Do you want to start a Christmas tree farm business?

Have you been thinking of starting a tree farm? There is no doubt a Christmas tree farm is a lucrative business venture that promises a handsome return. Christmas is undoubtedly the most popular annual celebration that is widely observed across the world. Amongst the must-haves for a Christmas celebration is a having a Christmas tree. If you’re thinking of how to transform your piece of land to a profitable venture with less risks and easy maintenance, planting Christmas trees is a great idea.

The advantage of managing a Christmas tree farm is it comes with very little maintenance which allows you to concentrate and pursue other ventures. If well taken care of, you will enjoy great profits for an extended period of time. Without the need to spend so much money running a Christmas tree farm, it’s definitely a smart business idea that will always offer a product that is needed on the market. It takes about eight years for Christmas trees to fully mature, so it requires good planning, strategy execution and patience to see the fruits. To be a successful Christmas tree farmer, you need to plan early and lay good strategies at the beginning.

To avoid undergoing the stress of what needs to be done, this well-articulated Christmas tree farm business plan experts with guide you every step of the way.

Executive Summary

2.1 The Business

The Christmas tree farm will be registered as Cole Christmas Tree Farm and will be based in Spring Texas. Starting a Christmas tree farm business requires careful planning an expert management team to oversee and coordinate business activities. Since the owners of the business have property in Spring, Texas, it was found to be the best place to set up the business. The tree farm sits in a strategic location within easy reach of both individuals as well as corporate customers. In addition, the Christmas tree farm is located close to large cities that offer a stable and ready market for products. Cole Christmas Tree Farm will be owned and run by Stephen Copeland who is a Botanist by profession. Copeland has had a successful long career in Botany where he has served in various capacities in different organizations.

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2.2 Management

The tree farm will be managed by Mr. Copeland who will be assisted by his son, Andrew Copeland who is a recent business Management graduate from Texas State University. The management structure has been well-planned to ensure efficiency is achieved and professionalism is not compromised.

2.3 Customers

The tree farm will provide various types of Christmas tree varieties to both the residential and commercial market in nearby towns and cities. The aim of starting the business is to make sales both to individual buyers who need a Christmas tree in their home and various distributors and retailers. For corporate bulk sales, the trees are sold wholesale prices.

2.4 Company Target

Cole Christmas Tree Farm aims to start a Christmas tree farm that will be the most famous supplier of quality Christmas trees to both residential and commercial clients. The business is planning to leverage its success by introducing a wide variety of tree varieties to give customers a chance to choose from different species. Thanks to diversification, Mr. Copeland hopes to tap into a market where existing Christmas tree farms only focus on selling one or very few Christmas tree varieties.

Christmas tree farm business plan - 3 Years Profit Forecast

Company Summary

3.1 Company Owner

Mr. Copeland is an expert in Botany and has acquired immense experience in core areas of botany such as plant diversity, economic botany, plant breeding and dendrology among others. He has worked several in both local and international organizations spanning a period of over thirty years. During the course of his career, Stephen Copeland has attended numerous high-profile international meetings and conferences in different parts of the world.

3.2 Reason for Starting the Business

Throughout Copeland’s entire career, he has always strived to provide advice and expertise on how to utilize plant diversity for economic purposes. His in-depth study of tree species has enabled him understand how to successfully run tree farms and provide the best quality species. Christmas is a major holiday and the demand for Christmas trees is always at high but there is still lack of sufficient suppliers to meet the demand. Understanding the need to diversify Christmas tree species and offer clients better exemplary service their money, Mr. Copeland decided to start a Christmas tree farm to ensure customers can order nice Christmas trees.

3.3 How the Business will be started

In order to ensure the Tree Farm succeeds, Mr. Copeland has come up with a comprehensive Christmas tree farming business plan. The plan is intended to forecast what is required to start and successfully run the Christmas tree farm. With assistance from financial and business set-up experts, Copeland has forecasted amounts below required for investment group business plan, expenses, assets as well as loans required for the start-up.

