Looking for a peach and apricot farm business plan? You're in the right place.
An orchard is paid in a few weeks and billed all year. A lender, a landlord or a seller holding a note will ask how much it costs to reach the first sale, what each acre earns, what a spring freeze does to the cash, and when the farm turns a profit. Most templates leave those cells blank.
In this article we'll walk through a complete sample business plan for a leased 56-acre orchard near Kansas City, Missouri, section by section. We'll cover the executive summary, the SWOT analysis and, in particular, all of the financials.
Here's what you'll take away:
- The summary: see how to put land, trees, outlets and the ask on one page, so a reader knows what you need and why
- The SWOT analysis: learn how to name a freeze risk and a first-time grower's gaps without losing the reader
- The start-up budget: find out what tractors, a cooler, a stand and 16 acres of new trees cost against the reserve that carries the farm to its first sale
- The outlet mix: compare the stand, markets, wholesale and pre-order boxes, and see how pounds per acre turn into revenue
- The first year, month by month: spot the five months with no sales before you reach them
- The five-year profit, cash flow and balance sheet: understand how each crew hire and tree block shows up in the numbers
- The short-crop case: have an answer ready for the "what if revenue is 20% short?" question, and the steps the owners take in response
If you're planning a peach or apricot farm, read this before you write your own. The farm is fictional, so take what fits your land and change the rest.
In this plan
Want a peach and apricot farm business plan you can edit for your own business? Get the peach and apricot farm business plan template and build it in the Toolkit.
Stone Field at a Glance
Stone Field is a Missouri limited liability company that leases and operates a 56-acre peach and apricot orchard north of Kansas City. It opens on 1 January 2027, after the retiring grower hands over the lease, the trees and a customer email list. Jared Wilson, a retired agronomist, runs the trees. His wife Susan, a retired hospital administrator, runs the farm stand and the market stalls. They own 100% of the company.
The orchard has 34 planted acres, all bearing in 2027, and 22 acres of open ground. Fruit sells from mid-June to early October through four outlets: a farm stand with pick-your-own, farmers market stalls, wholesale accounts, and pre-order boxes with preserves.
The company raises $515,000: $270,000 of the Wilsons' retirement savings, a $195,000 bank loan and a $50,000 note from the seller. Of that, $306,000 buys equipment, packing and cold storage, the stand fit-out and 16 acres of new trees, $18,000 covers legal, licensing and launch marketing, and $191,000 sits as a cash reserve for the five months before the first sale and for a poor crop.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $438,000 | $495,000 | $535,000 |
| Net income after start-up costs | ($44,386) | $7,668 | $22,064 |
| Closing cash | $178,343 | $173,891 | $181,284 |
Year 1 is a loss. Eight months of the year earn nothing or less than they cost, and four months from June to September earn the year. Profit arrives in Year 2 and is thin until the new trees bear: net income is 1.5% of revenue in Year 2 and 4.1% in Year 3, then 9.7% in Year 5.
The plan also runs a short-crop case with 20% less revenue in every year. With smaller picking crews, 8% less spent on orchard inputs, a cut in marketing and Jared's pay, and no second harvest crew, cash stays positive in all five years, though the orchard loses money until Year 4.
The Orchard and the Lease
Legal name: Stone Field, LLC, a Missouri limited liability company. Owners: Jared and Susan Wilson, 50% each. Land: 56 acres under a 15-year lease with two renewal options, set at about $450 an acre plus a building charge for the stand, pack shed and cooler pad ($31,200 in Year 1, rising 3% a year). Trees: 34 planted acres in their sixth to eleventh year: 28 acres of peaches and 6 of apricots. Two of the peach acres are the oldest and come out in the winter of 2028-29. Open ground: 22 acres, of which 16 are planted in the first spring. Start date: 1 January 2027, ahead of pruning and bloom.
