top of page

Owning a Forestry Mulching Business

Hello, My name is Mike, I'm the owner of Three Oaks Property Management. Three Oaks is a forestry & vegetation mulching business. We also clear property of trees and vegetation. We also excavate water run off.  I have 38 years in supervision and management field. I started Three Oaks Property Management in 2020. I have a Bachelors Degree from Thomas More College in Kentucky, in Business Management. I hope this segment helps in making coherent business decision and helps you succeed in a vegetation mulching business.

Scroll Down...

  • Facebook
  • Twitter
  • LinkedIn
  • Instagram

Starting a Vegetation Mulching Business.
The Ins and outs of the Vegetation Mulching Business

I live in northern Alabama. Three years ago, I hired someone to vegetation mulch 2 acres of vegetation. I was so impressed with the mulching process I decided to advance my house flipping business and add mulching, land clearing, excavating, water run off to the business. Your geographical area will determine your price. The east and west coastal areas will allow for a substantial higher rate. This essay is based on my experience in N. Alabama. Your experience will be different. I know people who have mulching businesses in other parts of the USA and have substantial amounts of work. In fact, I know one mulching business that wears out a skid steer and mulcher every year (3,000hrs). I know another business on the east coast that keeps two mulchers busy all year round and has a third as a backup machine. I hope people take this essay as a learning and knowledge-based experience and not a chance to be negative.

Where do your customers come from?

This type business’s success is strictly based on the owners’ efforts, owners’ business acumen and most of all customer’s disposable cash. I focus on residential jobs not commercial job. Residential clearing is not necessary for people to survive, such as food and water, or their day-to-day safety such as a car or heat, so your customer base are people who have disposal cash available (remaining cash after all bills are paid) . This essay was written during the 2020-2024 economy. The economy has reduced consumers disposal cash a minimal amount if not nonexistent. Here’s what I have learned. I hope it helps…

 

Start-Up Cost:

Purchasing a skid Steer and mulching head was the easy part. I purchased a used (1200hr) Kubota SVL95-2. The out-of-pocket cost was a little over $50K (A new SVL97-2 $80-$100,000). The mulching head is a Loftness Battle-Ax w/cooler which cost $38K new. I was able to pay cash. This did not include a 30K capacity flatbed trailer ($18,000.00) and a 2008 1-ton dual wheel truck ($12,000.00), which was later replaced with a 2009, 1-1/2 ton GMC truck ($17,000.00). Total base investment cost: $122,000 - $128,000 depending on which truck you add into the equation.

Operation License’s and Insurance:

In my area, I have to acquire a county and city license to operate my business ($200 annually). I also had to be bonded and insured ($125 annually). Lability insurance is very different than machine insurance. The two will be separate insurances. Inexpensive machine insurance will be ($9000.00 annually).

Pricing 

Competition is very tough. I know of other vegetation businesses in other parts of the USA who charge $2,300.00 - $2500.00 per day. That is not the cost in N. Alabama.

I figured that my machine would need to pay for its selve in 5 years. I quickly realized that this time frame was not feasible, so I extended it to 7 years.  My prices are $1,200.00 to $1,400.00 per day or per acre. In the past three year my operating cost are around 37%-38% of gross income. This is based on annual cost of:

1) Machine cost annually with a term of 7 years- (2%.

2) Annual Maintenance Cost-15.3%.

3) Fuel-24.3%.

4) Insurnace-7%

5) Net Income-60%

I set my price at that amount so that I would be less expensive than if a customer rented a skid steer and mulcher for a day or two, which is typically $3,500 per day. This equates to: rental cost, insurance and transportation. Not included in this cost is diesel. My competition who have taken loans out for their machines and who have at least 7 years of business management experience have set their prices around $1700 - $2000 per day. New commers who don’t understand business set their prices around $800 - $1,000 per day. Their life cycle is short lived and typically lasts about 2 years.

If the job is 5 – 25 acres, then the price is prorated. This calculation begins at $5000 per acre, and will not exceed $14,700.00.  The $14K would be a complete month of vegetation mulching (20 days of operation). A homeowner can rent a skid steer with a mulcher for a month for around $8,500.00 - $10,000 (this will vary based on your area). Not included: diesel, transportation and insurance. The larger the mulch job the less profitable the job will be.