Christmas tree farm business plan - StartUp Coast

A full breakdown of how much is needed to fund the business, sum assets, start-up funding, total liabilities, liabilities, total planned investment, capital required, capital and liabilities as well as start-up expenses as forecasted is indicated below.

Start-up Expenses 
Research and Development$10,000
Expensed Equipment$15,000
Start-up Assets$0
Cash Required$60,000
Start-up Inventory$30,000
Other Current Assets$10,000
Long-term Assets$4,000
Total Requirements$15,000
Start-up Expenses to Fund$20,000
Start-up Assets to Fund$22,000
Non-cash Assets from Start-up$7,000
Cash Requirements from Start-up$0
Additional Cash Raised$30,000
Cash Balance on Starting Date$10,000
Liabilities and Capital$0
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$0
Other Current Liabilities (interest-free)$0
Planned Investment$0
Investor 1$10,000
Investor 2$12,000
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$55,000
Total Funding$70,000

Services for Customers

Cole Christmas Tree Farm will provide different types of Christmas trees for their esteemed clients within Spring, Texas and other regions across the state and country. The unique thing about Cole Christmas Tree Farm will be the availability of various Christmas tree species allowing customers to make a choice from various options available. Emphasis has been placed on providing the best quality Christmas trees to ensure customers get full value for their money. Each of the farm’s products will meet the best quality standards.

Cole Christmas Tree Farm intends to offer the following types of Christmas trees:

  • Fir Trees which include Douglas Fir, Balsam Fir and Fraser Fir
  • Pine Trees comprising of Afgan Pine, White Pine and Scotch Pine
  • Cypress Trees including Leyland Cypress and Carolina Sapphire
  • Cedar Trees such as Eastern Redcedar

Clearly outlining the types of products to be offered is a critical issue that has been by Cole Christmas Tree Farm when planning how to start a Christmas tree business.

Marketing Analysis of Christmas Tree Business

In a bid to counter challenges that arise when starting a tree farm business, Cole Christmas Tree Farm has carried out an accurate and extensive market analysis. A detailed marketing analysis is aimed at helping the business to understand how to start a Christmas tree farm. This information is critical as it will guide the farm’s strategies that will be implemented over the next few years after inception of the business. This information is included in the initial Christmas tree farm business plan so that all future plans are made in accordance to the facts presented in the analysis of the market niche. Given the importance of having a solid marketing analysis for Cope Christmas Tree Farm, Mr. Copeland obtained help from marketing experts to help develop a solid marketing plan in line with current market demands.

Christmas is a widely celebrated global holiday and as such, there is an increased demand for Christmas trees and other decoration which is expected to become higher in the future. Decorating Christmas trees is a tradition many people cherish. More individuals and businesses are increasingly putting up Christmas trees. According to statistics, about 10,000,000 artificial Christmas trees are sold in the United States each year but this is going down. This signifies the demand for live Christmas trees remains is rapidly increasing and a tree farm would definitely yield good results if well managed.

The management of Cole Christmas Tree Farm knows the success or failure of the business wholly depends on how the enterprise will market itself to its target customers. For marketing analysis and strategy to succeed, it is critical to identify the target audience and prospective customers. Stephen Copeland has done extensive market research and sought help from experts to identify target customers and come up with a defined marketing strategy.

5.1 Market Segmentation

Cope Christmas Tree Farm has identified the following classes of target audiences which it intends to make them potential clients of the tree farm.

Christmas tree farm business plan - Market Segmentation

A comprehensive market segment that outlines the business target audience is explained as follows.

5.1.1 Individuals

Individual customers will be catered for under the retail scheme. Customers here are diverse and range from residents who live near the tree farm and can therefore, easily buy a Christmas tree from the farm. This category covers all customers living around the Cole Christmas Tree Farm as well as those who reside in the nearby cities and towns. Given the high population of neighboring towns and cities, the demand from individual buyers is extremely high and Cole Farm has to figure out how to ensure there is a steady supply of Christmas trees during peak time. Individual customers are very diverse and consist of people drawn from various social, religious and cultural backgrounds but who dedicate themselves to the spirit of Christmas. Cole Christmas Tree farm has identified individual customers as a lucrative market segment that needs to be adequately catered for.

