Every year, many individuals adorn their homes and businesses with Christmas trees throughout the holiday season. A Christmas tree farm produces and sells evergreens for individuals who prefer genuine trees to fake ones throughout the holiday season. Every year, 34.5 million genuine trees are acquired, and the sector is expanding. According to Craig Wallin of Profitable Plants Digest, fake tree sales peaked in 2007 and have been dropping since then, leaving plenty of space for development in the genuine Christmas tree sector.
Table of Contents
Follow these ten steps to start a Christmas tree farm:
Make plans for your Christmas Tree Farm.
Make your Christmas Tree Farm a Legal Entity.
Register your Christmas Tree Farm with the IRS.
Create a Business Bank Account and a Credit Card
Create an accounting system for your Christmas tree farm.
Get the Permits and Licenses You Need for Your Christmas Tree Farm
Purchase Christmas Tree Farm Insurance
Create a brand for your Christmas Tree Farm.
Make your own Christmas Tree Farm Website.
Configure your Business Phone System
Starting a company entails more than just registering it with the state. We’ve put together an easy-to-follow guide on beginning your own Christmas tree farm. These stages will guarantee that your new company is well-planned, correctly registered, and legally compliant.
STEP 1: Make a business plan.
A well-thought-out strategy is vital for entrepreneur success. It will assist you in mapping out the intricacies of your organisation and uncovering some unknowns. Consider the following crucial topics:
What are the initial and continuing expenses?
Who is your intended audience?
How much money may you charge your customers?
Fortunately, we have done a lot of the legwork for you.
What are the expenses of starting a Christmas tree farm?
The following are the key beginning expenses connected with starting a Christmas tree business:
purchasing land (at least 10 to 20 acres)
soil preparation
acquiring seedlings
Business owners with sufficient property and a tractor may establish a tree farm for a low cost since they can utilise their own land and prepare it themselves.
Owners who do not already own property might reduce their initial cost by acquiring acreage in a rural region where land is inexpensive. They may also get into a sharecropping arrangement with a landowner. In such a deal, no money is given up front for the property, but profits are distributed. Gregory Bartels, who has 40 years of expertise in the sector, said 50/50 agreements are frequent in an interview with PTMoney.
Owners who do not possess a tractor may hire a farmer to prepare the land for them. Farmers typically charge about $1,000 to prepare 20 acres, according to Bartels.
Investing in seedlings is more expensive than planting seeds. However, business owners should budget for this investment since seedlings cut harvest time by around two years. Each seedling costs around $0.35, and company owners should plan on planting 200 per acre each year.
What are the continuing costs of running a Christmas tree farm?
The expenditures of obtaining seedlings are among the continuous expenses for a Christmas tree company (200 per acre per year). With seedlings costing $0.35 apiece, 200 seedlings per acre each year should only cost $700 per year on a ten-acre farm. Mowing and weed management are extra expenditures, although for most company owners, these costs are minimal.
Who is the intended audience?
Christmas tree farms may sell trees to people, wholesalers, or charity organisations, and many farms serve all three groups. Among these three:
Individuals will pay the highest prices, but most families and corporations will only purchase one tree.
Wholesalers may buy a large number of trees, but they often pay one-third of the retail price.
Nonprofit groups are often a happy medium, paying above-wholesale costs for a few dozen trees that will be sold as a fundraiser.
Furthermore, Christmas tree farms may sometimes offer one or two enormous trees at far higher prices than most people, wholesalers, or organisations would pay. Local governments and a few corporations may be ready to spend hundreds of dollars for a very tall tree. Most farms have few (if any) of these transactions, but even one or two of these sales may greatly increase a farm’s yearly revenue.
What is the business model of a Christmas tree farm?
Selling Christmas trees generates revenue for a Christmas tree company. Trees may be sold already cut (precut), or they can be cut down by the people who bought the tree (u-cut).
How much money may you charge your customers?
A u-cut tree costs roughly $46 on average. Pre-cut trees in retail shops are substantially more expensive.
How profitable can a Christmas tree farm be?
A u-cut tree farm with 200 trees per acre ready for harvesting each year might potentially earn $9,200 per acre each year. However, most farms do not make as much money. Because there is a limited supply of Christmas trees in any given region, many businesses make a profit of between $15,000 and $20,000.