What the farm sells
| Outlet | How it works | Year 1 share of revenue |
|---|---|---|
| Farm stand and pick-your-own | Weekend U-pick, daily stand sales June to October, preserves and gift boxes in the holidays | 46% |
| Farmers market stalls | Two stalls in the Kansas City area, Saturdays and one weekday | 25% |
| Wholesale | About 8 grocers, restaurants and a food co-op, sold by the 20-pound case | 18% |
| Pre-order boxes, preserves and gift boxes | 25-pound boxes ordered by email, jam made by a licensed co-packer | 11% |
Goals for the first three seasons
- A first season that sells about 172,000 pounds of fruit and reaches 3,600 households that buy at least once.
- Net income above zero in 2028, the second season.
- The 16 acres planted in spring 2027 trained and pruned on schedule through the 2028 season.
- A written frost plan and a crop-insurance quote in hand before the first bloom.
Permits and food safety
Fresh-fruit sales need a Missouri business license, local sales-tax registration and a written food-safety plan. Preserves are made by a licensed co-packer, and the label wording is checked with the Missouri Department of Agriculture before the first batch. The farm confirms whether the federal produce safety rule applies at its sales level, and some wholesale buyers will ask for a third-party audit, which is budgeted at $3,500 a year with water tests and permits.
The Kansas City Fruit Market
Where the fruit comes from
Much of the peach fruit on supermarket shelves in the Midwest is shipped in from other growing regions; the plan does not put a figure on the share. That fruit is typically cheaper per pound and available earlier, and it is picked firm so it ships. A tree-ripened peach sold the day it is picked is a different product, and it is the only one a local grower can sell at a premium. Apricots are the rarer item: they bloom early, and local supply is small and unreliable.
Spring freeze
The main risk to the market is the same as the main risk to the farm. Peach buds are lost in cold winters and spring freezes. A University of Missouri Extension article reported that one January cold night injured 29% to 74% of Redhaven floral buds at a research center, depending on the rootstock. A hard freeze at bloom can destroy most of a crop in one night. The plan treats a sharp short crop as a normal planning event, not a surprise, and the Year 1 sales figures already sit at the cautious end of a full crop.
Who else sells stone fruit nearby
| Alternative | What it offers | Why a shopper picks it | How Stone Field differs by design |
|---|---|---|---|
| Supermarket peaches | Year-round supply, lowest shelf price | Convenience | Picked ripe and sold within days |
| Other orchards in the metro area | Established stands, often with apples and pumpkins | Familiar names and long customer histories | Peach and apricot specialty, with pick-your-own on weekends |
| Farmers market produce vendors | Mixed fruit and vegetables | Same Saturday trip | Steady supply of one fruit, with pre-order boxes |
| Roadside sellers of trucked-in fruit | Cheap fruit, sometimes labeled as local | Price | The farm's own trees, with the block named at the stand |
The table describes categories, not a ranking. Prices change weekly and are not quoted for competitors.
SWOT
| Strengths | Weaknesses |
|---|---|
| Bearing trees from day one, so revenue starts in the first season | The farm depends on a few bloom weeks each spring |
| Seller hands over a list of repeat customers | First-time growers; neither owner has run a commercial orchard |
| Four outlets spread the risk of a weak stand season | Five months of cost before the first sale |
| Opportunities | Threats |
|---|---|
| Shoppers who prefer local, tree-ripened fruit | Spring freeze or hail on an uninsured crop |
| Pre-orders and preserves lengthen the season to December | Brown rot and insect pressure in wet summers |
| New blocks bear from the third season | Labor costs rising faster than 3% a year |
Who Buys Stone Fruit
Families at the stand
The stand's core customer is a household within 30 minutes' drive who comes for a weekend of picking or buys a box for canning. Families with children are the heaviest U-pick users. Home canners and bakers buy by the case. Most buy three to six times a season.
Market shoppers
Saturday shoppers buy a few pounds at a time and want to taste first. They are the cheapest customers to win and the least loyal: the stall's job is to turn them into stand and pre-order buyers.
