BUSINESS OPPORTUNITIES: The Tree Care Treatment

People are passionate about their trees, certified arborist Sam Hill has learned from his clients. Take the homeowners who treasure a red oak their son cultivated in a milk carton as a Boy Scout and eventually planted in the yard.
 
“With trees, they may not just be aesthetic, they may be sentimental,” says Hill, president of Sam Hill Tree Care in Dallas. “Most people want to take care of their trees.”
 
The emotional appeal is one reason tree care is an attractive business opportunity for lawn and landscape contractors. The profit potential is another. Consider the 55 percent profit margin Hill earns from his firm’s plant health care division, which includes tree fertilization and insect and disease management. This service makes up about a quarter of his company’s near-$1 million revenue. The other 75 percent is tree maintenance, which includes pruning, stump grinding, tree removal and other services.
 
“Plant health care is a really good service to provide, especially for a lawn maintenance business that’s out on customers’ properties on a weekly basis,” Hill says. “That makes adding it even better because there’s a pair of eyes on the trees every week.” Many companies are looking to sell more, profitable services to their customer base, and plant health care (PHC) is a profitable, often easy-to-sell add-on.
 
Another reason tree care can be a natural fit for green industry firms is many companies, especially those providing lawn care services, already own some or most of the requisite equipment. For example, Hill’s firm uses a mix of methods, including foliar spraying, soil injections and trunk injections to treat various pest problems and nutrient deficiencies.
 
Foliar spraying, one method used for applying tree care products like pesticides and horticultural oils, requires a hydraulic pesticide sprayer, which many lawn care companies already own. For those that don’t, they can purchase a self-contained skid-mounted sprayer for between $3,000 and $4,000, Hill says. “It’s a nice way to start because you can put it in the back of a truck or in the back of a trailer.” There’s a wide range in price for other sprayers, like truck-mounted, power take-off-driven sprayers, which can cost more than $10,000. Lawn care companies that already have hydraulic sprayers should remember they need a dedicated non-herbicide tank for their tree care services, Hill says. Lingering herbicide residue could damage a tree.
 
Soil injections, used for applying fertilizers and pesticides, are performed using a soil-injection probe connected to a tank by a pressurized hose. Contractors with spray tanks can use the same one for soil injections, and only need to purchase the soil-injection probe, which is available for about $300 from a spray equipment distributor.
 
For trunk injections, contractors have several options including two types of microinjection (low-pressure or high-pressure) and macroinjection.
 
Tree care professionals use microinjection to tap into trees’ vascular systems to apply insecticides, fungicides, fertilizers, micronutrients and plant growth regulators. Low-pressure microinjection requires a cordless drill and a rubber or plastic-faced mallet (all of which should cost less than $100). The start-up cost for a high-pressure microinjection system, which requires a syringe-like direct-inject tool, is about $600.
 
Macroinjection requires drilling a hole more than 3/8   of an inch in diameter and distributing 30 to 60 gallons of material into a tree. It’s often used to treat diseases, especially high-profile ones like Dutch elm disease and oak wilt. The equipment needed includes a tank, plastic tubing and tees, which technicians insert into the holes they’ve drilled by lightly tapping them with a mallet. A set of equipment should cost about $300.
TRAINING TIPS. While equipment is essential to get the job done, contractors interested in plant health care will discover that gaining the diagnostic and application skills will be the greatest investment they make. “If you make a mistake on a lawn, the customer won’t be happy, but you could re-sod it and they’d have another lawn in a few weeks,” Hill says. “If something happens to a 100-year-old tree, there’s probably going to be litigation. People are passionate about their trees, so you should get as much education as possible so you can avoid misdiagnosis and misapplication.”
 
On the diagnostic level, training in ornamental integrated pest management (IPM) is necessary, but nothing compares to having a staff member certified by the International Society of Arboriculture (as either a certified arborist or a board-certified master arborist). These designations ensure the professional is knowledgeable in diagnostics and treatment of tree problems, fertilization and other issues. “The industry has done a good job promoting that certification, and a lot of customers will ask if you’re certified,” Hill adds.
 
Industry associations like the ISA and the Tree Care Industry Association also provide continuing education for tree care professionals. “I would also recommend, even though I’m down in Texas, the University of Maryland’s Advanced Landscape IPM PHC Short Course,” Hill says. “My plant material and climate are different, but I was able to adapt the information.”
 
Applicator training is typically done in-house at Sam Hill Tree Care, although the company also sends technicians to training sponsored by the Texas Cooperative Extension and other local sources. Because tree care technicians handle pesticides, they are required to have up-to-date pesticide applicators’ licenses. Manufacturers of tree care products also conduct training seminars, which are particularly helpful if the specific product requires its own application technique.

SERVICE SETUP. Tree care divisions can take various shapes within companies. At Sam Hill Tree Care, the PHC division runs two one-man crews. Each technician has the potential to generate between $180,000 and $200,000 in revenue annually, Hill says. Since 1999 the division has averaged 20 to 50 percent growth each year, and Hill shoots for a 55 percent net profit on all services in this segment. “We’re able to hit this number because it’s just one man and a truck,” he says. “Our pruning crews require three men, a large truck and a chipper plus tons of liability. We promote PHC as much as possible and use pruning to get in the door.”
 