5.1.2 Companies and Businesses

Cole Christmas Tree Farm intends to sell Christmas trees to various businesses which in this regard, are considered as wholesale customers. Businesses will buy Christmas trees from the business in bulk at wholesale prices and thereafter, sell them to their customers are retail prices. Given the rising demand for Christmas trees, retailers are always on the lookout for suppliers who can guarantee a steady supply chain. Since they purchase in bulk, corporate customers are key to the success of the tree farm considering revenue obtained from their purchases is high. When thinking of how to start a Christmas tree farm, the business knows wholesale buyers are critical for success and have to be accorded utmost professionalism.

5.1.3 Nonprofit Organizations

Cole Christmas Tree Farm hopes to sell their trees to Nonprofit organizations who in most cases, often have no problem spending more to buy trees compared to businesses buying on a wholesale basis. In most cases, this category of clients will buy many Christmas trees and sell them during fundraising and charity events.

5.1.4 Local Councils and Governments

Though not as common as the above customer groups, Cole Christmas Tree Farm will at times sell a few large trees to local councils and governments. Local councils will in most cases buy a tree or two, but will pay a much higher rate than individual customers, wholesale customers and nonprofit organizations. These sales are not easy to come by, but when they do, Cole Farm will earn a significant amount of income.

Market Analysis       
Potential CustomersGrowthYEAR 1YEAR 2YEAR 3YEAR 4YEAR 5CAGR
Companies and Businesses25%20,00025,00030,00035,00040,00010.00%
Non Profit Organizations18%60008,00010,00012,00014,00014.00%
Local Council &Government22%900010,50012,00013,50015,0008.00%
Total100%45,00056,500                68,00079,50091,00010.00%

5.2 Business Target

The business aims to be the best Christmas tree grower in Spring and the entire Harris County in Texas. Cole Christmas Tree Farm hopes to recover the initial capital within the first three years of starting the business as well as grow annual sales by an average of 20%. In order to meet its targets, the farm will emphasize on superb customer service and offer quality Christmas trees. There are concerted efforts to ensure every customer is welcomed in a friendly environment and treated with respect and dignity. The aim of this Christmas tree farm business is to build long-term and sustainable relationships with customers.

5.3 Product Pricing

Product pricing is a key factor that will affect the sales of Christmas products and buyers are keen when it comes to pricing. For this reason, Cole Christmas Tree Farm endeavors to strategically set prices in order to attract more customers, but at the same time, ensure good profits are realized. Given the fact trees take an average of 6-8 years to mature, it makes sense for the business to obtain good profits. Product prices have been determined after doing extensive market research to determine what competitors are charging.

Cole Christmas Tree Farm intends to charge the following average prices for its products:

  • Fir Trees $130.00
  • Pine Trees $200.00
  • Cypress Trees $300.00
  • Cedar Trees $400.00


After the completion of an extensive market analysis, Mr. Copeland has come up with a winning strategy that will be used to target and reach out to identified customer segments in Section 5.1. The sales strategy has been carefully formulated by the Founder of Cope Christmas Tree Farm with assistance from experts.
The sales strategy entails the following aspects:

6.1 Competitive Analysis

The tree farm will face competition as there are other similar establishments around Spring, Texas and neighboring towns and cities. While deliberating how much does a Christmas tree cost , Cole Farm will keep its prices slightly below the market price for the first few years in order to attract more customers and gain a market presence. Given the fact that the farm sits on a large acreage, it will be easy to strike a balance between offering lower prices and securing good profit margins. The business also understands the competitive nature of the business and thus understands the need to be unique and innovative.