Other things that can affect the “daily price” is based on the number of trees, the diameter of the trees and what type of trees. A 10-inch pine or cedar tree that is 30-40 feet tall, will take approximately 10-14 minutes to mulch. I have a video of such on this web site. A 10-inch oak tree will take 14-30 minutes to mulch. So if you have a job that contains eighteen 10 inch oak trees, the mulching time for the 18 oaks trees will be close to 8 hours. 

I calculated potential business and thought that the $1,200.00 price would allow me to be very competitive and set me at a nice income during the busy season. If I was money wise with the profits, the ancillary funds would hold me over during the slow seasons. I started my business in April. The business seemed to take off nicely. I was doing three mulch jobs a week. Gross income was averaging $12-$14,000.00 per month. Then the slow periods and ancillary costs began taking affect. Mulching business drops off to almost nothing from the middle of November to sometime in May (FIVE MONTHS). 

When performing general dirt work, I have discovered that $80-$110 per hour is a price that folks are willing to pay. We also have a 20k lb. excavator. When clearing land and using both machines, does not always mean that you will get $110.00 per hour for each machine ($220.00 per hour for both). I see an uptick in business when I charge $200-$230 per hour for both machines. The $230.00 price is very counter-productive to machine life scheduling.

 

Estimating and Bookkeeping (good business skills):

Estimating: A good amount of your spare time will be consumed doing estimates and bookkeeping. Bookkeeping will give you the knowledge you need to keep your business healthy. it will also give you time to react to unexpected business downturns and make corrections in time to recoup losses.

I have discovered that most customers are more willing to accept bids if you drive there and talk to them. The downside to this is that, driving to estimates is time consuming and adds cost. I can do 3-4 estimates in an eight-hour period, depending on the distance of each estimate. A good number of customers are just checking prices. They ask for a detailed estimate and then reduce the desired work. I actually had one customer who wanted 4 different estimates to removing two small buildings and complete vegetation mulching. I was at the low end of profits, and he still turned down the bids. He said his brother could do it cheaper (we hear this a lot).

 

Bookkeeping: It is time consuming. Be sure to document gross costs associated to a job very accurately i.e.: Transportation Fuel, Machine Fuel, Employee Labor, Insurance, Licenses, Machine use per hour, Repairs/Machine, Loss/Damage, Grease/Oil, Hydraulic Fluid, Food, required UCR plan and Ancillary Cost. Also be sure to divide the net income by the total hours the owner/operator put in working “on the job”. This will allow you to understand how much you earn and how much you can save for company growth. Even though it may appear that you have made a good amount of cash, ancillary costs consume profits quickly. As an owner operator, if your net income is not $80 to $100 per hour, your business is not on the right track, so change something. 

 

Ancillary Costs:

Unexpected ancillary cost will eat your lunch...

Tracks:

I was told tracks would last 2-3 years. I have never had tracks last that long. It is my experience that tracks will last you approximately one year. ($3,400.00). Some folks have had them last longer, I have not. This added $3,400 cost to each business year’s expense. The constant turning motion on mulched stumps and branches will wear them out quickly.  Always have one spare track. If you rip a track on Friday, you will be down at least until Tuesday, unless you have a spare track. Good luck changing a track in the field. Tracks weigh 550-625 pounds each. Imagine how will you transport the new track to the machine that is a couple of acres out. Then imagine how will you move a 600-pound track off the truck and then put it on a skid steer. When I rip a track in half in the field, I go back to the shop, I get the spare track and one of the other pieces of equipment. I haul the track into the field with the spare piece of equipment. A 20k excavator comes in very handy when completely removing and installing a track.

Before you begin your first job; buy a set of track bars. A track bar is semi straight crowbar with a tapered end, ending with a blunt point on one end, and a 22 degree chisel tip on the other end. Then practice taking a track off putting a track back on a skid steer by yourself. It can be a pain staking experience. As your tracks and sprockets wear, they will come off track more often. If you over tighten a track, it will rip the internal steel cables, and they will stick out of the rubber. Tracks will also come off due to operator error. Learn what NOT to do while turning. There have been times that I have gone four months without throwing a track, and there have been times that I have thrown a track off four times in one day.

