in many states. I realize this is pointing out the obvious but you or one of your future employees can get seriously injured if not careful while using equipment, why I say this is because, remember, your the boss now, if you don’t get to work, who does if you’ve been injured?
Putting a safety program in place helps you deal with that now rather than after someone gets injured. What ever time it takes up, its worth it minimizing the procedures you will go through after dealing with an injury.
Get advice on how to implement the best onsite safety and keep those rules in place. Get some expert advice in site safety apart from the basic safety use for equipment etc such as chainsaws, these are covered in your training that you’ve probably all ready completed. You have to ensure on a daily basis that your equipment is not broken or damaged and works absolutely fine so that it won`t cause any harm to the user.2
There is absolutely no room for mistakes and shortcuts in the job of tree removal. What you need to do as a business owner is to protect all your business resources and assets using a business liability policy 3. Even with all the safety precautions and measures4, no safety is guaranteed. Accidents can happen and they will at any time. The policy would help you cover any damages that are caused by an accident on the customer`s property.
Reputation is everything a business has. Without it, there would be no stable business to run. The thing that would differ you from other business in the industry is your reputation. People usually go to the tree services that have a good background reputation and have happy customers. Try your best to serve your customers in the best possible way.
Develop a Business Plan
Many tree service businesses fail every year and the foremost reason behind it is that they don’t develop a business plan in the start. A carefully designed business plan can help you establish your business`s framework, structure, and roadmap. You need to set your mission straight before starting any business. If you don’t, your business would not probably last for more than a year because of the detrimental decisions. Try answering the following questions before you start,
You can learn how to create a business plan from the link provided5.
Registration from starters
For starting a new business, one needs to register their business name and obtain a business license. The main purpose of registering is to prevent any other person from using the same name. No one wants to share their name after putting a lot of effort in their business`s reputation. So, protecting your business name is important. Every state has its own procedures and requirements. The things asked for registration 6 are as follows
It should be noted that if the application payment is not made within
10 days of time, then your application will be canceled and you would have to go through the procedures again. Also, make sure you do some research on whether the name is already in use by someone else or not because if it is being used then you would lose all your application fee and the application would be canceled. Whatever name you pick it should be available on the web address and should be easy to remember.
However, there are generally 3 ways of doing it,
It is probably the easiest way to register a business`s name and is used if you have a sole proprietorship. You just have to file a DBA with your state and it takes less time.
It generally requires you to form an LLC7 or corporation for your business which will register the name of your business with the state automatically. The state makes sure that the name is not already in use. By incorporating your tree removal service business, you become a shareholder in the corporations and your liability is limited to the amount you invested in the business. It is generally a safe way of doing business.
If you are not satisfied with the security of your business by just registering the name, then you can also register a trademark with the U.S. Patent and Trademark Office (USPTO) 8. It is a higher level of security which will protect your brand in all 50 states.
File for Tax Identification Number
The next thing you need to do is file for Tax Identification Number from the IRS. Once you register your tree service business with the state then you will receive a local tax identification number.
There are several types of Tax Identification Numbers, some are:
This Federal EIN Number is used to identify a business entity and is required for the business employers, corporations along with the partnerships. The link is provided to apply for a Federal Employ Identification Number. 9
Sales Tax Id is issued by the state in the form of a legal document. It is also known as Sales Tax Exemption Certificate. It allows your business to collect the necessary sales, to issue sales tax exemption documents and use taxes. 10
It is a state specific Tax identification number11.
Open a Bank Account
In order to make large purchases of equipment and to keep your business money in safe hands, you would be required to open a bank account, particularly for the business.
Get training, licenses, and permits
The only way to tell your customers that you are serious and responsible in what you do is by getting proper training certificates, get a tree service license and permits of the state. Get a certificate in safe chain saw use through your any nearby local community college. You can study on how to become an arborist 12 from International Society of Arboriculture 13 and also get accredited from either ISA or TCIA14.