6.2 Sales Strategy

With help from experts, Cole Christmas Tree Farm has come up with an ambitious and exciting strategy to make sure business goals are realized. These strategies entail:

  • Maintaining superb quality of trees by ensuring they are well taken care of by professionals from the time the trees are planted until they mature.
  • Sell trees at a slightly lower price than competitors and at the same time, offer amazing discounts on bulk purchases.
  • The farm will be established in an area that is easily accessible with a good road network to allow customers to visit the business.
  • Cole tree farm will focus on selling a great variety of tree species that comes in different sizes and shapes to ensure customers can choose from amongst many options.
  • The business will study the market to understand what customers want, identify challenges and loopholes to come up with products that will satisfy client expectations.
  • Selectively offer free delivery services especially to a few local residents with an aim of building lasting relationships.
  • Intensively market the tree farm on local media platforms, events and exhibitions as well as digital media platforms i.e. social media.
  • Build a digital platform to allow customers purchase Christmas trees online without having to physically visit the property.


6.3 Sales Forecast

The business strongly believes in its unique, quality-oriented and superb customer service to attract a loyal customer base. For this reason, the business has forecasted a steady increase in its annual sales. After carefully analyzing the market segmentation, the tree farm has forecasted to achieve the following sales on an annual basis.

The information in the table and column charts below contains details about sales forecasts.

Christmas tree farm business plan - Unit Sales
Sales Forecast   
Unit SalesYear 1Year 2Year 3
Fir Trees200,000300,000260,000
Pine Trees300,000350,000450,000
Cypress Trees350,000450,000480,000
Cedar Trees500,000550,000600,000
TOTAL UNIT SALES1,350,0001,650,0001,790,000
Unit PricesYear 1Year 2Year 3
Fir Trees$130.00$150.00$170.00
Pine Trees$200.00$300.00$400.00
Cypress Trees$300.00$400.00$500.00
Cedar Trees$400.00$500.00$600.00
Fir Trees$150,000$200,000$300,000
Pine Trees$100,000$120,000$200,000
Cypress Trees$30,000$40,000$60,000
Cedar Trees$120,000$170,000$200,000
Direct Unit CostsYear 1Year 2Year 3
Fir Trees$0.50$0.60$0.70
Pine Trees$0.30$0.35$0.40
Cypress Trees$0.25$0.30$0.35
Cedar Trees$2.00$3.00$4.50
Direct Cost of Sales   
Fir Trees$80,000$100,000$150,000
Pine Trees$45,000$70,000$105,000
Cypress Trees$15,000$25,000$40,200
Cedar Trees$14,000$36,000$70,000
Subtotal Direct Cost of Sales$154,000$231,000$365,200

Personnel Plan

In order to be the market leader in selling Christmas trees, Cole Christmas Tree Farm plans to put together a dedicated, knowledgeable and experienced staff to be involved in day-to-day operations of the business. The following plan is a proposed personnel plan to start Christmas farm as well as their average salaries.

7.1 Staff Plan

Mr. Stephen Copeland who is the business owner will be the General Manager of Cole Christmas Tree Farm. In addition, the business intends to hire the following staff.

  • 1 Manager to oversee operations and administration of the tree farm
  • 1 Cashier to receive and process payments from customers
  • 1 Administrator to perform general admin duties and work closely with the manager
  • 2 Sales and Marketing Executives responsible for marketing the Christmas tree farm
  • 2 Gardeners to take general care of the farm and ensure favorable conditions for growth of trees
  • 2 Tree Farmers to provide advice, supervise and monitor the growth and maintenance of trees
  • Cleaners to perform general cleaning duties in the business premises
  • Drivers to run various errands for the business as well as deliver customer orders

To keep standards high, all employees will undergo intensive interviews and vigorous on-job training before assuming their positions.

7.2 Average Staff Salaries

The table below clearly illustrates forecasted staff data and the salaries they will earn in the first three years.

 Personnel Plan   
 Year 1Year 2Year 3
2 Sales and Marketing Executives$100,000$120,000$130,000
2 Gardeners$55,000$65,000$75,000
2 Tree Farmers$120,000$160,000$180,000
Total Salaries$500,000$598,300$665,500

Financial Plan

The business enterprise come up with a detailed and elaborate financial plan that will help the business attain its goals. The Cole Christmas Tree Farm will be financed by Stephen Copeland and two investors. At the moment, the funding is sufficient to cater for starting a Christmas tree farm business so no outside loan is required.