Wholesale buyers
An independent grocer or a restaurant group wants clean fruit in a uniform size, delivered on a fixed day. Wholesale is the lowest price per pound and the least labor per dollar, so it takes the fruit that is too large or too small for the stand.
What all three want
Ripe fruit with a flavor they remember, a clear price, and a way to know when the first peaches are ready.
From Tree to Till
Pricing
The blended price across all outlets is about $2.55 a pound in Year 1, rising 3% a year. The stand's U-pick price is lower than its picked price, and wholesale is lower than both. The Year 1 mix is set out below.
| Outlet | Year 1 revenue | Sales and average ticket |
|---|---|---|
| Farm stand and U-pick | $202,800 | About 4,830 sales at $42 |
| Farmers market stalls | $109,900 | About 3,925 sales at $28 |
| Wholesale | $79,300 | 8 accounts at about $9,900 for the season |
| Pre-order boxes, preserves and gift boxes | $46,000 | About 400 boxes at $58, 1,700 jars at $9.50, 140 gift boxes at $47.50 |
Volume and capacity
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Productive acres | 34 | 34 | 35 | 40 | 46 |
| Pounds sold | 172,000 | 188,000 | 198,000 | 219,000 | 240,000 |
| Pounds per productive acre | 5,060 | 5,530 | 5,660 | 5,480 | 5,220 |
Productive acres count the existing trees at full weight. The 16 new acres count at 20% in their third season, 50% in the fourth and about 90% in the fifth. The 2 oldest peach acres drop out from 2029. Pounds per acre stay under what a good commercial block can pick, because the plan prices in a lighter crop in an average year. Year 2 pounds rise 9% on Year 1, as the Wilsons learn the blocks, and Year 5 pounds per acre fall because the young trees are still reaching full yield.
How a season sells
Apricots and the first peaches open the stand in mid-June. July and August carry 64% of the year's revenue. Late peaches run into early October, and the boxes and preserves bring in $21,200 from September to December on pre-orders and the holiday gift list.
Getting People to the Stand
Marketing spend and what it buys
Year 1 marketing is $23,000: $9,000 of launch spending paid from start-up capital and $14,000 of running costs. That is 5.3% of Year 1 revenue; running spend falls to 2.8% of revenue by Year 5. About 3,600 households buy at least once in Year 1, so each one costs about $6.40 to win. Roughly 1,400 of them come from the seller's list of previous customers.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Website, road signs and opening weekend (launch) | $9,000 | A "peaches ready" page, directions and a pre-order form; two roadside signs on the nearest county roads |
| Email list | $2,500 | A weekly ripeness note from June, sent to the seller's list and sign-ups at the stand |
| Social posts and local press | $3,500 | Photos of bloom and picking days; the first-peach date given to local media |
| Market stall signs and sampling | $3,000 | Cut samples on Saturdays, the main source of new buyers |
| School, church and community group visits | $2,500 | Group U-pick bookings on weekday mornings |
| Wholesale samples and delivery runs | $2,500 | Cases of fruit to the first grocers and restaurants |
Milestones
- March 2027: pruning finished, the email list has about 1,000 contacts, the first group bookings are taken.
- Mid-June 2027: stand opens with apricots; the first market stall runs on the first Saturday.
- August 2027: peak month with $158,100 of sales and weekend U-pick limited by parking to 400 cars a day.
- December 2027: preserves and gift boxes sold, with 3,600 households on the email list.
A Season on the Farm
The year in the orchard
| Months | Work |
|---|---|
| January to March | Dormant pruning, brush removal, spray equipment service, planting prep |
| March to April | Bloom: frost watch, heaters and sensors on; dormant and bloom sprays |
| May to June | Hand thinning of peaches, the most labor-intensive job in the orchard; cover and fungicide sprays |
| June to September | Harvest in order of ripening, stand and market hours seven days a week |
| October to December | Last peaches, orchard cleanup, mulch and fertilizer, preserves and gift boxes |
Land, buildings and equipment
The lease covers a stand building, a 40 by 60 foot pack shed and an equipment shed. The company buys two used tractors, an air-blast sprayer and mower, a pack shed sizer, a 12 by 16 foot walk-in cooler, a refrigerated box truck and picking equipment, for $306,000 together with the stand fit-out, frost protection, irrigation and new trees. Equipment replacement is budgeted from Year 2 and reaches $9,000 in Year 4.
