How to start a tree cutting business: branching out on your own

Starting a tree cutting business can be a rewarding venture, blending hands-on skills like arboriculture and safe equipment operation with sharp business savvy. It's a multi-billion dollar market with steady demand for tree care from residential homeowners, commercial properties, and local municipalities.

This guide will take you through the practical steps of acquiring the right equipment, obtaining necessary licenses, securing funding, and building your team to help you launch a successful tree cutting business in the U.S.

Step 1: Plan your business and validate your idea

Your first move is to gauge local demand. You can do this by monitoring community forums like Nextdoor for tree service requests or by networking with local landscaping companies that might subcontract work. This gives you a real-world feel for the market.

Analyze your local competition

Use Google Maps to find nearby tree services. Look at their service offerings, customer reviews, and service areas. Many new owners only focus on large companies, but solo operators are often your direct competition for residential jobs, so do not overlook them.

You can also check the Tree Care Industry Association (TCIA) member directory to identify established professionals in your region. This helps you understand the competitive landscape you are about to enter.

Calculate your startup costs

Now, let's talk about money. Startup costs typically range from $15,000 to over $60,000. The biggest variable is whether you purchase new or used equipment. A thoughtful budget now prevents financial strain later.

• Chipper: $5,000 (used) - $25,000+ (new)
• Stump Grinder: $3,000 - $15,000
• Chainsaws & Safety Gear: $2,000 - $5,000
• Truck & Trailer: $5,000 - $20,000+
• Insurance & Licensing: $1,500 - $4,000 (first year)

Here are 4 immediate steps to take:

• Map all tree service companies within a 20-mile radius using Google Maps.
• Create a detailed startup budget with both high and low estimates for equipment.
• Contact two local landscaping companies to ask about subcontracting opportunities.
• Browse the TCIA member directory for your state to see top competitors.

Step 2: Set up your legal structure and get licensed

Choose your business structure

Most new tree service owners form a Limited Liability Company (LLC). This structure protects your personal assets, like your house and car, if the business faces a lawsuit or debt. It is a safeguard you do not want to skip by operating as a sole proprietor.

An LLC also offers tax flexibility. Profits pass through to your personal tax return, which avoids the double taxation of a C-Corporation. You can file for an LLC with your state's Secretary of State for about $50 to $500, with processing taking a few days to several weeks.

Secure the right licenses and permits

First, get a free Employer Identification Number (EIN) from the IRS website. You will need it to open a business bank account and hire staff. Next, check your state's requirements. Some states, like Connecticut, require a specific Arborist License which involves an exam and fee.

Do not forget local rules. Your city or county clerk's office will issue a general business permit. Also, be aware of industry bodies like the Occupational Safety and Health Administration (OSHA), which sets mandatory safety standards for all tree care operations.

A frequent misstep is not checking local permit needs for each job. Some cities require special permits for wood disposal or temporary street closures. Always confirm these details beforehand to avoid fines and project delays. A quick call can save a lot of trouble.

Here are 4 immediate steps to take:

• File for an LLC with your state's Secretary of State.
• Apply for a free Employer Identification Number (EIN) online via the IRS.
• Research your state's arborist licensing requirements on its official website.
• Call your city clerk's office to ask about general and job-specific permits.

Step 3: Insure your business and manage risk

Your first policy is General Liability insurance. This covers property damage and third-party injuries. A low-coverage policy is a frequent misstep. A single accident can easily exceed a $500,000 limit, so you should consider a policy with $1 million to $2 million in coverage. Expect annual premiums from $2,500 to $7,000.

If you hire even one employee, you must have Workers' Compensation insurance. It covers medical bills and lost wages if a team member gets hurt. This protects your business from expensive lawsuits related to job site injuries, a significant risk in this industry.

Also, you need to cover your assets. Commercial Auto insurance is for your truck, while an Inland Marine policy protects your equipment like chippers and chainsaws. This second policy covers your gear whether it is at a job site, in transit, or at your shop.

Find a specialized insurance agent

You might want to work with an agent who understands the tree care industry. General agents often do not grasp the specific risks, like accidental power line contact or damage from falling limbs. Look for providers like ArborMAX or TreePro, or ask larger carriers like The Hartford about their arborist programs.

