Do you have an empty few acres of land that you’re looking to utilize in some way? Maybe it’s time to become a farmer – a tree farmer, that is. Knowing how to start a tree farm business is pretty simple at first. Get your land ready, find some trees that work in the soil that you have, and then plant them. Take care of them as they grow. The right trees for your area can produce a number of profitable items that go beyond lumber, so the structure of your tree farm is a critical component of your start-up process.
1. If you need immediate profits, start a tree nursery.
Some trees may take up to 50 years to be ready for harvest as a lumber supply. If you’re growing Christmas trees, it may take up to 10 years to have your first season of sales. If you’re looking for a way to start making money right away, then consider structuring your business as a tree nursery. Start growing trees from seeds consistently and in a year or two, you’ll have products to sell to homeowners, landscapers, and other contractors.
2. Know what your tax structure is going to be.
Even though you’re structured as a tree farm, the moment you sell something directly to a customer, you’re also considered a business. This means you’ll need to be licensed for the retail aspect of your business. Many tree farms also have orchards or plant gardens to supplement their income. This may require a secondary health license, specific equipment, and regular inspections. Any wood that is more than 6 years old is classified as timber and you may or may not qualify for a reforestation tax credit.
3. Create a regular cycle of profit.
The initial trap of the tree farm is that many believe they can only plant one or two types of crops. This just isn’t true. You can grow Christmas trees, stands for lumber, have an orchard, grow walnuts, and sell arts and crafts from pine cones. You could add a vineyard to start a winery. You could grow pumpkins for a pumpkin patch experience. The ways you can compliment your tree farm with other products are numerous. Don’t limit yourself to one form of profit. If you do, it might be a decade before you make any money.
4. Install a solid system of irrigation.
Unless you live out in the Pacific Northwest where it seems to rain almost every day, you’re going to need some way to water your trees when the dry season hits. A system of irrigation is mandatory for a large tree farm because otherwise you’ll spend all day watering your trees manually. Wet lands also attract pests that could damage your trees, so having a system of pest control in place will also be necessary so that your crop can grow.
5. Have your farm certified.
Many countries have their own organization that will certify a tree farm and its system of growth and sustainability. In the US, that organization is the American Tree Farm System [ATFS]. The ATFS will help you create a plan that will help you receive the certification that can be helpful for marketing purposes. Your local forest service office may also provide certification assistance and give you advice for which species to grow in your area.
6. Manage your crops.
Trees can be used for everything from power line poles to firewood. Caring for the trees may include trimming, pruning, and tying off the trunk each year to make sure the tree grows straight. Anything more than a few acres in size is going to require some help. You can hire independent contractors for that help if you wish, but you can’t direct them in how to actually do the job that needs to be done. Control is often necessary when it comes to managing trees, so filing for an EIN and hiring employees is usually something that eventually needs to be done.
7. Get into the landscaping business.
If you’ve got enough land to grow trees, then you might have enough land to provide a full landscaping business as well. Dedicate a portion of your land for the harvesting of top soil. Secure contracts with bark, gravel, and stone suppliers to sell at retail. If you have landscaping experience, you could even become a contractor. There are tax and licensing restrictions in place for contractors, however, that may limit what grants are available for the tree farm part of your business.
8. Market yourself.
Your land is the perfect place for people to gather together and enjoy trees. Once your saplings reach a certain size, invite people to stroll through your acreage. You might even consider installing walking paths, small gardens, and other park features. Not only will you create a great space where people can relax, you’ll be exposing them to your products.
Knowing how to start a tree farm business means having land, taking care of your trees, and being creative with your crop so that you have money every year. Trees aren’t just about timber, but they may be for taxation purposes. Follow these steps and you’ll be able to establish an environmentally friendly business that people are going to love.
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