The new blocks
Sixteen acres are planted in spring 2027: 12 acres of later-ripening peaches, to stretch the season past the old blocks, and 4 acres of apricots. Trees cost, with stakes and planting, about $4,750 an acre. They bear a light crop in the third season and approach full yield in the fifth or sixth.
Frost plan
Orchard heaters, temperature sensors at four heights and a written call-out list cover each bloom night. The heaters protect against a mild freeze, not a hard one. The farm obtains a crop-insurance quote before bloom from an agent who writes fruit policies in Missouri. The $19,000 insurance line covers farm and product liability, U-pick visitors, property, the truck and a placeholder for a crop policy, whose cost and terms an agent has to confirm.
Software and records
Point-of-sale, an email platform, scheduling and accounting software cost $2,800 in Year 1. A spray log and a block-by-block harvest log feed the pounds-per-acre figures above.
Suppliers
Tree stock from a certified nursery, spray materials and fertilizer from a farm cooperative, packaging from two box suppliers, and a licensed co-packer for the preserves. None is hard to replace.
The Wilsons and the Crew
Jared Wilson, orchard manager
Jared spent thirty years as an agronomist for a seed and crop-protection company and holds a Missouri pesticide applicator license. He has grown peaches on a half-acre of his own for a decade. He has not run a commercial orchard, and the plan covers that with the retiring grower's advice through the first season.
Susan Wilson, stand and market manager
Susan ran clinic operations at a hospital group and manages the stand, the market stalls and wholesale accounts. She has no farm retail experience, so the seller walks her through the stand's busy-day routine before opening.
Pay and hours
Each owner draws a modest salary, $40,000 for Jared and $32,000 for Susan, because both have retirement income. Together they put in about 4,400 hours a year. Hired crews add about 5,450 hours in Year 1. Revenue per hour of labor is about $44, and payroll is 49% of revenue in Year 1, 44% in Year 2 and 40% by Year 5.
The retiring grower
The previous grower stays on through the first season to advise on spray timing and thinning, as part of the sale terms. He holds the $50,000 seller note, so he has a stake in the first harvest.
Outside help
A county extension horticulturist is consulted on the thinning and spray program each spring. A local accountant reviews the monthly figures through the first year.
If one owner is out
Jared and Susan are each the only person who knows part of the work. Key-person insurance is not in the budget, and no crew lead is hired. If either owner is out in season, the seller's advice and the hired crews keep picking going, but the stand or the spray program would suffer.
Stone Field Financials
The tables that follow come from one five-year model of the orchard: monthly through 2027, yearly after that. The farm figures are listed ahead of the results so each result traces back to an acre, a price per pound or a crew hour.
What the orchard costs to start
| Use of funds | Amount |
|---|---|
| Used orchard tractor and utility tractor | $46,000 |
| Air-blast sprayer, flail mower and herbicide boom | $34,000 |
| Harvest bins, ladders, picking buckets and trailers | $14,000 |
| Pack shed sizer and 12 by 16 foot walk-in cooler | $38,000 |
| Used refrigerated box truck | $24,000 |
| Farm stand fit-out: counters, point of sale, shade, signage, parking surface | $34,000 |
| Frost protection: orchard heaters and temperature sensors | $18,000 |
| Drip irrigation for the new blocks, and pump | $22,000 |
| Two new blocks: 16 acres of peach and apricot trees, stakes and planting | $76,000 |
| Business license, food-safety training, preserves labeling review | $2,500 |
| Legal: entity, orchard lease, U-pick waiver and signage | $6,500 |
| Launch: website, email list, road signs, opening weekend | $9,000 |
| Cash reserve for the months before the first fruit sells | $191,000 |
| Total uses | $515,000 |
| Source of funds | Amount |
|---|---|
| Jared and Susan Wilson, retirement savings | $270,000 |
| Bank equipment and operating loan | $195,000 |
| Seller note from the retiring grower | $50,000 |
| Total sources | $515,000 |
Jared and Susan put in $270,000 of retirement savings, 52% of the $515,000 total. The bank lends $195,000 over seven years at 8.75%, interest-only for the first twelve months, secured on the tractors, sprayer and truck with a personal guarantee. The retiring grower leaves $50,000 as a five-year note at 6%, also interest-only for a year. Both rates are planning figures, not quoted rates. Equipment, the stand and the new trees take $306,000, $18,000 is expensed at opening, and $191,000 is held back. That reserve pays for five months with no sales and leaves room for a light crop.
