After coming up with the idea, the next step in starting your Christmas tree farm should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.

Related: How to write a business plan

Finding the perfect Christmas tree farm name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a Christmas tree farm, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: 3 steps to forming your LLC

Your farm could be on some property you own or rent from a landowner or farmer.   Accounting for loading areas and access paths, you can plant around 1,500 trees per acre.

The soil type, drainage, climate, etc., will impact the quality and types of species that can be grown. There are several popular types of Christmas trees include; Fraser fir, Douglas Fir, Balsam Fir, Virginia Pine, Scotch Pine, White Pine, Norway Spruce, Blue Spruce, and White Spruce), but research will be needed to see which ones will grow best on your property.

Related: Choosing a business location

In some states, a license is required before harvesting trees.  In addition, general business licenses may be required, such as a sales tax permit and an Employer Identification Number.

Related: What licenses do Christmas tree farms need?

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a Christmas tree farm is another.  In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

A Christmas tree farm will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a Christmas tree farm include social media marketing and online advertising, as well as brochures and flyers.  Developing a website can be a significant expense, but it can also give your Christmas tree farm greater visibility online.

Related: Low-cost ideas to market a new business

A Christmas tree farm needs several types of insurance for full coverage:

– General liability insurance can help protect you from third-party claims of bodily injury and property damage, which is especially important if customers are on your property.
– Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

The cost for Christmas tree farm insurance will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

You may need employees to help run your Christmas tree farm, or you may choose to be a one-person Christmas tree farmer.  While the majority of the business is extremely busy at the end of the year, make sure that you select people with appropriate experience. Even though the sales only happen around Christmas, it’s not a passive business. Christmas tree production requires constant monitoring to ensure the trees are free from insect and disease problems, and growers have a sellable product at the end of the year.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Setting up an accounting system for your Christmas tree farming operation is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business