Christmas TREEts

in

Indiana, Pennsylvania

Arandia, Marcus Joshua C.

3rd Term - A.Y. ‘20-’21

EXSERVS OTE002 16:20 - 17:50

 TABLE OF CONTENTS

1.0 Executive Summary……….………………………………………………………….....1

1.1 Objective………………………....……………………………………………………...1

1.2 Mission………………………………....………………………………………....……..1

1.3 Key to Success…………………………...……………………………………………1-2

2.0 Company Summary……………………………………………………………………2

3.0 Products and Services…………………………………………………………………3

4.0 Market Analysis Summary…………………………………………………………………6

5.0 Strategy and Implementation Summary…………………….……………………………9

6.0: Management Summary…………………………………………….……………………11

7.0: Financial Plan……………………..………………………………………………..……14

8.0 Bibliography……………………..…………………………………………………………20
1.0 Executive Summary

Christmas TREEts is a Christmas tree Company that focuses on reaching our clients'

ideal Christmas tree that they wish to have and decorate. The company is making

Christmas trees, that are needed when it reaches Decembers so they can display in

somewhere that can be seen. The company will also make sure to produce enough

products specially during December.

The company plans to export its service in the country of United States,

specifically in New York. Christmas tree sales is a decorated tree that can be displayed

in any place, it is just how people celebrate Christmas to show that they support that

holiday.

1.1 Objective (measurable steps)

Christmas tree aims to remind everyone that it is Jesus’ birthday, and it also is a

way of showing that we celebrate Christmas. We can do this by giving our clients the

best decorated and budget friendly Christmas tree that they will ever buy.

1.2 Mission

Our Mission is to offer Christmas tree to the clients who plan to celebrate Christmas.

We will focus:

 Creating a Christmas tree that the customer wants

 To reach their expectations about the product

  To answer each of their questions on how to set-up the Christmas tree

1.3 Key to Success

 Creating a marketing plan that follows the rules and regulation in United

States.

 Building a group of people who are hardworking and is good in making a

Christmas tree.

 Communication with the workers that I put up and communicating with our

clients.

2. Company summary

Christmas TREEts is a Christmas tree making company that is handled by a

single proprietor established in 2021. It is located in Indiana, Pennsylvania, the

Christmas tree capital of the world. It is where the production of the Christmas trees is

abundant which makes the business operation smooth. We aim to stick with our mission

of making quality Christmas trees that would give satisfaction to our customers in the

nearby cities to make their holiday celebration extra special. The company aims to

target customers all around the world, especially from New York City where holidays are

celebrated extravagantly. In this way, their holidays will be filled with a decoration

pleasing to the eye. What set Christmas TREEts apart in the marketplace is its ability to

design Christmas trees that is uniquely designed per orders to show the individuality of

the families or individuals who will make use of our product. We will first focus on

reaching our target market and making our main branch known before expanding to

other locations and make it easier and closer to home.

Chapter 3.0 : Product and Services

Christmas TREEts is a production and service company that provides:

 Production of Christmas trees as their main line of business – This is to be done

by the company wherein they plant different kind of Christmas trees, (e.g. Fraser
Fir, Canaan Fir, Douglas Fir, Grand Fir, and more), grow and take care of it for it
to be utilized in the future services. The price of the Christmas Tree itself depend
on what tree they choose to buy.
 Offers services like decorating Christmas Trees based on the customized
request of their customers – Options will be given to the customer regarding the
designs of their Christmas Tree. If they choose the option that the company will
do the design based on their customized request, we will then prepare the
Christmas Tree as the base and put on the Christmas Tree decorations based on
their specific request. The price will vary depending on the Christmas Tree that
they have chosen plus the customization service that will cost around $4-6 and
the additional charges based on the Christmas Tree decorations that they will
choose.
 Offers services like readying the designs that their customers requested so that
they can personally decorate their Christmas trees – In this other option that we
are offering besides the Christmas Tree that they have ordered, we offer
Christmas Tree decorations that they can choose from but we will not put it with
tree yet but instead include the decorations with the delivery so that they could
decorate the Christmas tree themselves. The price of this offer also depends on
the tree that they chose and the chosen decorations that they want.
 Offers Christmas Tree Decorations – They can choose between the Christmas
Tree decorations that we have that would help them decorate the Christmas
trees that they already have.
  Delivers their Christmas Trees right in their doorstep – We will personally deliver
the Christmas Trees to our clients. Flat rate would be $10 and additional charges
would depend on the farness of the location.

Price Comparison

Christmas TREEts’ pricing strategy will solely be based on the service rendered by our
company. The base price will depend on the Christmas Tree ordered and additional
prices and fees will depend on the customization of their Christmas trees or the
Christmas tree decorations that they ordered.

Products and Services Price Table

Christmas Trees Measurement Price (additional $5 every .

5 of its size)
Fraser Fir 7 ft $70
Balsam Fir 7 ft $70
Canaan Fir 7 ft $70
Douglas Fir 7 ft $70
Concolor Fir 7 ft $70
White Pine 5 ft $110

Christmas Tree Quantity Price

Decorations

300-Light Clear $9
Incandescent Light Set
Northlight 100ct LED Mini $17
Christmas Lights
50ft. 200 Light Mini Globe $30
LED String Light
7ct Retro Christmas $28
Bubble String Lights Green
Wire
 Garland $25
Christmas Balls (Available 100 pcs $17
in many colors)
Christmas Wreath with $6
Bow (Medium Sized)
Christmas Wreath with $10
Bow (Large)
Christmas Tree Skirt $7

Expectations

The company expects that we can fully utilize our produced trees and stocked
Christmas Tree Decorations that would produce profit in the side of our company and
satisfaction and happiness in the side of our clients. We also expect a low purchase in
the months of January to August and high purchases in the months of September to
December, the months that we call the BER months wherein individuals and families
are busy in decorating their houses for the upcoming holidays.