Orchard and market figures behind the forecast
- Land and trees: 56 leased acres at about $450 an acre plus a building charge, which makes the $31,200 rent line. 34 acres of existing trees (28 peach, 6 apricot) bear in every year. Two peach acres come out in 2029, and 16 acres of new trees are planted in spring 2027. Those count as 20%, 50% and about 90% of a productive acre in Years 3, 4 and 5, which gives 34, 34, 35, 40 and 46 productive acres.
- Volume and price: pounds sold are 172,000 in Year 1 and 240,000 in Year 5, or 5,060 to 5,660 pounds per productive acre. That is below what a good commercial block can pick, because the plan prices a lighter crop into an average year. The blended price is $2.55 a pound in Year 1 and rises 3% a year, so revenue per productive acre is about $12,900 in Year 1.
- Farm stand: about 4,830 sales at a $42 average in Year 1, including weekend pick-your-own. The farm stand and U-pick line is 46% of Year 1 revenue and 46% of Year 5. Direct costs are 12% of this line, for bags, baskets, card fees and bought-in preserves.
- Markets: about 3,925 sales at $28 in Year 1 across two stalls. Stall fees, bags and sampling are 9% of the line. Wholesale: 8 accounts at about $9,900 for the season, sold by the case at the lowest price per pound; cases and hauling are 10%. Accounts pay in 30 days, so receivables average 8 days across the farm.
- Boxes and preserves: about 400 pre-order boxes at $58, 1,700 jars of preserves at $9.50 from a licensed co-packer, and 140 gift boxes at $47.50. Co-packing, jars, labels and shipping cartons are 30% of this line.
- Labor: hired crews are paid $17.50 an hour ($36,400 on a 2,080-hour basis) only in the months they work. Payroll adds 30% for crews, covering payroll taxes, workers' compensation and paid leave, 27% for the owners and 15% for part-time hands. Hired hours are about 5,450 in Year 1 and the owners work about 4,400. Revenue per labor hour is about $44. Confirm the current Missouri minimum wage and farm overtime rules with the state labor department.
- Pay raises of 3% a year are charged as a separate line from Year 2. The second harvest crew (2 people, June to September) starts in month 42, as the new blocks begin to bear.
- Orchard inputs (spray materials, fertilizer, mulch and scouting) are $44,000 in Year 1, about $1,300 per planted acre of bearing trees, and rise to $58,000 by Year 5. Fuel, repairs and maintenance are $18,000 in Year 1.
- Insurance of $19,000 in Year 1 covers farm and product liability, visitors on the U-pick rows, property and the truck, plus a placeholder for a crop or whole-farm revenue policy. Availability and premiums vary by carrier and have to be quoted by an agent who writes fruit policies in Missouri.
- Working capital: receivables 8 days, supplier bills paid in 20 days, and packaging, preserves and stored stock at 1.5% of sales.
- Tax is charged at the federal corporate rate of 21% and Missouri's 4% corporate rate, with the Year 1 loss carried forward. A farm like this would usually be a pass-through entity, so these rates are a cautious placeholder and the actual tax would fall on the owners.
- No owner distributions are paid in the five years. Cash goes to the loans and the reserve.