 

Diesel Fuel and DEF fluid:

You will consume about 35-40 gallons per machine per day of diesel a day. That cost can range anywhere from $140-$200 per day depending on who is president. DEF fluid is increasing in cost. When I began this adventure, DEF was $8 for 2.5 gallons. Now, it’s as high as $28 for 2.5 gallons. Stock up when you find DEF on sale. Do not use gas station pumped DEF. I have been told that it will cause you a lot of problems with your DEF system, so I have never used it. You will need at least three 5-6 gallon diesel cans to carry additional diesel. A skid steer holds around 28-30 gallons. That’s enough for six hours of mulching. For a while, I carried four, six-gallon plastic cans of additional diesel. Going to get fuel for the next workday, after a nine-hour job was exhausting. I was pleased when the 1-1/2 ton truck came equipped with a 90-gallon axillary tank.

 

Mulcher Teeth:

A set of carbide mulching teeth are advertised to last 1400 hours (1-1/2 years) and cost around $3,000 - 3,500.00 per set. This is not true. The carbide teeth only last about 1000 hours. This equated to; one set per year, NOT every 1-1/2 years, adding $3,500 to my 3 year projection. In my experience, harden steel teeth cost less but, only last about 24 to 36 hours of mulching thus driving long term cost up. The hardened steel teeth wear faster because, customers are much more satisfied with the job if you take the tree down ¼ inch below ground level. The dirt and rocks take a major toll on hardened steel teeth, carbide teeth will to last longer.

 

Hydraulic hoses:

Through 3 years of experience, I have learned to save $50 from each job for hydraulic hose replacement. The large high flow hoses will cost you $400 to $500 per hose. They last about two years. The trees will take a toll on the hoses. Any smaller hoses (especially the hydraulic hitch lock hoses) that are not completely protected will become prey for large limbs. The hydraulic manifold that is located on the arm of the skid steer will also take a beating. In three years, at one time of another, I have had to replace every one of the quick connecters on the manifold. Keeping spare hydraulic hoses fittings and couplings on hand is a must because, when you are mulching a large parcel and your schedule is full, hydraulic hose repair shops are typically not open on Saturday and Sundays to repair hoses (yes, you will be working Saturdays and Sundays, the weather will dictate your schedule).

Front Window (Safety First):

Safety should always be on the front of your mind. Your skid steer should be equipped with at least a 3/8 inch thick polycarbonate front window. Mine is equipped with such. I have had many large pieces of wood hit the front window so hard I was amazed that it didn't break the window. During one instance, I mulched a "T" post that I didn't see, the mulcher broke the T-Post in pieces. One pot the pieces ricocheted off a tree and hit the front window. It put a large gouge in the window, but didn't break it. I broke three excavator glass windows before I decided to purchase polycarbonate front windows for the excavator.  

Repairs:

Hold on to your checkbook. Dealer costs and parts cost are extremely high, and will kill a business. I try to perform all repairs myself. I had the dealer change all four injectors on my SVL95, the cost was $5,300.00. If you have a DEF system, you will need the filter cleaned or changed around 3500-4000 hours. If you purchase a new filter, it will cost you over $7,000.00. If you have your current filter cleaned, it will cost you around $4,800.00. When your filter becomes clogged you will know it because, your machine will go into creep mode, or even worse, it may go into “safe mode” (shut down mode).

Tools:

You will need to perform repairs in the field, so be sure you have plenty of tool in your truck to perform a multitude of repairs. Assortment of tools should be: wrenches: Standard 1/4 to 1-1/2 and Metric 7mm - 32mm, socket sets: 1/4 drive, 3/8 drive, 1/2 drive , and 3/4 drives. A 3/4 inch electric impact will be very handy. Pliers, screwdrivers, side cutters, three sizes of Chanel locks, vise grips, flashlights, small and very large snap ring pliers, leaf blower, spray oils, wire, track bars, small and large crescent adjustable wrenches just to name a few.  

Performing Repairs:

Be sure that you are mechanically inclined. Be prepared to try to do any maintenance yourself. Your business will never survive it you have to take the machine to the shop every-time the machine needs general/extensive repairs or something welded. You will need a workshop so that you can do maintenance on rainy days. You will need a hoist. If you don’t have a welder and a set of torches, you need to buy both on the same day you buy your skid steer. Be sure that you take a class in welding and torch use. Being able to weld and use torches will be the most important skill you will ever use in this business.

I have tried to set one day a week aside for maintenance, using the catchy term "Maintenance Monday". Weather has always put my maintenance schedule behind.  

