Tree Removal Service Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Tree Removal Service Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Tree Removal Service business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
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Tree removal services are able to operate in a capacity that allows them to generate an income regardless of the state of the economy. In any economic climate and through the seasons there are always going to be trees that fall need to be removed. Additionally, many arborists will work on trees that have become overgrown and create a potential danger. As such, these businesses are always able to produce revenues not only from homeowners, homeowners associations, and property managers, but also for municipal agencies that outsource their tree removal needs to third-party companies. The startup costs that are associated with this type of business are considered to be moderate given that about $250,000 to $400,000 worth of equipment is usually purchased as a baseline startup for these businesses. Of course, these companies can be started for a lower amount of money provided that the arborist company or tree removal service works with using chainsaws and trucks rather than large tractor-trailers. The gross margins generated from services usually range anywhere from 80% to 90% depending on whether or not fuel costs and labor costs are considered to be part of the cost of goods sold. Given the economically immune nature of the revenues generated by these businesses as well as their large tangible asset base – almost all financial institutions are willing to provide a significant amount of capital support to these businesses given the strong amount of collateral. Typically, an owner operator is required to put up a 10% to 20% capital injection which is primarily used as a down payment for vehicles and equipment as well as for working capital.
As with any type of business that is raising capital, a tree removal service business plan is going to be required. This document should focus heavily on the assets that are being purchased as well as providing a three-year financial statement that includes a profit and loss statement, cash analysis, balance sheet, breakeven analysis, and business ratios page. Special attention should be paid to the balance sheet given that this is a business that is highly capital-intensive. Any lender or investors is going want to see that their investment is fully collateralized with the assets being purchased with any borrowed or invested funds. Beyond the financial information, a full analysis of the target market should be included as well. This includes an examination of the population size, population density, median household income, family income, median family value, as well as competitive issues. With any given market there is going to be ongoing competitive risks given that many of these landscaping companies also operate in a true tree removal capacity. Again, one of the ways that these businesses can become profitable very quickly is by establishing ongoing relationships with municipal agencies that want to have their tree removal needs outsourced to a third party. This usually substantially reduces the costs and risks for the municipal agency given that they do not need to employ staff to provide the service when a tree falls on the road. One of the main things that also should be noted within the business plan is a very high operating expense as it relates to workman’s compensation insurance as well as medical liability insurance. While these expenses are high, the gross margins generated from tree removal services are more than enough to cover this ongoing expense.
A tree removal service marketing plan should be developed and included as part of the business planning package. Foremost, as it relates to marketing to the general public many tree removal services will work closely with area homeowners associations in order to establish an ongoing referral relationship. Many homeowners associations will also have their tree removal service company have an ongoing contract with them so that these matters can be dealt with without having to contact individual homeowners whenever tree falls becomes dangerous and needs to be removed. A website should be developed that showcases the business, services rendered, hours of operation, preliminary pricing information, and related information to tree removal services. This website should be listed among all major search engines. A presence on social media is important but not overly necessary for this type of business. Companies like FaceBook, Twitter, and Google+ – allow businesses to maintain business profiles very similar to the website. While I imperative, it is recommended given that websites like FaceBook now allow its users to ask for recommendations in community forums. As such, once the tree removal service developed a strong brand-name print services it will be able to have people recommend the company in a social media platform from time to time. This can substantially reduce ongoing marketing expenditures as the business expands during its first three years to five years of operation.
A tree removal service SWOT analysis should be produced as well. As it relates to strengths, tree removal services are always almost always able to remain profitable for generating highly predictable streams of revenue during these fall and winter months. The capital costs associated with starting this type of business are considered to be moderate and the barriers to entry are considered to be moderately high once the business is established. For weaknesses, these companies have very high ongoing expenses as it relates to payroll, vehicle and equipment maintenance, and insurance. There are also usually a number of other competitors in any given market in regard to this type of business. For opportunities, most of these businesses are able to aggressively expand by acquiring additional tree removal vehicles and equipment, hiring additional personnel, and expanding into regional markets. For threats, there is nothing at this time that would impact the way that a tree removal service conducted operations. This is not an industry that is going be subject to automation, at least for not a number of decades, and so the ongoing marketing and operating risks associated with this business are relatively low.
A tree removal service can be a great small business investment given all the benefits of operating a high-margin base service business. The foremost aspect to becoming successful within this industry is to offer outstanding service at an affordable price. Tree removal is not something a person generally want to spend money on and so by providing the service affordably, quickly, and with minimal hassle – these businesses can thrive within any given small or medium-size market.