Four Business Ownership Models Used By Tree Service Providers

By Author: Yuriko Rodriguez
Total Articles: 4
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We venture to look at some four business ownership models that are used by tree service providers. This information would be useful to anyone who procures tree care services frequently, and who is interested in understanding how the ‘business side’ of the whole thing works. Now one key to understanding how a particular business is run is in understanding the nature of that business’ ownership: which is what we’ll be looking at here, with respect to the tree care business. The information would also be useful to anyone who is considering setting up a tree care business: as it is essentially an exposition on the open options in terms of ownership models that can be adopted.

Without further ado, the four business ownership models used by tree service providers include:

The sole proprietorship model: this is the scenario where a person with some tree care expertise simply procures the necessary equipment, hires office space, gets a telephone line and then proceeds to hang his or her shingle – indicating that he or she is offering tree care services. You come to realize that majority of small-scale tree ...
... care firms are actually sole proprietorships.

The proprietor in this case provides all the capital necessary to set up the firm (though he or she may also borrow to top up what they have). Having done that, if the business succeeds, the proprietor enjoys all the profits earned. But on the flipside, if the business flops, the proprietor would have to bear all the losses. The lawn care service providers who opt to operate in this way are responsible for their businesses’ liabilities. They are also faced with the formidable task of building brands and setting up effective business systems.

The partnership model: this is the scenario where two or more people who possess tree care expertise come together and pool resources to establish a tree service firm. They subsequently share in the profits (and losses) of the tree care firm hence set up. Like the sole proprietors, they also have to deal with the formidable task of building brands and setting up business systems.

The limited company model: this is a scenario where the tree care firms operate as separate legal entities from their owners (meaning that their owners are not responsible for their liabilities). In this arrangement, the owners’ stake in the tree care firms is limited to the number and value of shares they own in the firms. They normally appoint directors to run the firms on their behalf. They earn ‘dividends’ (portions of the profits made by the tree care firms), commensurate with their shareholdings in the firms.

The franchise model: this is the scheme where people interested in setting up tree care firms, but who are afraid of committing themselves to the formidable tasks of building brands and setting up business systems, can opt to buy franchises. It is simply a scheme where they operate using the business systems developed by other well-established tree service firms, and also using the brand names of such established tree care firms. This makes it possible for them to hit the ground running (as they don’t have to start building brands or setting up business systems from scratch). On the downside, they are forced to share the profits made by the franchised tree care firms with the franchisors (owners of the business systems and brands they operate with).

The Maplewood Landscape Service firms and Minnesota lawn care agencies impart regular training to their staff, as per the author