Skid Steer Creep Mode and Safe Mode Means:

Creep mode means; although the machine will move, it will have reduced power. Safe mode means the machine has experienced a major problem and will go into t a safe mode and shut down. There are multiple reasons that your machine woudld go into creep mode. If you use it for mulching, at some point it will go into creep mode. If your machine goes into creep mode, you will have a very limited time to get to your trailer and load it. If you are more than three acres away, there is a chance that you will not make it back to the trailer. If it shuts down before you make it to the trailer, you will have to tow it to the trailer. To tow a skid steer, you’ll will first need to remove the planetary gears from the final drives. This takes about 30 minutes per side to remove. There are many parts, so bring a bucket to put the parts in.  If you try to move the skid steer without removing the planetary’s you will destroy your hydraulic drive motors. After you remove the planetary’s, you will need a larger machine to pull it out of the woods. It is dry enough, you might be able to use a 4x4, although I have never heard of anyone successfully pulling a skid steer out with a  truck. After you have the skid steer behind the trailer, you will have to have a larger machine with enough capacity to pull the weight of the skid steer onto the trailer. You will need; two snatch blocks and ½ inch cables long enough to pull the skid steer onto a trailer. If you have a company come and tow the skid steer out of the woods then trailer it to the dealer, plan on spending at lease $1000.00, plus repairs.

 

Getting Equipment Stuck:

If you have a mulcher on a skid steer, at some point you will get stuck in the mud. When hiring a towing company to tow a skid steer out from being stuck, the financial burden begins around $600.00 and can exceed $1,400. If you have a second bigger machine, you will have to go get it. Plan on consuming the remained of the day transporting and pulling the stuck machine out. Remember, you will need plenty of ½ inch steel cable and at least two snatch blocks to pull a skid steer with a mulcher (15,000 lb) out of the mud. We have four ½ inch cable setups: 100ft, 75ft, 50ft, 30ft. One time we used all four to retrieve a skid steer out of a swampy area. Remember, pulling a machine that is stuck is very dangerous and should only be done by someone who has experience. We had a 3/8 inch 70 grade chain that mounted the snatch block to the trailer, it snapped when pulling a skid steer onto the trailer. The snatch block went flying 30ft like a frisbee. Remember to add an additional clevis lock to snatch blocks to lock them closed. This will greatly reduce the chance of injury. Once we got the skid steer stuck, we then got a steel track loader stuck trying to pull out the skid steer. We then had to go get the excavator to pull both out. Geez!
 

Cleaning Skid Steers:

Mulching creates a lot of wood debris. The debris will enter the engine compartment and works its way to the bottom of the machine. The bottom will need to be cleaned out every 1 to 3 months. It typically takes an entire day to clean out the under carriage and trust me, it is a very dirty job.  Radiators become clogged frequently and overheating will occur. You will need to blow out the radiator once a day. NOTE: only use dry air from a compressor or a leaf blower to blow out the radiator. If you use a pressure washer, the water will mix with the dirt dust and radiator will become locked up with dry mud causing overheating. If you don’t like getting very dirty, find another career because this one is definitely not for you.

 

CDL:

Just do this simple calculation to see if you need a CDL. Take the weight of your truck, add the total weight that your trailer can haul. This amount is listed on the metal plate attached to the trailer. If that weight exceeds 26,000lb you will need a CDL. Example: dual wheel truck @ 8,000lb + the weight the trailer can haul @20,000lb, totaling: 28,000 lb. This equates to the GVWR being 2,000lb over CDL requirement, so you will need a CDL. If your truck and trailer bend at the hitch, gooseneck or fifth wheel, then you will need a Class-A CDL. Assure that your truck and trailer have the proper weight class registration. If you plan on crossing a state line you will need intra state registration and register with Unified Carrier Registration plan, also known as UCR registration. 

 

Pull/Tow Vehicle:

A trailer (8-10K lb), skid steer and mulcher (15.5k lb) weight around 20k-22K pounds. Most 1-ton dual wheel pickups are not rated to pull that much weight. Remember, it is not how much the truck can pull, it’s how much the truck can stop. I used a 1-ton dodge (5.7 Cummins) for 6 months. It took a major toll on the drive train. At the end of the 6 months, I purchase a GMC C5500 series 1-1/2 ton truck (6.6L Duramax). The GMC truck’s pulling capability was far superior to a 1-ton truck. Using a ½ ton or a ¾ ton truck is not advised and will not support the weight or have the braking capacity. Just don't do it.