Where the fruit is sold
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Farm stand and U-pick | $202,800 | $229,000 | $248,000 | $281,000 | $320,000 |
| Farmers market stalls | $109,900 | $124,000 | $135,000 | $154,000 | $174,000 |
| Wholesale: grocers, restaurants and a co-op | $79,300 | $90,000 | $96,000 | $110,000 | $125,000 |
| Pre-order boxes, preserves and gift boxes | $46,000 | $52,000 | $56,000 | $65,000 | $71,000 |
| Total revenue | $438,000 | $495,000 | $535,000 | $610,000 | $690,000 |
| Growth on prior year | – | 13% | 8% | 14% | 13% |
The stand and U-pick line holds 46% of Year 1 revenue and carries the highest price per pound. Market stalls are 25%, wholesale 18% and boxes and preserves 11%. Wholesale takes the fruit that is too small or too large for the stand, so it grows only as fast as the harvest. The pre-order line is the one that stretches the season into December.
Month by month in 2027
| Month | Farm stand and U-pick | Farmers market stalls | Wholesale: grocers, restaurants and a co-op | Pre-order boxes, preserves and gift boxes | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $0 | $0 | $0 | $0 | $0 | ($30,128) |
| Feb 2027 | $0 | $0 | $0 | $0 | $0 | ($30,128) |
| Mar 2027 | $0 | $0 | $0 | $0 | $0 | ($30,128) |
| Apr 2027 | $0 | $0 | $0 | $0 | $0 | ($30,128) |
| May 2027 | $0 | $0 | $0 | $0 | $0 | ($30,128) |
| Jun 2027 | $14,400 | $12,200 | $7,200 | $3,600 | $37,400 | $2,494 |
| Jul 2027 | $55,000 | $33,300 | $24,300 | $9,500 | $122,100 | $76,373 |
| Aug 2027 | $77,500 | $39,600 | $29,300 | $11,700 | $158,100 | $107,774 |
| Sep 2027 | $37,000 | $19,400 | $15,300 | $6,300 | $78,000 | $37,907 |
| Oct 2027 | $8,100 | $5,400 | $3,200 | $3,600 | $20,300 | ($12,421) |
| Nov 2027 | $4,500 | $0 | $0 | $3,600 | $8,100 | ($23,063) |
| Dec 2027 | $6,300 | $0 | $0 | $7,700 | $14,000 | ($17,916) |
There are no sales from January to May. Costs of about $30,000 a month still run through those months, because the model spreads payroll and operating costs evenly, so the winter and spring months show more cost than a seasonal crew would cost and the summer months less. EBITDA is positive in June, July, August and September and negative in the other eight months. The lowest month-end cash balance is Jun, at about $23,000 after allowing for the 8 days customers take to pay. A hard freeze would show up there, as a June with no sales to refill it.
Who works the rows
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Jared Wilson, orchard manager | $40,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Susan Wilson, stand and market manager | $32,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Pruning and thinning crew (2 full time, January to March and May to June) | $36,400 | Month 1 | – | – | – | – | – |
| Harvest and stand crew (4 full time, June to September) | $36,400 | Month 6 | – | – | – | – | – |
| Market and packing hands (2 part time, June to October) | $20,000 | Month 6 | – | – | – | – | – |
| Second harvest crew (2 full time, June to September) | $36,400 | Month 42 | – | – | – | – | – |
| Total payroll incl. on-costs | $213,133 | $213,133 | $213,133 | $244,680 | $244,680 |
Jared and Susan are on payroll from month 1. A two-person pruning and thinning crew works January to March and May to June of every year. Four harvest and stand workers join each June to September from month 6, and two part-time market and packing hands work June to October. A second harvest crew of two starts in month 42, June 2030. Seasonal roles are off payroll in December, so the year-end columns show only the owners. The 4-person and 2-person crews are shown at an annual-equivalent rate and paid for the months worked.
