How Much Is a Tree Services Business Worth in Australia?

A tree services business in Australia is typically worth 2 to 3.5 times its annual seller's discretionary earnings (SDE), or 2.5 to 4 times EBITDA for larger, staff-run operations. The exact multiple depends heavily on how owner-dependent the business is, the age and condition of its equipment, and whether it has any recurring commercial contracts.

That's the short answer. The longer answer requires understanding what actually drives value in this industry — because two tree services businesses with identical revenue can be worth very different amounts.

What "worth" actually means for a tree services business

When a buyer asks what a business is worth, they mean: how much would a reasonable person pay, knowing what they're getting into?

For a tree services business, that calculation starts with normalised earnings — the profit left over after you strip out owner expenses, one-off costs, and anything that won't recur post-sale. This is covered in depth in Module 4 of the Playbook.

The two most common measures:

Seller's Discretionary Earnings (SDE): Used for businesses where the owner works in the business. SDE is net profit + owner's salary + owner's personal expenses run through the business + non-cash items like depreciation. It reflects what a working owner-operator would earn.

EBITDA: Used for larger businesses where the owner is a manager, not a technician. It strips out interest, tax, depreciation and amortisation, and reflects what the business would earn under professional management.

For a tree services business turning over $800,000 with the owner still climbing trees and quoting jobs, SDE is the right measure. For a $3 million operation with a site manager and a crew of six, you'd use EBITDA.

To understand how to normalise EBITDA for a trades business, read the linked article — the principles are identical for tree services.

Typical multiples for tree services businesses in Australia

Based on businesses currently selling through brokers and private transactions, tree services businesses generally trade in these ranges:

Small operations (under $400K SDE): 2.0 to 2.8x SDE. The owner is usually the primary skilled worker — an arborist or tree lopper who does most of the technical work. Buyers are paying partly for the cash flow and partly for the equipment, but there's meaningful key-person risk priced in.

Mid-size operations ($400K to $1M SDE): 2.5 to 3.5x SDE or EBITDA. The business has a core team, established client relationships, and the owner has stepped back from daily operations. Recurring commercial contracts add to the multiple.

Larger operations (over $1M EBITDA): 3.5 to 5x EBITDA. At this scale, professional buyers (private equity, trade buyers) enter the picture, and defensible margins and management depth command a premium.

For context, these sit slightly below electrical and plumbing businesses (which often attract a 3 to 5x range), largely because of the equipment intensity and the certification requirements for skilled arborist work. If you want a broader view, the EBITDA multiples guide for trades businesses covers the full spectrum.

The factors that push the multiple up

Recurring commercial contracts. A council contract for street tree maintenance, a strata management agreement, or ongoing commercial site work is worth considerably more than one-off residential jobs. Recurring revenue means predictable cash flow, and buyers pay for certainty. A business doing 40% of its revenue on annual contracts will attract a meaningfully higher multiple than one chasing new residential jobs every week.

Qualified staff, not just the owner. If the business has a certified arborist (or multiple) on staff who aren't going anywhere when the owner sells, that's a significant de-risker. An arborist licence takes years to get in Australia — you can't just replace that knowledge quickly. Buyers notice when it lives in the owner's head alone.

Equipment that's owned, not old. A fleet of owned wood chippers, elevated work platforms, stump grinders and tip trucks — maintained and not ready for the wrecker's yard — adds real asset value. Some buyers will look at the tangible asset value as a floor price even before applying an earnings multiple. Equipment that's fully depreciated on paper but still has years of life left can work in a seller's favour.

Geographic spread. A business operating across multiple suburbs or regions is less exposed to losing a local council contract or a single commercial client. Metro operations with consistent demand tend to attract better multiples than highly rural operations, where weather and distance create volatility.

Clean books. Tree services businesses often run significant cash through the business (small residential jobs paid cash, subcontractor arrangements). A buyer who can verify revenue through bank statements, job management software records, and BAS lodgements will pay more than one who has to take the seller's word for it.

The factors that drag the multiple down

Owner doing all the technical work. If the owner is the only qualified arborist on site, the business is significantly owner-dependent. A buyer without arborist qualifications faces a gap they need to fill immediately — and that gap is priced into the offer. I've seen deals where the buyer's only option was to retain the seller as a subcontractor for 12 months, which changes the economics considerably.

