TREE CARE: Arbor Add-Ons

It made perfect sense when Dick Bare decided to add tree care services to his successful lawn care business. Customers increasingly want comprehensive, one-stop-shop service, he reasoned, and wedding tree care with lawn care seemed a smart, lucrative and strategic business move.
 
“It looked like a similar business, and we felt like we already had the technical know-how,” says Bare, president of Arbornomics in Norcross, Ga. “But when you start these ancillary businesses, it’s completely new. Just because you’re a good dentist doesn’t mean you will be a good foot doctor. That’s how different they are.”
  
Instead of a model of financial success, Arbornomics serves as a cautionary tale for lawn care and landscape businesses pondering growth into the tree care realm.
 
Not long after starting the tree care division, an accident meant facial/cranial surgery for an Arbornomics crewmember, combined claims of $1.5 million and the need for a significantly more expensive insurance risk category for the tree care division and the lawn care division. Arbornomics would have been pushed out of business; instead, Bare sold the tree care division at a loss. 
 
So are lawn care and landscape businesses seeking to expand into tree care doomed to fail? Not so fast. Arbornomics’ story is one possibility of what can happen when companies expand in this way; many others have found success. To be a success story, companies must know why expanding is smart. They need to fully understand the intricacies of the industry segment into which they’re entering: the particulars on specific tree care tasks, what customers are looking for, insurances and licensing issues, expenses and education needs. 
 
“It’s very risky getting into ancillaries,” Bare says. “You have to remember that just because you’re successful at lawn care, it doesn’t always translate to being successful in tree care. I learned the hard way.”

A Business Proposition. Why consider expansion into tree pruning, transplantation/removal and chemical treatment? For some, it comes down to the idea of full service, and giving customers what they want.
 
“Customers value it, and they expect it,” says Maurice Dowell, president of Dowco Enterprises in St. Louis. Founded in 1978, the company added tree care services in 1993. “If companies are going to tout themselves as full service, they have to have that tree specialization in their arsenal. Then customers can be secure the company can provide for all their needs.”
 
Expanding into tree care also seems a sure way for a solid, ongoing work cycle. Owners often believe that diversifying will protect them during slow periods. Some companies also think that tree care as part of their offerings will give them a leg up on the competition.
 
The most compelling reason for adding tree care services may be the rich profit opportunities. Owners attest to that truth.
 
“I can say especially for the herbicide and insecticide end, it’s worth going into the business,” Dowell says. “Sales wise it will add to the revenue stream. The biggest part is it will add tremendously to your bottom line.”

What It Takes. Ken Celmer, senior vice president at The Davey Tree Expert Co. based in Kent, Ohio, says a tree care division typically offers ornamental pruning, shaping and thinning, as well as routine trimming. Stump grinding is another potential offering. In these areas customers seek beauty, curb appeal and safety. They’re looking for expertise and creative ideas to help their property retain the highest value it can and they feel they’ve received value from companies with arborists or individuals with horticultural backgrounds on staff.  
 
In addition, tree care services may include fertilization and pesticide application, requiring knowledge of plant health care, entomology, physiology, pest control and more. Besides a background in these disciplines, workers will need ongoing training in these areas. Tree transplanting and removal is another service area. This is a specialized skill set, one for which Davey Tree offers extensive training in a classroom environment.
 
When it comes to insurance and workman’s compensation, be prepared to pay much more than for a lawn care or landscaping company. Services offered on the ground are relatively reasonable to cover, but once workers get into the air, danger rises and so do costs.
 
Initial expenses for starting a tree care division revolve around increased insurance costs and equipment. Potential investments include vehicles, a wood chipper, chainsaws, trimmers, tree sprayers, aerial carts and more. Besides equipment, other expenses will include initial and ongoing marketing, hiring skilled and trustworthy labor and instituting a training and education program. Starting small could conceivably be done for around $100,000, not including insurance, workman’s comp, certification and licensing, says Dennis Jones, of Mariposa Horticultural Services, headquartered in Irwindale, Calif.

The Danger of Mistakes. Companies considering tree care services as a business expansion often make several assumptions about the business. Unfortunately, many are wrong.
 
Assumption No. 1: Lawn care/landscaping and tree care are essentially different sides of the same business. As Arbornomics learned firsthand, eager companies can expand into tree care believing a knowledge of chemicals, lawns and landscaping is sufficient preparation and meet with poor results. “You’re dealing with a different personality between tree care and lawn care,” Bare says. “Lawn care is a commodity. For tree care you need climbers, this rare person with a rare ability.  They’re really opposing businesses.”
 
Companies providing plant health care services also need employees adept in diagnostics, like arborists certified through the International Society of Arboriculture. “If you’re going to do it, do it right,” says Jones. “Hire qualified people, and make sure they receive proper training.”
 
Assumption No. 2: Tree care, like lawn care and landscaping, is a repeat business. Sure, with services like pruning, a company will have a few repeat customers. But by and large, tree care is a one-time or occasional deal. This means marketing becomes even more important, and is an ongoing expense.
 
Assumption No. 3: You can start for cheap and ease in. Cutting corners, even on uniforms and logos, may hurt. When Arbornomics embarked on tree care, Bare bought used equipment and opted to get uniforms and official logos later. But clients balked. This wasn’t the level of service they were used to. Eventually Bare spent more than $150,000 on new equipment and uniforms for an operation he mistakenly thought would be cheap and quick to add.

other options. Considering the risks and costs of adding tree care, it’s no wonder many companies shy away from the idea. But companies do have alternate routes to follow to offer complete services, including tree care, to their customers.
 
Some firms leave the expertise to the experts, subcontracting their customers’ tree care needs completely or partially to specialized companies. “When a tree care project requires us to get higher than 15 feet, or a customer needs a major tree removal, we call in another company,” Dowell says.  “We’ve avoided the big issues by employing subcontractors. We’ve developed reciprocal relationships with many companies in the business, meaning more for all of us.”
 
Acquiring a tree care company is another common way landscape and lawn care firms enter this business.
 
For companies that are still keen on offering their own tree care, Dowell offers further advice.
 
“Do your homework,” he says. “Know what your customers want, and be able to place that beside what you can realistically provide. Keep in mind that the expertise you’ll need will cost you. It’s a formidable challenge, but if you can consistently provide quality service to clients, it will place your company in the top echelon of lawn care and landscaping providers.” LL