Tree service
Tree Service Business Profit Calculator
Works gross profit across the business, where equipment and insurance decide whether the margin survives.
Result
Net profit here is before tax and before any owner's draw that is not already inside overhead. If you pay yourself out of what is left, this figure is your wage rather than the company's profit.
Get a Free Business AuditHow the calculation works
Revenue less direct costs gives gross profit and margin at a business level. In tree care the direct side has to include equipment time at an internal rate alongside labour, fuel and disposal, because owned machines are not free and a business costing only labour and fuel overstates its margin on every equipment-heavy job. Gross profit then has to cover an overhead base that is heavier here than in most trades.
What moves the number
- Whether equipment is costed to jobs at an internal rate.
- Disposal and haulage, which is a real variable cost.
- Labour burden, which on this trade includes a very high workers compensation rate.
- Mix of removals against pruning and maintenance.
Where this one goes wrong
Treating owned equipment as free is the error that makes a tree business look healthier than it is. Each machine has a purchase cost, a finite life, maintenance and eventual replacement, and the only way those are recovered is by charging jobs for the time they used them. A company that bills equipment to customers but never costs it internally cannot tell which jobs made money. The labour burden is the other understated line: workers compensation on tree work is among the highest class rates anywhere, so the gap between a climber's wage and their true cost is wider than almost any other trade.
Before you quote
- Cost owned equipment to jobs at an internal hourly rate.
- Use a fully burdened labour rate including the real comp cost.
- Compare margin by work type, since removals and pruning differ.
Questions
About this calculator
Why does my tree business show good margin and little cash?
Most often because equipment is treated as free. Machines have purchase cost, finite life, maintenance and replacement, and unless jobs are charged for the hours they use them, the margin shown is borrowing against the next machine purchase. Costing equipment internally reveals the real figure.
How much does a climber actually cost?
Considerably more than the wage, because workers compensation on tree work is among the highest class rates of any trade and sits on top of payroll taxes, insurance and paid time. The gap between wage and burdened cost is wider here than almost anywhere else.
Should margin be measured by job type?
Yes. Removals, pruning and maintenance have different labour-to-equipment ratios and different debris volumes, so a blended margin hides which work is carrying the business. Many tree services find pruning more profitable per hour than large removals once equipment is properly costed.
The formula
net profit = revenue - direct costs - overhead
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How to use this calculator
- Revenue ($). Enter your own figure; the page starts at $37,000.
- Direct labour ($). Enter your own figure; the page starts at $16,000.
- Materials and equipment ($). Enter your own figure; the page starts at $11,000.
- Other direct costs ($). Enter your own figure; the page starts at $2,200.
- Overhead ($). Enter your own figure; the page starts at $11,500.
The result updates as you type, so you can try a figure, see what it does to net profit, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Revenue | $37,000 |
| Direct labour | $16,000 |
| Materials and equipment | $11,000 |
| Other direct costs | $2,200 |
| Overhead | $11,500 |
What comes out
| Result | Value |
|---|---|
| Net profit main result | -$3,700 |
| Net margin | -10.0% |
| Total direct cost | $29,200 |
| Profit per working day | -$168.18 |
That is -$3,700 at a -10.0% margin, about -$168.18 for every working day.
How sensitive the answer is
Holding everything else steady and changing only revenue, this is what happens to net profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Revenue ($) | Net profit |
|---|---|
| $18,500 | -$22,200 |
| $27,750 | -$12,950 |
| $37,000 example above | -$3,700 |
| $55,500 | $14,800 |
| $74,000 | $33,300 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Revenue ($)
- A money amount, starting at $37,000.
- Direct labour ($)
- A money amount, starting at $16,000.
- Materials and equipment ($)
- A money amount, starting at $11,000.
- Other direct costs ($)
- A money amount, starting at $2,200.
- Overhead ($)
- A money amount, starting at $11,500.
What the results tell you
| Result | What it is |
|---|---|
| Net profit | The headline result. A money figure. |
| Net margin | A percentage. |
| Total direct cost | A money figure. |
| Profit per working day | A money figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.