Proposal of business plan created for $10,000 requested grant to begin business.

1. I. The Company
Lee Tree Service is a tree transplanting and sales business. The product
includes all hardy deciduous and evergreen trees having a woody stem
which are capable of propagation. Lee Tree Service uses a different method
of transplanting trees than its competition. This difference gives
Lee Tree Service the edge over its competition.
Generally trees are transplanted by the ball and burlap method. The trees
are dug using a spade that keeps the roots and dirt in a ball shape so each
tree can be manually wrapped in burlap. This keeps the roots together
preventing them from drying out in transportation, thereby keeping the
success rate of transplanting high. Lee Tree Service uses a different method
of transplanting trees.
Cone-shaped pods are mounted on a flatbed truck or trailer. The trees are
deposited into these pods. These pods keep the roots together during
transportation. Transportation time is 30-60 minutes. Keeping the travel
time short minimizes root dehydration and keeps the transplanting success
rate high. The manual process to burlap each tree is eliminated. This saves
on manual labor costs and time.
II. Management
Lee Tree Service is a Limited Liability Company. Management includes
one owner serving as the truck and skid loader driver and the other owner in
charge of sales and management. One assistant for planting is also needed.
Management selects the trees, locates the tree sources, regulates the service
contracts and maintains nursery stock. Management arranges for utility
location flags to be staked and provides daily planting location and
direction. Management works with the customer and drivers.
The planting season is May and June. It starts again in September and
October. Approximately 20 trees per day will be planted for five days per
week for the months of May and June. There will be some planting in July,
depending upon weather conditions, to 10 trees per week. September and
October planting is anticipated at 20 trees per week. It takes approximately
15-30 minutes per tree. Seasonal wages will be at an hourly rate of $10-15
for the assistant. The wages will be paid at the end of each week.

2. III. The Product/Service
Lee Tree Service’s method of transplanting is one chance where the
exposure to heavy capital outlays is at a minimum and the ability to make
good money in a short period of time is excellent. By decreasing labor
costs, using the pod system, more trees can be planted in the month of May.
This month holds the highest amount of interest for homeowners to plant.
Most building codes require trees to be planted; therefore, it’s easier to
generate sales as building increases at the arrival of spring. Hauling eight to
ten trees at a time allows for a lower price than the competition can set. It
also allows for more trees to be dug before they begin to bud in the month of
May, and then again in July when the candles have hardened.
The tree survival rate affects cost. There are many factors affecting the
transplanting survival rate. One factor is the trees must be dug before they
begin to bud. Otherwise a much larger root system must be taken using a
larger spade. Not as many trees can be transported at one time using the
larger spade. Lee Tree Service will use the larger spade for summer stock
trees when the demand is less.
Another factor affecting the transplanting survival rate is dehydration. To
prevent dehydration, Lee Tree Service has its supply source in close
proximity to the buyer. This increases the transplanting survival rate of the
trees with less chance of root dehydration during travel. This also keeps the
soil composition more likely to be the same. Also, management saves on
travel time for trimming, watering, mulch, and fertilizing the trees at the
supply source and buyer location.
Using high transplanting survival rated trees also increases the transplanting
success. Lee Tree Service will use nursery grown and state certified trees.
Also trees for the correct zone will be used. Soil conditions will be kept
closely related by their close proximity. Disease resistant trees will be used
and trees unappealing to deer, for example.
A 50% replacement cost per tree is guaranteed for one year if the tree did
not survive, unless the tree died due to lack of water or an act of nature
(weather, animals, bugs). This guarantee assists in keeping the transplanting
survival rate up by giving the buyer some responsibility in caring for the
tree.
The demand for trees could decrease if the economy isn’t ripe for building.
Lee Tree Service plans to use this as an opportunity to sell trees as nursery
stock to nurseries, landscapers, and homeowners. In less prosperous times,
homeowners are more likely to buy $20 two to three foot trees, planting
themselves, rather than buying planted eight to ten foot trees at $350 each.
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3. The other aspect of Lee Tree’s business success will be in its ability to
generate sales. Anticipated sales are projected for 20 trees per day for 5
days per week. An average net profit of $119 per tree totals $7,140 per
week for the months of May and June. July sales are anticipated to decrease
to $2,500 at 3 days per week of sales. Anticipated sales for potted trees are
1,000 trees for $150 per tree. A First Year Nursery Stock Dealer Certificate
must be applied for at a fee of $70 before selling the nursery stock trees.
The best time for planting trees was ten years ago. The next best time is
today. Lee Tree Service will begin planting trees in anticipation for
transplanting and nursery stock sales in five to ten years. Five thousand
dollars in trees today will yield approximately two million dollars for the
future. Approximately 5 acres of land will be leased within the 40 mile
radius of the business at $60 per acre per year, for a total of $300 per year.
