Making profits with tree services

July 20, 2016 -  By
Contractors entering the tree services market have a few different options.

Contractors entering the tree services market have a few different options.

Adding tree services to a landscape maintenance company is a big undertaking, but it can be a profitable one if done right.

Justin Gamester always considered his firm to be a full-service landscaping company. Offering a mixture of maintenance, construction, irrigation, lighting and snow removal services, Piscataqua Landscaping in Eliot, Maine, could handle nearly all of its customers’ needs—except when it came to tree services.

Lacking the necessary staff, equipment and expertise, Piscataqua Landscaping had to subcontract all of its tree work, which required placing its clients in someone else’s hands.

“It was really a piece of the puzzle that we were not in total control of, and we were at the mercy of someone else’s schedule,” says Gamester, vice president of the $9 million company. “Being able to offer tree services to our customers seemed like a natural fit and would allow us to be more in charge of the landscape.”

Deciding to offer tree care services can be a major undertaking for a landscape maintenance company, as the work requires certified and experienced staff, specialized equipment and costly insurance coverage. But it can be a profitable endeavor when done correctly. And it eliminates the need for clients to have to deal with other service providers. Three contractors who ventured into tree care in three different ways share the pros and cons of their experiences.

Acquiring the assets

Wanting to be in control of their clients’ tree care needs, Piscataqua Landscaping acquired a small tree and plant health care company about five years ago and changed its name to Piscataqua Landscaping & Tree Service. The company hired the tree care firm’s owner to manage the new division. The purchase also included the company’s staff, equipment and customers. But most importantly, Piscataqua Landscaping & Tree Service acquired the knowledge it needed to run a tree care division, along with all of the necessary licenses, certifications and insurance requirements.

“I think there’s an advantage if you’re able to purchase a company because you skip the step of having to find and hire the people, build the division and buy the equipment,” Gamester says. “It’s a perfect fit from a service standpoint because now we’re truly a one-stop shop. We really do it all.”

Gamester says adding tree care services made sense because the company sells this work to its existing clients. Staff members also had been noticing more incidents of tree disease and insect infestations on their customers’ properties and wanted to be able to take care of these problems instead of referring their clients to other companies. Tree care now comprises about 15 percent of the company’s service offerings, provided to a 50 percent residential, 50 percent commercial clientele.

“It’s just been a great fit,” Gamester says. “Any one of my account managers can now say, ‘While we’re here, we’d like to prune this tree,’ or, ‘You have scale on that tree.’ We can take care of it all and can service the property that much better.”

Starting from scratch

Treating trees with fertilizers and control products is one portion of Piscataqua Landscaping’s tree work.

Treating trees with fertilizers and control products is one portion of Piscataqua Landscaping’s tree work.

Jeff Bowen, owner of Images of Green in Stuart, Fla., added tree care to his service mix three years ago. The $1.6-million company offers 70 percent maintenance, 15 percent design/build, 10 percent tree care and 5 percent irrigation services to a residential clientele. Like Gamester, Bowen says he decided to add tree services because he did not like having to subcontract the work to other companies, most of which didn’t perform up to his standards.

“We had some subcontractors who just couldn’t cut the mustard,” Bowen says. “This would lead to frustrations, annoyances and bad scheduling. As time went by, customers got more annoyed when stuff didn’t go right, and that got to be troublesome on our end.”

Bowen built his tree division from scratch, hiring a certified arborist who had the knowledge and experience needed to get things rolling and hire additional staff. Bowen also took the classes he needed to become a certified arborist. He invested about $60,000 over a 24-month period on a new truck, a 22-foot dump trailer and other equipment including ropes, harnesses, chainsaws and safety gear. Bowen says his company billed about $75,000 of tree work last year, so he has not yet been able to justify the investment in adding more specialized equipment like a chipper or a stump grinder. Bowen still subcontracts stump-grinding work to a reputable third party.