Earnings by year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $438,000 | $495,000 | $535,000 | $610,000 | $690,000 |
| Direct costs (packaging, card fees, stall fees, co-packing, boxes) | ($55,957) | ($63,239) | ($68,349) | ($77,931) | ($88,151) |
| Gross profit | $382,043 | $431,761 | $466,651 | $532,069 | $601,849 |
| Payroll incl. on-costs | ($213,133) | ($213,133) | ($213,133) | ($244,680) | ($244,680) |
| Rent | ($31,200) | ($32,100) | ($33,100) | ($34,100) | ($35,100) |
| Utilities | ($8,400) | ($8,700) | ($9,000) | ($9,400) | ($9,800) |
| Marketing | ($14,000) | ($15,500) | ($16,500) | ($18,000) | ($19,500) |
| Insurance | ($19,000) | ($20,500) | ($22,000) | ($23,500) | ($25,000) |
| Professional fees | ($6,000) | ($6,000) | ($6,500) | ($6,500) | ($7,000) |
| Software subscriptions | ($2,800) | ($3,000) | ($3,200) | ($3,400) | ($3,600) |
| Orchard inputs: spray program, fertilizer, mulch and scouting | ($44,000) | ($43,000) | ($47,000) | ($52,000) | ($58,000) |
| Fuel, repairs and maintenance | ($18,000) | ($19,000) | ($20,000) | ($21,500) | ($23,000) |
| Food-safety audits, water testing and permits | ($3,500) | ($3,600) | ($3,800) | ($4,000) | ($4,200) |
| Tree replacements and gap planting | $0 | ($2,000) | ($6,000) | ($8,000) | ($8,000) |
| Equipment replacement | $0 | ($4,000) | ($6,000) | ($9,000) | ($7,000) |
| Bad debt allowance | ($1,500) | ($1,600) | ($1,800) | ($2,000) | ($2,200) |
| Annual pay raises (3% a year) | $0 | ($6,394) | ($12,980) | ($22,688) | ($30,709) |
| EBITDA | $20,510 | $53,234 | $65,637 | $73,301 | $124,060 |
| Depreciation | ($26,833) | ($26,833) | ($26,833) | ($26,833) | ($26,833) |
| Interest | ($20,062) | ($18,732) | ($15,674) | ($12,359) | ($8,763) |
| Income tax | $0 | $0 | ($1,066) | ($8,241) | ($21,373) |
| Net income before start-up costs | ($26,386) | $7,668 | $22,064 | $25,868 | $67,091 |
| Start-up costs expensed at opening (legal, licenses, launch marketing) | ($18,000) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($44,386) | $7,668 | $22,064 | $25,868 | $67,091 |
Year 1 loses $26,386 before start-up costs and $44,386 after them: the farm pays a full year of fixed costs for four months of sales. Year 2 is the first profit, $7,668 or 1.5% of revenue, because the new trees are planted and the crews are the same size. Year 3 earns $22,064, Year 4 $25,868 after the second harvest crew is added, and Year 5 $67,091 on an 18.0% EBITDA margin. Income tax is nil in Year 2 and small in Year 3 because the Year 1 loss carries forward.
Cash through frost and harvest
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($30,657) | $32,796 | $47,701 | $50,458 | $91,531 |
| Equipment, stand fit-out and new trees | ($306,000) | $0 | $0 | $0 | $0 |
| Funding received | $515,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | ($37,249) | ($40,307) | ($43,622) | ($47,218) |
| Owner distributions | $0 | $0 | $0 | $0 | $0 |
| Net change in cash | $178,343 | ($4,453) | $7,394 | $6,835 | $44,312 |
| Closing cash | $178,343 | $173,891 | $181,284 | $188,120 | $232,432 |
Closing cash stays above $170,000 at every year end. The year-end figures cannot show the spring low, because Years 2 to 5 are spread evenly across the months. The low point in any year is the end of May. The model does not run a no-crop year: fixed costs of roughly $300,000 a year against $178,000 of Year 1 closing cash mean a total loss would need insurance, a bridge loan or family money, and the quote for a crop policy is the first thing the farm gets.