Along with transplanting the smaller trees, anytime a good tree is spotted, it
will be purchased and transplanted onto this leased land for future sale.
IV. Marketing Strategy/Marketing Analysis
Tree transplanting is usually included with other services provided. This is
because the transplanting season has been considered a short one, and the
equipment initially appears costly. However; the more we learn about
transplanting, the more we realize its potential profit.
The season was initially considered over after the trees bud in May until
September. Spade attachments were rented for $500 per week with earnings
of $4,000 to $5,000 per week with one operator (1). However, the candles
on the tops of evergreens, for instance, harden in July. This means they can
be transplanted if their root system isn’t too deep. Nursery grown trees
generally do not have to go too deep for water and nutrients because their
source isn’t deep. Using nursery grown trees has lengthened the planting
season, creating more opportunity for transplanting. It now pays to purchase
a 44-inch spade for $10,000 initially and streamline the business to simply
transplanting.
The principal market is the homeowner and commercial builders within the
40-mile radius of our tree source. These areas total 80,000 building permits
issued this past spring (2). Using the general rule of two trees per permit,
160,000 trees will be needed within the year. As the building economy
grows, the tree transplanting opportunities expand. Lee Tree Service is
located within the projected triangle of growth for the next ten years (3).
This area is generally open farmland. And homeowners want trees. Selling
the most popular five to six-foot trees creates instant prestige and privacy
for the homeowner and profit for the transplanting business.
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4. The companies Lee Tree Service competes with are:
- Other tree transplanting businesses
- Nurseries
- Landscapers
- Developers
- Equipment rental companies
The difference between the other tree transplanting businesses and
Lee Tree Service is in the pod system of hauling trees without doing the ball
and burlap method. Although other transplanting businesses may have a
pod system, Lee Tree Service can haul more trees with their system than the
others.
Besides having a different system of hauling trees, Lee Tree Service has
streamlined its operation to tree transplanting as its main operation. It may
incorporate future branches off the transplanting business, such as hauling
dirt as a service, however; its main focus is tree transplanting. Most of the
other businesses use transplanting as a secondary focus from their other
services offered, therefore, they do not have to time to profit from
transplanting.
Another difference between Lee Tree Service and the other transplanting
businesses is in its ability to sell the service. Either the other businesses do
not have the time to sell because of other services, or they aren’t salesmen.
Lee Tree Service has offers to sell for other transplanting businesses.
However, those businesses then have the problem of fulfilling the contract –
which they do not have the time to do so. Lee Trees Service prides itself in
its ability to sell its service and fulfill the contract.
Besides the quantity price difference previously stated, the final difference
between Lee Tree Service and the others is in its landscaping expertise. Our
salesman will be a Certified Landscaper. Many customers feel they must
contact a separate service to design their landscaping. Lee Tree Service can
provide that service, creating one less step for the customer to take.
Prospective customers will be identified by new developments built in the
40-mile area. One salesman will walk door-to-door with flyers and business
cards on a day when there is potentially a homeowner home. The flyer will
be given depicting the promotion offered at the time. It is important to
speak to the homeowner near the time when they are thinking about their
landscaping. Sometimes they want landscaping ideas. Sometimes they
have ideas, but are unsure of what can be planted where. The salesman will
assist in this initial consultation for a potential sale. The business cards will
be given only if the potential customer is interested and it’s too early for an
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5. exact decision to be made. Sometimes it’s a matter of getting the neighbors
together for a cheaper price and not all neighbors are ready to make the
decision. The only other advertising will be in the Yellow Pages and
periodically a newspaper ad will be run. Once the potential customer
decides to purchase trees, the transplanting date will be set depending on the
schedule of the customer, the neighboring customers, the business timeline,
and the season for transplanting.
V. Technology
The pod system has been designed, however, the patent hasn’t been applied
for. The next system designed will be larger to handle the root of a 44-inch
spade, rather than the current 30-inch spade root system. The pods will be
of heavier steel and mounted on a trailer, rather than a flatbed truck. The
trailer is lower to the ground and would be more wind resistant for hauling
taller trees.
VI. Production/Operating Plan
The 5-acres of land for 1,000 nursery stock and transplanted trees will be
leased at $60 per acre for a total of $300 per year. Lee Tree Service also has
three suppliers with a total of 60,000 trees available for a cost of $20 each.
Lee Tree Service will trim 500 trees and tag them for potential sale. Some
of the trees will be transplanted to the leased land.
The truck will cost approximately $10,000 and the pod trailer and flatbed
will cost approximately $10,000. The skid-loader will cost approximately
$20,000.
VII. Financial/Administrative
Lee Tree Service will get assistance from accountant and banker for
financial statements in this category.
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