Other firms set up the service differently. Some cross train their lawn care applicators to perform both tree and lawn services on their routes. Others use tree care as an advancement opportunity for their lawn applicators, promoting excellent, detail-oriented technicians to their own PHC routes.  
 
Hill conducts most of the company’s sales by going out to visit clients’ properties, doing walk-throughs and employing his PHC and IPM knowledge. In addition to listening to a client’s concerns, he identifies possible key pest problems that may pop up in the future. “Sometimes you just have to be honest and say we might not have a solution,” he says. “It might not be the right plant for the right place. It may be better off to remove and replace it.”
 
In tree care sales, educating the client is necessary because they’re usually unfamiliar with application techniques and materials. Hill says one challenge is remembering that competing companies may take different approaches to plant health care. “Because tree care is not the client’s specialty, it’s hard for them to differentiate what’s a good, valid service and what may not be.” As such, Hill makes it his priority to stay on top of research and resources available in plant health care. “We will often quote or provide copies of research articles just to enhance our credibility and show we are recommending a treatment that’s beneficial to the tree.”
 
Another reason education is essential is how infrequently the services occur throughout the year. “With lawn spray services, you’re doing herbicides, preemergents, fertilization – all on a six- to eight-week schedule,” Hill says. “You may be doing tree care once a quarter.”
 
Infrequent applications can cause customers to get out of the tree care mode. Fewer applications can lower a client’s perceived value and cause them to discontinue service, Hill says.
 
“A really good way to overcome this is to sell the entire year at once,” he says. To sweeten the pot and boost cash flow, Hill recommends offering a pre-season discount for customers who pay upfront.
 
In addition, Hill recommends  companies set an expectation when they make the initial sale. Part of his company’s proposal and contract includes a space for Hill to specify what time of the year the application will take place. For example, Hill would advise clients that horticultural oil sprays and imidicloprid treatments take place from mid-December through early March; foliar pesticide spraying takes place during the growing season, usually late March through early September; and fertilization may take place year-round.
 
When it comes time for an application, a receptionist calls clients to set up appointments for the technician’s visits. “At this time we try to educate them about what the application is,” Hill says. This phone call doubles as an operational tool to ensure technicians’ jobs run smoothly. “We ask them to put away children’s toys, leave gates open for us and if the tree is in the backyard not to have cars parked under it,” Hill says. If the customer hasn’t been compliant, applicators are trained to pick up toys, cover non-removal items with tarps and request that cars be moved, if possible. “But sometimes we just have to reschedule,” Hill says.

PRICING POINTERS. Careful job costing has allowed Hill to designate a set price to each different task based on what type of pesticide, fertilizer or nutrient is used. Each type of application is priced according to the size of the tree being treated and type and amount of product being used. For a fungicide being sprayed, Hill estimates the size of a tree’s crown to decide how many gallons of product he’ll use, and then he charges a per-gallon price, which accounts for labor. “You have to have good numbers for this way to work, but it’s very effective,” he says, noting internal time studies are a good way to get this information. “You need lots of good data on how long it’s going to take you to perform the service and what your material cost is.”
 
The wide variety of material costs is what makes “good numbers” essential, Hill says. For example, horticultural oils, which are highly refined petroleum oils combined with an emulsifying agent, are rather inexpensive (about $3.50 per gallon). Fertilizers are about $40 per 30-pound bag. Fungicides, however, can cost as much as $400 per gallon.
 
For example, the insecticide imidicloprid is applied by diameter inch. An imidicloprid soil injection on a 12-inch-diameter tree would take about 20 minutes, including mixing time. The insecticide comes in 1.6-ounce water-soluble packets, which can be mixed to treat 24 diameter inches, or two 12-inch trees. “We’ve figured out that for our chemical cost, labor and profit, the price is $3 per diameter inch,” Hill says. “To estimate, all we have to do is go out and measure a tree. A 12-inch tree would cost $36.”
 
MARKETING METHODS. When Hill started his business, marketing was one roadblock. After trying all of the “conventional” methods like the Yellow Pages, direct mail and local newspaper and magazine advertising, Hill found he just wasn’t getting the high-end residential customers he was looking for. “I regret the amount of money I spent not getting the clients I wanted,” he says.
 
He knew referrals were the answer, and has since created an informal relationship with a reliable neighborhood nursery. “People go with their plant problems to local nurseries they trust,” Hill says. “The nursery could probably sell them a bottle they could spray themselves, but many people don’t have any equipment and aren’t comfortable doing it. It’s great to have that nursery refer them to you.” Does he compensate for the leads? “We just send them business in return and most of the time they want to take care of their client, so they’re happy to refer them to someone they can trust. And they know their client will come back to someone who gave them good advice.”
 
Other than referrals, Hill spends less than $3,000 annually on marketing, including about $500 on Web site maintenance and $1,600 total for four postcard mailings per year. “We have a small, one-line Yellow Pages ad now,” Hill says. “We do no marketing in newspapers. It’s all about word-of-mouth.”