Here are 4 immediate steps to take:

• Get quotes for a $1 million General Liability policy.
• Contact an insurance agent who specializes in tree care services.
• Ask potential agents about an Inland Marine policy for your equipment.
• Request a Workers' Compensation quote if you plan to hire employees.

Step 4: Secure your location and equipment

Find a suitable base of operations

You will need a yard to store your truck, chipper, and other gear. Look for properties zoned for light industrial or commercial use. Your local planning department can provide a zoning map. A residential address is not a long-term solution due to noise and vehicle traffic.

A quarter-acre lot is a good starting point. This gives you enough space for a truck, a trailer, and equipment storage. When you negotiate a lease, you might propose a one or two-year term with an option to renew. This provides flexibility as your business grows.

Purchase your core equipment

Now it is time to acquire your main machinery. You can find new equipment from dealers like Vermeer and Bandit. For used options, websites like Machinery Trader and TreeTrader are valuable resources. This approach helps you balance cost with reliability.

A frequent mistake is to buy equipment that is too small to save money. This often backfires when you land bigger jobs. A 12-inch capacity chipper, for instance, offers more versatility than a 6-inch model and helps you avoid turning down profitable work.

Here are 4 immediate steps to take:

• Review your city’s zoning map for light industrial or commercial lots.
• Contact a commercial real estate agent to find quarter-acre to one-acre yards.
• Compare prices for a 12-inch chipper from a dealer versus a used model on Machinery Trader.
• Ask a potential landlord about a two-year lease with an option to extend.

Step 5: Set up your payment processing

For most jobs, it is standard to require a 50% deposit to book the work, with the balance due upon completion. This practice secures your schedule and covers initial costs like fuel or equipment rental. Make these terms clear in your written estimate.

While you can accept cash or checks, many clients expect to pay with a credit card. Not offering this option can sometimes cost you the job. You will need a payment processor to accept card payments securely.

Choose a payment solution

For a business that needs to accept payments on-site, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and you are done.

Many processors charge 2.5% to 3.5% plus other fees. At just 1.99% per transaction with no hidden costs or extra hardware needed, it is particularly useful for collecting deposits immediately after a client accepts your quote. Getting set up is straightforward:

• Get Started: Download the JIM app for iOS.
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds: Your money is available right on your JIM card as soon as the sale is done, with no waiting for bank transfers.

Here are 4 immediate steps to take:

• Decide on your standard payment terms, such as a 50% deposit.
• Download the JIM app to explore its features for on-site payments.
• Draft a short payment clause to include in your customer estimates.
• Compare JIM's 1.99% rate against two other payment processors.

Step 6: Fund your business and manage finances

SBA loans are a common starting point. The 7(a) loan program is popular, with tree service startups often seeking between $50,000 and $350,000. You will need a strong business plan and a personal credit score above 680 to have a good chance of approval.

You might also consider equipment financing. It can be easier to obtain because the machinery serves as collateral. Lenders may finance 80-100% of the cost. A frequent misstep is accepting the first offer, so you should compare rates from at least two providers to avoid high interest.

Estimate your working capital

Beyond equipment, you need cash for daily operations. Plan to have three to six months of working capital set aside. This fund, typically $10,000 to $25,000, covers insurance premiums, fuel, and marketing costs before your revenue becomes consistent.

Here are 4 immediate steps to take:

• Contact your local Small Business Development Center (SBDC) for free help with your loan application.
• Request equipment financing quotes from two different lenders.
• Calculate your estimated operating costs for the first six months.
• Open a separate business checking account to keep finances clean from day one.

Step 7: Hire your team and set up operations

Build your crew

Your first hire will likely be a Groundsperson. This person handles debris removal and feeds the chipper. Expect to pay between $18 and $25 per hour. Many new owners hire someone without any industry experience, which can slow down jobs and create safety risks.

Your second key hire is a Climber. This role requires significant skill and carries more risk. A certified Climber can earn $25 to $40 per hour or more. You should verify their International Society of Arboriculture (ISA) certification, as this demonstrates a professional standard of knowledge.

Streamline your daily workflow

With a team in place, you need to manage jobs efficiently. You might want to use scheduling software like Jobber or ArboStar to handle quotes, scheduling, and invoicing from your phone. This keeps your operations organized as you grow.