As mentioned earlier in the guide, it is very important that you secure your business assets to avoid any problems later. Check what are the basic licensing requirements of your state. A business is full of high risks15 so make sure you have the public liability insurance16 along with the disability insurance for yourself and your employees. You will be needing it to cover all the employees you hire for the job of tree removal. You would also require it to provide for the employees in case of any injury or accident during the job. Learn more about insurances in the link provided17.
Consult Professional Services
Lawyer, and Accountant. It is important that you and your business comply with all the local laws. Again you will have to draw your own conclusions on that level you bring on these professional services at the beginning, I realize its a start up but all businesses are a legal entity and the better your business is represented, the better for you but you can minimize these services initially especially if your budget does not allow. You can always get advice from a family friend who is specialized that could give you advice and representation at a reduced cost.
You can also finalize and approve your business structure or framework from him. All your license and permits need to be secure.
Buy resources & Equipment
Starting a tree removal service requires various kinds of resources and equipment. You would have to make the necessary purchases at the very start of your business because, without them, no work can be done. Remember that the equipment is quite costly so you can apply for the business loan as well incase needed. The items are:
It is the most important way of attracting new customers and satisfying the existing. Make sure that you know what the price ranges are in the tree removal service industry and you charge your customers based on that i.e. not so high and not so low. People always go for tree companies with lower charges and good services.
The key to attracting clients is by marketing, advertising and promoting your tree removal business. Marketing strategies 18 must also be set straight when making a business plan and before starting the business. All the publishing and printing of poster requires money too. So, proper estimates need to be made to avoid problems.
You can advertise about your tree removal business startup by sending out flyers to the community and publishing about the business in the local paper.
You can also develop your very own business card for advertising purposes.
Hire a Web Developer to create a simple website for your business. It would help people to know the services you provide, service packages, how to contact you and to read the customer`s feedback. Some online website makers are:
Design a logo for your tree removal business so that people can recognize you.
You can even work with the popular contractors in your area for starters or any other utility company. You can do the tree removal service for them until you get a client of your own. And when you do, make sure you leave a good impression and provide them your best services.
Usually, there are multiple tree removal services in a particular city or state. So, before you decide to open up a business of your own, observe your competitors, know their strategies and how they have positioned themselves in the market, how they get their business and where there leads come from and what areas they cover and are dominant in.
A simple way to check competitors that are competing for an area or city is Goolge “Tree Removal Services City” put this into the search bar and see who is listed in the first page of Google, these are the top ten listings and primary competitors for example:
For more advice on how to spy on your competitors, check out this article here on tools you can use to evaluate other competitors websites. How to spy on your competitors There are number of directories as well online that can help you get who’s listed, you can search them or also you can start with the two below:
What makes your tree removal business better from the rest? It is important to answer that while running a business in such an industry. Because if there is nothing that distinguishes you from them then there is no point of running a business. One business must have a competitive advantage over the other business in the same industry. This helps the business to flourish and attract more customers. 24
How to gain competitive advantage
One simple way to start thinking about competitive advantage is to identify what are the questions customers keep on asking initially or what is there most prominent question and concern that maybe on their mind, safety, cost, how long to get there, whatever it is, make this your business goal and advantage.
Chat with Successful entrepreneurs and business owners
You maybe familiar with the saying “standing on the shoulders of giants” this refers to other experts that have done it before worked out out and have the knowledge, source it and learn from them.
It is always considered as a better approach to just go and talk to some of the experienced entrepreneurs in the similar business.
They can advise and warn you better about things that no one else can. It is safer to follow their lead and run your business. No local competitor will be willing to give you advice because no matter what you think, they will remain your competitors. Hence it is better to consult the tree removal businesses outside the country.
Learn about the Field Industry & Keep Learning
The key is to always keep learning more and more about the industry, Arboriculture and the field. By every failure, you would learn how to better run a business and you will keep learning till the very end. Keep in touch with all the new procedures, methodologies and the tree removal business world.