Year-end position
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $178,343 | $173,891 | $181,284 | $188,120 | $232,432 |
| Accounts receivable | $9,600 | $10,849 | $11,726 | $13,370 | $15,123 |
| Packaging, preserves and stored stock | $6,570 | $7,425 | $8,025 | $9,150 | $10,350 |
| Equipment, stand fit-out and new trees (net) | $279,167 | $252,333 | $225,500 | $198,667 | $171,833 |
| Total assets | $473,680 | $444,498 | $426,535 | $409,306 | $429,739 |
| Accounts payable (packaging, co-packer, supplies) | $3,066 | $3,465 | $3,745 | $4,270 | $4,830 |
| Bank loan | $245,000 | $207,751 | $167,444 | $123,822 | $76,604 |
| Paid-in capital | $270,000 | $270,000 | $270,000 | $270,000 | $270,000 |
| Retained earnings | ($44,386) | ($36,718) | ($14,654) | $11,214 | $78,305 |
| Total liabilities and equity | $473,680 | $444,498 | $426,535 | $409,306 | $429,739 |
Break-even and revenue per labor hour
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | 4.7% | 10.8% | 12.3% | 12.0% | 18.0% |
| Net margin (before start-up costs) | -6.0% | 1.5% | 4.1% | 4.2% | 9.7% |
| Payroll incl. pay raises as share of revenue | 49% | 44% | 42% | 44% | 40% |
| Revenue per full-time equivalent at year end | $219,000 | $247,500 | $267,500 | $305,000 | $345,000 |
| Average monthly revenue | $36,500 | $41,250 | $44,583 | $50,833 | $57,500 |
| Monthly revenue needed to cover operating costs | $34,541 | $36,164 | $38,312 | $43,830 | $45,647 |
| Debt service cover (EBITDA / interest + principal) | 1.0x | 1.0x | 1.2x | 1.3x | 2.2x |
Year 1 averages $36,500 of revenue a month against $34,541 needed to cover operating costs, yet it still loses money because depreciation and interest come on top. Year 2 averages $41,250 against $36,164 needed. Debt service cover is about 1.0x in Years 1 and 2, 1.2x in Year 3, 1.3x in Year 4 and 2.2x in Year 5. Cover that thin in the first two years is the main reason the bank loan is interest-only for twelve months and the reserve is large.
A short crop: 20% less revenue
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $350,400 | $396,000 | $428,000 | $488,000 | $552,000 |
| Net income before start-up costs | ($60,958) | ($35,562) | ($25,461) | $8,737 | $52,114 |
| Net income after start-up costs | ($78,958) | ($35,562) | ($25,461) | $8,737 | $52,114 |
| Closing cash | $146,392 | $99,050 | $59,158 | $49,311 | $79,125 |
This case cuts every revenue line by 20% in every year. The response: the harvest crew is cut from four to three and the part-time hands from two to one, spray and fertilizer spending falls 8%, the second harvest crew is never hired, marketing is cut 20%, Jared takes a 20% pay cut, and no distributions are paid. On those terms the orchard ends every year with cash in the bank, never below $49,311, but loses money until Year 4. Equity ends Year 1 at $191,042, and the bank would be told before the first covenant date. Without the response, the same shortfall would drain the reserve much faster. A short crop is milder than a freeze year, which is why insurance matters.
Sources
- Missouri Department of Revenue, Corporation income tax: 4% for tax years 2020 and later. Rates change by statute, so confirm before filing.
- Internal Revenue Code section 11: the 21% federal corporate rate used in the model.
- University of Missouri Integrated Pest Management, Low temperatures injure peach floral buds (January 2014).
- MU Extension, Missouri Frost/Freeze Probabilities Guide.
- USDA Farm Service Agency, Tree Assistance Program fact sheet. Eligibility and payment rates have changed in recent years, so the county FSA office confirms current terms.
- Orchard yields, labor hours, prices and the lease rate are the plan's own figures; no published survey was used for them.
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