 

Working Hours:

Mulching operations are typically nine-hour workdays. Eight for mulching and one hour to eat lunch, grease, blow out the radiator and refuel the machine. After the day is completed and you arrive home, you will need to blow off the machine, grease it again, blow out all the filters and check all fluid levels. Blow all the debris from around the top of the engine. A good number of mulching skid steers burn up because operators do not blow the tree debris out from the top of the motor and the DEF system. When regen’ing, the DEF system heats up over 1000 degrees, more than enough heat to start a fire.

Remember, unless you have a 90-gallon auxiliary tank on your truck, you will also need to stop for diesel every night or every morning.

Since weather will control your schedule, you will be working a lot of Saturdays and Sundays. Your family will have to understand that if God wants you home on the weekend, then God will make it rain on Friday. If it rains, you will have to wait for at least one day of sunshine to allow the land to dry. Wet dirt will pack into the mulching cavity of the mulcher and your mulcher will begin dispensing large pieces of wood chips. Customers hate large wood chips.

 

Mulching Season:

Your geographical location will determine your mulching season. I live in northern Alabama. We get “6-7 feet” of rain per year. The rain prevents me from working as much as I would like. The working season drops off for me around the middle of November and then is very limited to one or two jobs per month until May. Be sure to put enough money away for the winter months. I have found out for me, a good amount to start with is around $12K-$14K. Your amount may vary greatly. During the slow months, you won’t have time to work a part time job. You will be spending your time getting ready for the next season. You will be doing maintenance on the truck such as: oil/filter and transmission fluid/filter changes, brakes, tune-up and cleaning. You will need to do maintenance on the trailer such as: new tires, brakes, grease wheel bearing or change the oil in axles (15K axles and above). The machine will need a complete cleaning, removing the radiator and pressure washing it, oil and filter change, hydraulic fluid and filter change, clean out the under belly, change belts and worn hydraulic hoses. I change my own hydraulic fluid and filters, the annual cost is: Kubota hydraulic fluid ($290 for 15 gal), primary and secondary hydraulic filters ($250.00). Air filters are: $90-$125 for the primary air filter and $65-$70 for the secondary air filter ($735.00). I blow air filters out daily and replace them every six months.

 

Difference between: Mulching Vegetation, Clear Cutting Property and Clearing Property Ready to Build

  1. Mulching Vegetation: Operations are performed with one machine (skid steer and a mulcher attachment). Trees larger that 8 inches remain on property. You. Will be able to mulch approximately one acre per day depending on the size of trees and how many trees there are. within the acre. Stumps remain in the ground. Mulch chips remain on the ground. Property will need to be bush hogged three to four times before chips disappear. Chips can be piled up and burned.

  2. Clearing Property/Clear Cutting: Trees are harvested for financial return. Stumps and treetops remain on the ground to decay. One acre can be cleared in 3-7 days depending how large your machines are. Financial return depends on type of trees and size. 20 inch pines average between $20 and $60 per tree. Large white oaks average between $100-$1000 per tree.

    1. Clearing Property for Ready to Build. 

    • Removing all the trees from the property, either by transportation or burning

    • Transport and sell trees. Typical return, per acre depend on type of trees and size.

        2. Remove all the stumps from the property either by transportation or burning.

  •  Cost to remove stumps and debris: $100 - $200 ton depending on land fill.

  • Grade all property to accommodate water runoff. 

  • Some small roots will protrude the ground. Ground surface will still need to be power raked before seeding.

 

Conclusion:

The thought of bringing in $1200.00 a day ($144,000 annually) is very lucrative and attractive although, realizing that amount operating a Vegetation Mulching Business on an annual basis is not likely. The first two years in business I grossed right around where I predicted. By the time I subtracted my cost, my NET was definitely not as lucrative as I’d hoped. My diesel cost is around $25K to $30K annually. Dealer service shops are very busy during the summer. Once, I had to take the Skid steer into the dealer to be repaired, it took a month for them to complete the repairs. When you have a machine down for a month; that's a hard deficit on the bottom line.

The next year I decided to grow the business, decided to purchase a 20K pound excavator and began clearing properties of 1-5 acres. This also has not been as lucrative as I had hoped, because Google has land clearing advertised as $3K TO $5K per acre which is nowhere near the actual cost. The simple addition of machine cost, maintenance cost, ancillary cost and diesel cost supersedes googles $3k-$5k.

Good luck on your adventures.

Contact

I'm always looking for new and exciting opportunities. Let's connect.

123-456-7890 

bottom of page