Equipment age and condition. A chipper that's going to need replacing in the first year of ownership is a capital cost the buyer has to factor in. Sellers sometimes don't realise how much a knowledgeable buyer discounts for near-end-of-life plant and equipment — it comes straight off the price.

Subcontractor-heavy model. Some tree services businesses use subbies for the bulk of the work rather than direct employees. This can look capital-efficient on paper, but buyers worry about what happens when key subcontractors go elsewhere or set up on their own. A business with a stable, employed crew is generally considered lower risk.

High customer concentration. If one council or one large commercial client represents 30% or more of revenue, a buyer will be cautious — and rightly so. Councils retender contracts. One lost contract at that scale can genuinely threaten the business. Understanding customer concentration risk is important before buying or selling any trades business.

Licensing and compliance issues. The tree services industry has genuine licensing requirements — particularly for work near powerlines, which requires specific permits and insurer sign-off. Any outstanding compliance issues, OH&S incidents, or WorkCover claims will be unpacked in due diligence and can stall or kill a deal.

How the asset value interacts with earnings multiples

One thing that surprises sellers is how differently buyers think about asset-heavy businesses. In a business with significant plant and equipment, there are effectively two values running in parallel:

The earnings-based value (the multiple applied to SDE or EBITDA)
The net asset value (what the equipment, vehicles, and tools are worth if you sold them)

In most transactions, the earnings-based value wins if it's higher. But if a business has poor margins but owns $400,000 worth of relatively new equipment, a buyer might use asset value as a floor rather than paying below it for the earnings multiple.

This is particularly relevant for tree services businesses with elevated work platforms — a decent EWP can be worth $80,000 to $200,000 depending on age and type. That asset doesn't disappear just because the business has a bad year.

For the accounting mechanics of this, asset vs share sale matters a lot — how you structure the transaction affects how the asset values are treated for stamp duty and CGT purposes.

A real example of how this plays out

A broker told me about a tree services business that came to market last year — $1.1M turnover, owner and two employed climbers, about $280,000 SDE. On the face of it, it looked like a 2.5x deal: $700,000. But the business had a council contract worth about $220,000 a year, two qualified arborists employed (not the owner), a newish EWP, and three years of clean BAS and bank records.

It sold at 3.1x SDE — $868,000. The council contract and the qualified staff drove the multiple well above what the raw numbers would suggest. The buyer was a PE-backed landscaping roll-up, and they knew exactly what they were paying for.

The lesson isn't that tree services businesses are worth 3x across the board. It's that the multiple is the output, not the starting point. You build the multiple by understanding what makes this particular business defensible.

FAQ

Do arborists make good money in Australia?

Employed arborists typically earn $70,000 to $100,000 in Australia. Owner-operators running their own tree services business can earn $150,000 to $350,000 SDE if the business is established — though income can be volatile and the work is physically demanding.

Are arborists in high demand in Australia?

Yes. Qualified arborists are in genuine shortage, particularly in metro areas. This shortage actually supports business valuations — a buyer acquiring a business with qualified staff is acquiring something that's hard to replicate quickly.

How much do arborists charge per hour in Australia?

Arborist services generally range from $150 to $250 per hour for single operator work, and $400 to $700 per hour for a full crew with a chipper and EWP. The pricing varies significantly by state, complexity, and whether the work involves powerlines.

What to do with this information

If you're a seller, understanding your multiple before you go to market lets you spend 6-12 months improving it — getting a qualified arborist onto staff, cleaning up the books, building one more commercial contract. These aren't cosmetic improvements; they genuinely move the number.

If you're a buyer, know that the headline multiple is only as meaningful as the underlying quality of earnings. A business sitting at 2.5x SDE because it's owner-dependent isn't necessarily a bargain — it might be priced exactly right.

For help thinking through the valuation, the how to value a small business in Australia article covers the full methodology. And if you want the tools to do it yourself, the free industry multiples cheat sheet covers trades business multiples by industry type, and the EBITDA normalisation checklist will walk you through stripping out the owner expenses properly.

This is covered in depth in Module 4 of the Playbook — including how to structure the conversation with a broker or seller when you're working from an information memorandum rather than audited accounts.

If you want more on this topic, the The Leveraged Worker newsletter covers deals, valuations, and acquisition strategy for Australian buyers each week.