Because of the risk involved with tree care work, Bowen’s accountant advised him to start the new division as a separate company, which he named Jeff’s Arbor Care, to protect Images of Green. But because Bowen says his company takes all necessary safety precautions and has not had any accidents or injuries, he saw no benefits to this structure and has since dissolved Jeff’s Arbor Care and rolled the company into Images of Green.

“Since rolling it in, we have had no issues,” he says. “I pay more insurance on my tree guys than on my maintenance guys, and I feel that my insurance covers me if something were to happen.”

Bowen says that adding a tree division hasn’t been easy. His company is often outbid by low-balling competition—and pruning an overgrown palm tree can be labor intensive. But it has helped improve client communication and keep jobs on schedule. The addition of tree work also has eliminated the need for his existing clients to have to find another company to fulfill those needs.

Regardless, Bowen is not convinced that adding tree services to a landscape maintenance company is the best move for everyone. He says the most successful companies he’s seen are the ones that offer tree work exclusively, which Bowen says can be more profitable than maintenance.

“Tree work is a whole different animal,” he says. “In the little volume we’re doing, it’s working well for us. But if I compare the same hours and dollars in maintenance work, I’m making more doing trees. If I found myself generating more tree work every year, I might think about doing less maintenance, quite honestly.”

Going all in

Josh Skolnick started out as a landscape maintenance contractor, offering everything from mowing to lawn care. But lacking the proper equipment, staff and insurance, his company had to subcontract all work on trees taller than 15 feet. Skolnick became interested in the idea of offering tree care—and was particularly interested in what tree companies could charge for a few hours of work.

“We would bring in third parties that would bill customers directly, and I was always intrigued by the dollar figure,” Skolnick says. “We would mow a lawn 26 times a year and not make as much as a guy taking out one tree.”

In 2007, Skolnick sold his maintenance company to focus on other endeavors but continued to receive calls from former clients requesting tree work.

In 2008, he removed a tree for a former client as a favor using a contract climber and, in the process, sold $20,000 worth of work on that customer’s street alone.

Knowing he was onto something good, Skolnick founded Monster Tree Service in June 2008. He learned the ropes by “trial and error and by investing in the personnel to get the company where it is today.”

Monster Tree Service, headquartered in Fort Washington, Pa., is now a franchise with 31 locations throughout the U.S., offering 70 percent general tree services and 30 percent plant health care services to a 95 percent residential, 5 percent commercial clientele. Monster Tree Service’s annual system revenue is more than $10 million.

Monster Tree offers a franchise conversion program to guide landscape maintenance contractors through the process of adding tree services to their repertoire. This program includes helping them determine the proper certifications, licenses and insurance coverage required for their region; financing the necessary equipment; and providing sales and marketing systems.

It makes sense for maintenance contractors to expand into tree care services, Skolnick says, because they’re already on clients’ properties several times throughout the growing season and have the opportunity to upsell the work. But, perhaps more importantly, tree work can be very profitable.

“Existing clients are typically loyal,” Skolnick says. “If their landscape contractor can perform the services quoted to them by an outside party, they are more likely to go with their contractor.

“In my personal experience, contractors who go through a conversion and enter tree care will end up dissolving the landscape work they are doing,” he adds. “As the tree side grows, they see more profits generated through tree care than landscaping, and they begin to transition the company over to being a tree care provider. Getting into the tree industry is a higher risk but a higher reward.”

Photos: Monster Tree Service, Piscataqua Landscaping & Tree Service

About the Author:

Emily Schappacher is a freelance writer based in Cleveland.

1 Comment on "Making profits with tree services"

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  1. Joe Fearn says:

    This is an interesting article about adding revenue streams in sync with your core business. As an ISA Certified Arborist myself, reading that the companies saw the importance and value of adding/maintaining Certified Arborists was important.

    Respected credentialing adds upward pressure on compensation for the employee, but also in ability to generate revenue from customers.

    Good article. Thanks, JF