How can you increase the profitability of your company?
Growing other plants (such as pumpkins) and supplying other goods might help Christmas tree farms generate extra money and profits. Many farms offer wreaths in addition to Christmas trees. Wreaths may be sold for up to $100, and six to eight can be made in an hour.
STEP 2: Establish a legal entity
Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most frequent business structure forms.
If your Christmas tree farm is sued, becoming a formal business organisation, such as an LLC or corporation, prevents you from being held personally accountable.
STEP 3: File your taxes
Before you can begin for business, you must register for a number of state and federal taxes.
To register for taxes, you will need to get an EIN. It’s really simple and completely free!
STEP 3: File your taxes
Before you can begin for business, you must register for a number of state and federal taxes.
To register for taxes, you will need to get an EIN. It’s really simple and completely free!
Create a net 30 account.
Net 30 accounts are used to develop and grow company credit while also increasing cash flow. Businesses use a net 30 account to purchase items and refund the whole debt within a 30-day period.
Many net 30 credit suppliers submit information to the main business credit agencies (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how firms establish business credit in order to get approved for credit cards and other lines of credit.
Apply for a business credit card.
Obtaining a business credit card benefits you in the following ways:
Put all of your company’s costs in one location to separate personal and business spending.
Build your company’s credit history, which will be important for raising funds in the future.
STEP 5: Establish business accounting
Recording your numerous costs and sources of revenue is crucial to assessing your company’s financial status. Keeping precise and thorough accounting also makes yearly tax filing much easier.
STEP 6: Obtain all required permissions and licences
Failure to get appropriate permissions and licences may result in significant penalties or possibly the closure of your firm.
Requirements for State and Local Business Licensing
To run a Christmas tree company, some state permissions and licences may be required. Visit the SBA’s reference to state licences and permits to learn more about licencing requirements in your state.
For additional information on local licences and permissions, please visit:
Check with the clerk’s office in your town, city, or county.
Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.
Workplace Safety Requirements
It is essential to follow all Occupational Safety and Health Administration regulations.
STEP 7: Obtain commercial insurance.
Insurance, like licences and permits, is required for your company to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.
There are several sorts of insurance plans designed for various types of companies with varying risks. If you are unaware about the hazards that your company may encounter, start with General Liability Insurance. This is the most popular coverage required by small companies, so it’s a good place to start for yours.
Workers’ Compensation Insurance is another important insurance product that many companies need. If your company will have workers, your state may require you to purchase Workers’ Compensation insurance.
STEP 8: Establish your brand
Your company’s brand is what it stands for, as well as how the public perceives it. A strong brand will help your company stand out from the crowd.
How to Market and Promote a Christmas Tree Farm
The internet makes it simple to sell and promote a Christmas tree company. Craigslist and social media ads may be utilised to reach out to prospective clients in the region. Furthermore, most states have extension offices or Christmas tree groups that keep directories of tree farms in the state. You might attract new clients during your company’s early selling years by giving discounts or special prices on trees. This strategy will draw them to your company, and their pleasure will inspire them to recommend it to their friends and family.
How to Keep Customers Returning
By developing a pumpkin patch, a Christmas tree farm may differentiate itself from others in the vicinity. Selling pumpkins around Halloween can help your tree farm get notice. This exposure to your Christmas tree farm will increase their likelihood of returning to buy one of your trees throughout the holiday season.
STEP 9: Create your company’s website.
After you’ve defined your brand and designed your logo, the next step is to build a website for your company.
While developing a website is an important step, some may be concerned that it is out of their grasp due to a lack of website-building skills. While this was a fair concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.
The following are the primary reasons why you should not put off developing your website:
Every genuine company has a website, period. When it comes to bringing your company online, it doesn’t matter what size or sector it is.
Social media accounts, such as Facebook pages or LinkedIn company profiles, are not a substitute for your own business website.
STEP 10: Install your company phone system.
Getting a phone for your company is one of the finest methods to keep your personal and professional lives distinct and private. That isn’t the only advantage; it also helps you automate your company, provides it legitimacy, and makes it simpler for prospective clients to identify and contact you.