8.1 Important Assumptions

Cole Christmas Tree Farm’s financial projections have been forecasted based on the assumptions below.

 General Assumptions   
 Year 1Year 2Year 3
Plan Month123
Current Interest Rate8.00%10.00%11.00%
Long-term Interest Rate6.00%6.00%6.00%
Tax Rate15.00%16.00%18.00%

8.2 Brake-even Analysis

The graph and table below illustrates Cole Christmas Tree Farm Brake-even Analysis.

Christmas tree farm business plan - Brake-even Analysis
 Brake-Even Analysis 
Monthly Units Break-even4000
Monthly Revenue Break-even$100,000
Average Per-Unit Revenue$200.20
Average Per-Unit Variable Cost$0.40
Estimated Monthly Fixed Cost$196,410

8.3 Projected Profit and Loss

The charts below seek to explain the company’s anticipated Profit and Loss statistics based on monthly and annual rates. Using the information, it is easier to see forecasted financial figures for Cole Christmas Tree Farm.

 Pro Forma Profit And Loss   
 Year 1Year 2Year 3
Direct Cost of Sales$45,000$50,000$60,000
TOTAL COST OF SALES$45,000 $50,000 $60,000
Gross Margin$300,000$350,000$400,000
Gross Margin %80.00%84.00%90.00%
Sales and Marketing and Other Expenses$2,000$4,000$6,000
Leased Equipment$0$0$0
Payroll Taxes$25,000$30,000$40,000
Total Operating Expenses$150,000$200,000$250,000
Profit Before Interest and Taxes$70,000$80,000$90,000
Interest Expense$0$0$0
Taxes Incurred$12,000$15,000$18,000
Net Profit$60,000$75,000$90,000
Net Profit/Sales20.00%30.00%40.00%

8.3.1 Monthly Profit

Christmas tree farm business plan - PROFIT MONTHLY

8.3.2 Yearly Profit

Christmas tree farm business plan - PROFIT YEARLY

8.3.3 Monthly Gross Margin

Christmas tree farm business plan - GROSS MARGIN MONTHLY

8.3.4 Yearly Gross Margin

Information about profit and loss as well as total cost of sales has been summarized in the chart below.

Christmas tree farm business plan - GROSS MARGIN YEARLY

8.4 Projected Cash Flow

Cole Christmas Tree Farm projected cash flow is indicated in the column diagram below.

Christmas tree farm business plan - Projected Cash Flow

The table below shares comprehensive data about pro forma cash flow, subtotal cash received, subtotal cash spent, sub-total cash from operations and sub-total spent on operations.

 Pro Forma Cash Flow   
Cash ReceivedYear 1Year 2Year 3
Cash from Operations   
Cash Sales$30,000$35,000$40,000
Cash from Receivables$5,000$7,000$9,000
SUBTOTAL CASH FROM OPERATIONS$35,000 $42,000 $49,000
Additional Cash Received   
Sales Tax, VAT, HST/GST Received$0$0$0
New Current Borrowing$0$0$0
New Other Liabilities (interest-free)$0$0$0
New Long-term Liabilities$0$0$0
Sales of Other Current Assets$0$0$0
Sales of Long-term Assets$0$0$0
New Investment Received$0$0$0
SUBTOTAL CASH RECEIVED$35,000 $42,000 $49,000
ExpendituresYear 1Year 2Year 3
Expenditures from Operations   
Cash Spending$15,000$17,000$19,000
Bill Payments$12,000$20,000$35,000
SUBTOTAL SPENT ON OPERATIONS$27,000 $37,000 $54,000
Additional Cash Spent   
Sales Tax, VAT, HST/GST Paid Out$0$0$0
Principal Repayment of Current Borrowing$0$0$0
Other Liabilities Principal Repayment$0$0$0
Long-term Liabilities Principal Repayment$0$0$0
Purchase Other Current Assets$0$0$0
Purchase Long-term Assets$0$0$0
SUBTOTAL CASH SPENT$28,000 $40,000 $56,000
Net Cash Flow$10,000$14,000$16,000
Cash Balance$18,000$20,000$22,000

8.5 Projected Balance Sheet

The projected balance sheet below indicates key information pertaining to Cole Christmas Tree Farm’s total assets, total liabilities, total current assets, total liabilities and capital, total long-term assets, total capital and subtotal current liabilities.

