Experience with tree care or arborist companies?

by a searcher from Northwestern University - Kellogg School of Management

3 years ago

I've looked at a few tree care companies in my area. As someone in need of their services for my home, I can't believe they're booking jobs 3+ months out, indicating a ton of demand. It doesn't seem like any have grown to a significant size, and I'm curious why. Also interested to get thoughts on an industry that has so much liability and is dependent on specialized labor.

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3 comments

admin from Massachusetts Institute of Technology - MIT Sloan School of Management

Anonymous - In addition to the comments you receive here, you should check out the IBISWorld report on TREE TRIMMING SERVICES. You can find IBISWorld reports under Menu / Searcher Tools / IBISWorld. Here is the direct link: https://www.searchfunder.com/post/ibisworld-report-tree-trimming-services-1

3 years ago | like reply | 1 like

searcher

I made a run at a tree service company two years ago but got outbid. The negatives you noted are true, but that is reflected in the low multiples at which they trade. Margins are high and steady. There are larger players that get utility work and other large scale projects but that requires substantial investments in heavy equipment.

Probably the most significant factor in market fragmentation is the same dynamic you see in every local service business. You have average Joes who are happy to make their $200,###-###-#### ,000 per year for working not very hard and answering to no one. The upside of successful growth doesn’t outweigh the downside of increased financial risk and hassle.

3 years ago | like reply | 0 likes

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