As for revenue, a lean two-person crew often targets over $200,000 in annual sales. A good rule of thumb is to keep your total labor costs around 30-40% of your revenue. Also, ensure every employee completes an OSHA 10-hour safety course before their first day on a job site.

Here are 4 immediate steps to take:

• Draft a job description for a Groundsperson with a clear pay range.
• Search the ISA database for certified arborists in your service area.
• Sign up for a free trial of a scheduling software like Jobber to see its features.
• Find a local provider for OSHA 10-hour safety training courses.

Step 8: Market your business and get customers

Establish your digital storefront

Your first move should be to create a free Google Business Profile. Fill it out completely with photos of your equipment and team. This is often the first impression a potential customer has of your business.

Next, you might want to build a simple website using a service like Squarespace. It acts as a digital brochure. Focus on showcasing your services, service area, and clear contact information. This adds a layer of professionalism.

Go direct to your customers

Door hangers still work well in this industry. You can expect a 1-2% response rate in targeted neighborhoods. A good time to distribute them is right after you finish a job in the area, when neighbors can see your work.

Many new owners underestimate the power of local ads. A small Google Ads budget, maybe $300 to $500 per month, targeting phrases like "tree removal [your city]" can generate immediate calls from people who need work done now.

You can also build relationships with local real estate agents and property managers. They frequently need tree work for listings or managed properties. A simple introduction can lead to a steady stream of referral work.

Here are 4 immediate steps to take:

• Create and fully populate your Google Business Profile.
• Design a door hanger and get quotes for a print run of 1,000.
• Make a list of five local real estate agents to contact.
• Set up a simple one-page website on a platform like Squarespace.

Step 9: Price your services and create quotes

Most tree work is priced per job, not per hour. Your quote should reflect the job's complexity, risk, and time. For a standard tree removal, you might estimate your crew's time, fuel, and disposal fees, then add your markup.

Set your profit margin

You should aim for a gross profit margin of 35% to 50% on each job. For example, if your direct costs for labor and fuel are $600, a quote of $1,000 gives you a 40% margin. This covers overhead like insurance and marketing.

A frequent mistake is to compete only on price. This strategy is not sustainable. Instead, justify your rates with professionalism, proper insurance, and high-quality work. Clients often pay more for peace of mind.

Create detailed quotes

Your quote is a sales document. It should clearly outline the scope of work, including what will be done with the wood and debris. Specify the total price and your payment terms, such as a 50% deposit to schedule.

Here are 4 immediate steps to take:

• Call three local competitors to get a quote for a hypothetical tree trimming job.
• Calculate your target hourly rate by combining labor, fuel, and overhead costs.
• Create a professional quote template that details the job scope and price.
• Set a target gross profit margin between 35% and 50% for your services.

Step 10: Maintain quality and scale your operations

Set your quality standards

As you grow, maintaining quality is everything. You can pursue TCIA Accreditation for your company. This signals a high level of professionalism and safety to clients. It is a step beyond individual ISA certifications.

You should also track key metrics. Aim for a customer callback rate under 5% for fixes. After each job, send a simple survey. This feedback helps you spot issues before they become patterns.

Know when to expand

Many owners expand too quickly, draining cash. A good signal to hire is when your lead crew is consistently booked three weeks out. This shows you have enough demand to support another person or crew.

When you hit $250,000 in annual revenue with one crew, that is a solid benchmark to start planning for a second. You can also use software like Jobber or ArboStar to track job profitability, which helps make expansion decisions based on data, not just gut feelings.

Here are 4 immediate steps to take:

• Research the TCIA Accreditation process for your business.
• Create a simple post-job customer satisfaction survey.
• Set a booking threshold, like being three weeks out, as your trigger to hire.
• Review ArboStar's features for managing a multi-crew operation.

You now have a solid roadmap for your tree cutting business. Remember that your reputation for safety and professionalism will be your strongest asset. The demand is there, so take these steps with confidence and build a business that lasts.

And as you land those first jobs, make sure getting paid is simple. JIM lets you take card payments right on your smartphone, with no extra hardware and a flat 1.99% fee. Download JIM and get your cash flow moving from day one.