 Pro Forma Balance Sheet   
AssetsYear 1Year 2Year 3
Current Assets   
Accounts Receivable$9,000$11,000$14,000
Other Current Assets$2,000$2,000$2,000
TOTAL CURRENT ASSETS$152,000 $196,000 $240,500
Long-term Assets   
Long-term Assets$8,000$10,000$12,000
Accumulated Depreciation$11,000$13,000$15,000
TOTAL LONG-TERM ASSETS$1,000 $500 $300
TOTAL ASSETS$150,000 $180,000 $210,000
Liabilities and CapitalYear 1Year 2Year 3
Current Liabilities   
Accounts Payable$10,000$12,000$14,000
Current Borrowing$0$0$0
Other Current Liabilities$0$0$0
Long-term Liabilities$0$0$0
TOTAL LIABILITIES$10,000 $12,000 $14,000
Paid-in Capital$20,000$20,000$20,000
Retained Earnings$25,000$50,000$75,000
TOTAL CAPITAL$150,000 $180,000 $210,000
TOTAL LIABILITIES AND CAPITAL$165,000 $195,000 $225,000
Net Worth$190,000$210,000$250,000

8.6 Business Ratios

The following table has data regarding Cole Tree Farm business ratios, net worth, total assets and ratio analysis.

 Ratio Analysis    
Sales Growth5.00%20.00%40.00%3.00%
Percent of Total Assets    
Accounts Receivable5.00%4.00%3.00%8.00%
Inventory2.00%1.80. %1.60%9.00%
Other Current Assets1.00%2.00%1.95%20.00%
Total Current Assets100.20%130.10%150.25%44.00%
Long-term Assets-5.00%-20.00%-25.30%40.40%
TOTAL ASSETS100.00%100.00%100.00%100.00%
Current Liabilities4.00%3.00%2.50%23.70%
Long-term Liabilities0.00%0.00%0.00%20.50%
Total Liabilities4.10%2.00%1.50%44.10%
NET WORTH80.30%90.00%100.10%34.00%
Percent of Sales    
Gross Margin80.10%82.00%84.00%0.00%
Selling, General & Administrative Expenses73.00%70.00%65.00%62.00%
Advertising Expenses2.00%1.00%0.20%1.20%
Profit Before Interest and Taxes22.00%25.00%28.40%1.50%
Main Ratios    
Total Debt to Total Assets2.08%1.00%0.66%45.00%
Pre-tax Return on Net Worth60.00%70.00%72.20%1.20%
Pre-tax Return on Assets54.20%57.00%60.00%5.00%
Additional RatiosYear 1Year 2Year 3 
Net Profit Margin15.20%18.10%20.00%N.A.
Return on Equity40.00%43.00%46.00%N.A.
Activity Ratios    
Accounts Receivable Turnover345N.A.
Collection Days8289104N.A.
Inventory Turnover161922N.A.
Accounts Payable Turnover13.113.415N.A.
Payment Days252525N.A.
Total Asset Turnover1.61.41.2N.A.
Debt Ratios    
Debt to Net Worth0-0.01-0.03N.A.
Current Liab. to Liab.000N.A.
Liquidity Ratios    
Net Working Capital$100,000$120,000$140,000N.A.
Interest Coverage000N.A.
Additional Ratios    
Assets to Sales0.350.380.41N.A.
Current Debt/Total Assets3%2%1%N.A.
Acid Test202427N.A.
Sales/Net Worth1.310.4N.A.
Dividend Payout000N.A.

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