Startup cost
$10k–$40k
TRUiC Business Ideas
How to Start a Christmas Tree Farm
Decision Snapshot
Christmas Tree
Idea Score
47
Profit margin
4%
Break-even
4 mo–12 mo
Time to launch
12 wk–36 wk
Demand trend
Stable
5-yr failure rate
—
Capital intensity
Medium
Time commitment
Seasonal
Part 1 - How to start a Christmas Tree Farm business - Background
Each year, many people decorate their homes and businesses during the holiday season by putting up Christmas trees. A Christmas tree farm grows and sells evergreens for those who want real trees (as opposed to artificial ones) during this time of year. There are 25-30 million real trees purchased each year, and the industry continues to grow. Some reports state that sales for artificial trees peaked in 2007 and have been declining since then, leaving plenty of room for growth in the real Christmas tree industry.
Our guide is in 3 parts:
- Part 1 - How to start a Christmas Tree business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
What are the costs involved in opening a Christmas tree farm?
The primary startup costs associated with opening a Christmas tree business are:
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acquiring land (at least 10 to 20 acres)
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preparing soil
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purchasing seedlings
Business owners that already have suitable land and a tractor can start up a tree farm for relatively little, as they can use their own land and prepare it themselves.
Owners that don’t have land can keep their initial investment low by purchasing acreage in a rural area where land is cheap. Alternatively, they can enter a sharecropping agreement with a landowner. In such an agreement, nothing is paid initially for the land, but profits are split. In an interview on PTMoney, Gregory Bartels, who has 40 years of experience in the industry, says 50/50 agreements are common.
Owners that don’t have their own tractor can hire a farmer to prepare their soil for them. According to Bartels, farmers generally charge about $1,000 to prepare 20 acres.
Investing in seedlings costs more than planting seeds. Business owners should plan on this expense, though, because seedlings shorten the time to harvest by about 2 years. Seedlings cost around $0.35 each, and business owners should budget for planting 200 per acre each year.
What are the ongoing expenses for a Christmas tree farm?
The ongoing expenses for a Christmas tree business include the costs of purchasing seedlings (200 per acre per year). For a ten acre farm, with seedlings priced at $0.35 each, 200 seedlings per acre per year should only cost $700 per year. Mowing and weed control are additional expenses, but these costs are relatively low for most business owners.
Who is the target market?
Christmas tree farms may sell trees to individuals, wholesalers, or nonprofit organizations, and many farms sell to all three types of customers. Of these three:
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Individuals will pay the most, but most families and businesses will buy only one tree.
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Wholesalers might purchase quite a lot of trees, but they frequently pay one-third of their retail price.
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Nonprofit organizations are often a happy medium, paying above-wholesale prices for several dozen trees that they’ll sell as a fundraiser.
Additionally, Christmas tree farms can sometimes sell one or two large trees at much higher rates than most individuals, wholesalers, or nonprofits will pay. Local governments and a few businesses might be willing to pay several hundred dollars for an especially tall tree. Most farms only have a few (if any) of these sales, but even just one or two sales like this can significantly boost a farm’s annual income.
How does a Christmas tree farm make money?
A Christmas tree business makes money by selling Christmas trees. Trees may be sold already cut (precut), or they may be cut down by the individuals who purchased the tree (u-cut).
How much can you charge customers?
The average price for a u-cut tree is about $46. Pre-cut trees at retail locations sell for significantly more.
How much profit can a Christmas tree farm make?
With 200 trees per acre ready for harvesting each year, a u-cut tree farm could theoretically bring in $9,200 per acre annually. Most farms don’t generate this much revenue, though. Many max out their profits between $15,000 and $20,000 because there is a limited demand for Christmas trees in any one area.
How can you make your business more profitable?
Christmas tree farms can add additional revenue streams and increase profits by growing other plants (e.g. pumpkins) and offering other products. In addition to Christmas trees, many farms also sell wreaths. Wreaths can be sold for up to $100, and it’s possible to make six to eight in an hour.
Day-to-Day and Growth
What happens during a typical day at a Christmas tree farm?
A Christmas tree farm is a highly seasonal business, so the day-to-day tasks of a business owner vary greatly with the season:
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Spring is the time for preparing soil and planting trees.
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Late spring and early summer is the time for trimming trees (which is done once per year).
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Summers are spent mowing between rows and applying weed control chemicals as necessary.
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Late fall and early winter are the time to cut and sell trees.
When selling trees during the Christmas season (primarily Thanksgiving to Christmas), business owners often work long days. Because the season for selling trees is so short, as much time as possible is devoted to cutting trees (for precut), helping customers cut their own trees (for u-cut), and bagging and transporting trees.
What are some skills and experiences that will help you build a successful Christmas tree farm?
In order to successfully grow Christmas trees, it’s necessary to be familiar with the agricultural practices that work in a particular region. Business owners who haven’t previously operated farms of any kind should consider taking local agricultural classes and working on a nearby farm for a season. Talking with as many area farmers as possible can also provide insights that come from years of growing crops in the region.
What is the growth potential for a Christmas tree farm?
Most Christmas tree businesses serve a local geographic area. Managing multiple areas in different regions isn’t viable, and transporting fully grown Christmas trees long distances is expensive. Many farms will transport trees to a retail location in a nearby city, but it rarely makes financial sense to ship trees across several states (especially since there are tree farms in all 50 states, including Hawaii).
What are some insider tips for jump starting a Christmas tree farm?
When designing the layout for a Christmas tree business, it’s important to not forget about accessing the trees once they’re grown. There should be strategically located loading areas, and access points should be located every 12 to 15 rows.
Although a single acre can support 1,500 trees, most tree farms only plant 200 per acre each year. Trees take around 8 years to reach 5 to 7 feet high, which is the most popular height for Christmas trees. (90 percent of trees sold are in this range.) Staggering plantings helps ensure a stable income once a farm is established.
Because it takes eight years for trees to mature, business owners should budget for eight years without any income. During this time, they’ll need to pay for mowing, weed control and more seedlings.
How and when to build a team
A single person is able to manage a small Christmas tree business for most of the year. During the Christmas season, business owners may want to hire laborers so they can maximize the number of trees they are able to sell.
Part 2 - Is a Christmas Tree Farm business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Christmas Tree business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Christmas Tree Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Christmas Tree Farm business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.