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Evergreen Acres Christmas Tree Farm
Lindsay Fagnou
Elsa Guenther
Carmen Macnab
Earl Zimmerman
Introduction
1521 first Christmas tree in Alsace, Germany
1605 first decorated Christmas tree in Strasborg, Germany
Most Christmas tree farms are 3 generational
Mission Statement
To provide high quality, Saskatchewan grown Christmas trees, to the general public in an environmentally and customer friendly atmosphere.
Operations Plan
Business Overview
A Christmas tree farm on a 155 acre site4 different tree varieties grown:
Balsam fir (70%)
Balsam Fir
Business Overview
A Christmas tree farm on a 155 acre site4 different tree varieties grown:
Balsam fir (70%) White spruce (10%)
White Spruce
Business Overview
A Christmas tree farm on a 155 acre site4 different tree varieties grown:
Balsam fir (70%) White spruce (10%) Scotch pine (10%)
Scotch Pine
Business Overview
A Christmas tree farm on a 155 acre site4 different tree varieties grown:
Balsam fir (70%) White spruce (10%) Scotch pine (10%) Colorado (Blue) spruce (10%)
Colorado Spruce
Business Overview
A Christmas tree farm on a 155 acre site4 different tree varieties grown:
Balsam fir (70%) White spruce (10%) Scotch pine (10%) Colorado (Blue) spruce (10%)
Start planting 5 acres in year 1 and reach maximum production in year 15
LocationLocated near Meath Park,
30 kms NE of Prince Albert
Why There? Market Accessibility Climate Soil Type - sandy loam,
black/gray soil zone Land is currently in
summerfallow and hay
Equipment
Open Cab Tractor $12,000 Garden Tractor $4,500Sprayer $1,000Shaker $3,000Bailer $8,000Flat Deck Trailer $1,000Pruners 7@$110Shears 7@$100Chainsaws 2@$700
Equipment
Environmental ConditionsDrought is major risk factor involved
90% mortality rate in a bad drought year Lack of moisture can stunt growth of trees
Pests and Disease other major risk factor Increases in moisture and warmth increases pest and disease
infestations Cold winters in Prince Albert make conditions unfavorable
Management practices cannot get done if weather is not cooperating
Average Business YearMay - Incorporate Treflan and Sencor into planting site
- Plant 15,000 seedlings June - End of June shear and prune the Scotch pine July - End of July shear and prune rest of varietiesSeptember - Tinting of the Scotch pine
- Weed control using Round-upOctober - Harvest wholesale trees and store them as
neededNovember - Open the choose and cut service
Marketing Plan
Products and Service
Quality Christmas treeshome grown Christmas treesthree varieties of Christmas treeslandscape treesChoose and Cut Service
Pricing
Wholesale price decided by competition smaller orders - customer pays shipping larger orders - Evergreen pays shipping
Wholesale prices slightly lower than competition to attract customers that are importing trees from other provinces
Choose and Cut higher to compete with retailers
Promotion
Personal communication with customersword of mouthadvertising in newspapersoffering discountshot chocolate and cookies served at the
Choose and Cut
Place
Prince Albert areaurban centers in Saskatchewanrural community groups in Saskatchewanwholesalers in Alberta
Competitive AnalysisThere are 7 importers and 1 tree grower in
close proximitypopulation wanting artificial trees no other Choose and Cuts in the Prince
Albert area It would take 8 years for a competitor to
join the market
Marketing Strategy
“Our objective is to sell 600 trees a season through Choose and Cut by year 13.”
“Our objective is to sell 50% of our crop to Saskatchewan residents by Year 13.”
Human Resource Plan
Human Resources
One ownerRequirements
arrange transportation of needed supplies promote relationships with wholesalers marketing, operational, and financial skills hire, organize, and train the tree laborer staff maintain the equipment used
Owner
Christmas tree courseIdeal for an established farmer
Year 1 5 13 20Owner's income 2,000.00$ 3,060.00$ 30,000.00$ 44,000.00$
Seasonal Workers
Requirements class 5 drivers license willingness to work
hard good interpersonal
skills experience with trees
and machinery is an asset
On-site trainingDuties include
seeding pruning and shearing harvesting ‘Choose and Cut’
Workers wages
Year 1 5 13 20Hourly wage 8.00$ 8.66$ 10.15$ 11.65$
SeedingTotal Part-Time Workers 0 1 2 3Pruning/ShearingTotal Part-Time Workers 0 2 12 20HarvestingTotal Part-Time Workers 0 0 7 8
Total Part-Time Wages -$ 2,164.86$ 23,913.19$ 46,384.87$
Financial Plan
Financial Plan
Financial Plan spans over 20 year period profit is first seen in year 8 so a 20 year period
is needed to show realistic IRR and NPV
-50,000
0
50,000
100,000
150,000
200,000
250,000
1 3 5 7 9 11 13 15 17 19
Year
Dollars
Net Income(Loss)
Financing Plan
Common shares will be sold to the owner as well as family and friends.
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6Common Shares $150,000 $15,000 $15,000 $15,000 $15,000 $15,000
Year 1 Year 5 Year 10 Year 15 Year 20Dividends - - 5,412 42,821 92,883
Dividends = Net Profit * .50
Sensitivity Analysis
0
5
10
15
20
25
Internal Rate of Return
Sell
ing
Pri
ce
Seed
ling
Pri
ce
Dir
ect
Lab
out
Bal
sam
Fir
Whi
teSp
ruce
Sco
tch
Pin
e
Col
orad
oSp
ruce
WorstBaseBest
Survival Rate
Financial Ratios
23.1%25.8%32.4%26.1%23.0%Prod. Labour/Sales
217.337.8249.9283.5585.31Current Ratio
Year 20Year 15Year 10Year 5Year 1
ROE -3.2% -3.5% 5.5% 22.0% 23.2%
Future Considerations
Increase variety of treesIntroduce delivery to customersMore partnerships with retailersIncrease number of trees grownStart own nursery
Acknowledgments
Gordie McKay – McKay Tree FarmBill Brown and Marv Painter – U of SIrving John - John’s NurseriesHenry O’Reily - Come See Come Saw
Questions????