Risk

The company are aware of the different risks of this kind of service and these
are:

 It might take for our company to make it to the market and gain attention since
the use of Christmas Trees are only used seasonally.
 Economic Downturn
 Long-time of maturity of the trees

Chapter 4.0: Market Analysis Summary

Market Segmentation

Millennials now-a-days have started their families and have their own purchasing
powers they have helped to gain back around the real Christmas trees against
 artificial ones. Doug Hundley said in an article in morningconsult.com entitled
“Real or Artificial, Christmas Trees Likely to Draw More Demand from
Homebound Consumers” that Convenience has dominated consumer
motivations for several decades, but millennials, and probably the younger
generation, are more interested in new things and turning their backs on plastics.
Millennials are now a vital demographic to the Christmas tree market.

Target Market Segment

Figure 1. Artificial Trees vs Real Ones

According to the poll conducted by Morning Consult in among 2,200 U.S. Adults,
the Gen Z, Millennials and the Gen X are said to buy real Christmas trees. In that
case, the company’s target market will be them and would still encourage the
Baby Boomers to purchase the real ones instead of the artificial ones.

Strategy
In order to achieve the objectives, mission, and expectations of the company here are
the strategies that we will do:

 Conduct researches on the current trend in the Christmas tree market.

 Make sure that we are going to provide quality Christmas trees to satisfy the
wants of our clients.
 Decorate their Christmas trees based on their customized palettes so that the
Christmas Trees would come out as what they want it to be.
 Gather high quality materials to produce high quality Christmas trees with high
quality decorations.
 Communicating well with the clients to avoid misunderstanding in their orders.
 Market our products in an ecofriendly way
 Focus on our target market yet encourage others to gain additional clients.

Service Business Analysis

Christmas TREEts is a production and service company that provides services such as
production of Christmas trees as their main line of business, offers services like
decorating Christmas Trees based on the customized request of their customers, offers
services like readying the designs that their customers requested so that they can
personally decorate their Christmas trees, offers Christmas Tree Decorations, and
Delivers their Christmas Trees right in their doorstep to help their clients make their
holiday celebrations more special. The company will begin their services in towns and
cities close to them and is planning to expand later on to reach as many individuals and
families.

Competition and Buying Patterns

The artificial Christmas Tree industry is the company’s greatest competitor in the
market. This industry uses feathers, aluminum, plastic, and other materials as substitute
to real Christmas trees grown in farms. According to Reuters Graphics, artificial
Christmas tree sales have increased in the recent years in which China is the leading
source of it being shipped to the United States.

As for the buying patterns, the company will depend on the forecasted number of orders
from the customers to order only the sufficient number of materials to maximize the
inventory of our company.

Chapter 5.0: Strategy and Implementation Summary

Competitive Edge

Christmas TREETs’ competitive edge is we offer a wide range of services to offer. From
the production of the base which is the Christmas Tree itself, we also offer decorating it
based on the customized request of our clients. Along with that is our ability to supply
good quality decorations to help our customers build their desired Christmas Trees. We
claim this as our competitive edge because offering all of these services would make
our clients’ preparation for the upcoming holiday celebrations easier and closer to their
hearts.

Marketing Strategy

Since our products are famous on the most treasured holiday of every year, which is
Christmas our target customers are known to spend more for its preparation. Here are
some of the marketing strategies that we will use to grab their attention:

 We will increase their average cart spend by taking our most famous service and
bundle it along with the product that is not given much attention to and put a
discount on the total price.
 We will also start working with charities in the second year of our operations in
doing the social good and giving back to the community for the spirit of
Christmas.
 Offer free delivery coupons for every order made every Sunday of the BER
months (September-December) to commemorate the reason why we are
spending Christmas, the birth of our savior Jesus Christ.
 Offer 5% discount on their next order when they put the pictures of their
Christmas Trees on their social medias and tag or mention the company’s social
media accounts to promote the company’s products to their loved ones and
`acquaintances.

Sales Forecast

Year Forecasted Revenue

2021 $100,000.00
2022 $200,000.00
2023 $300,000.00
2024 $400,000.00
2025 $500,000.00
Milestones

 Christmas TREEts was successfully established in the first quarter of 2021.

 Established a name in the social media world that is helping them reach their
target market.
 Started talking to charities for a possible collaboration in the second year of our
business operation.

Chapter 6.0: Management Summary

Personnel Plan

List of Administration Personnel

Position No. of Personnel

General Manager 1
Administration Manager 1
Marketing Manager 1
Operation Manager(s) 3
 Tree Production Workers 8
 General Workers 10
 Delivery Personnel 4
Financial Manager 1

Schedule of Task and Responsibilities

Position Task and Responsibilities

General Manager 1. Ensures that the company’s
objective and mission is being
achieved.
2. Motives employees for a better
production and operation.
3. Looks forward to the future for
possible changes in opportunities.
4. Oversees the overall operations of
the organization.
5. Analyze monthly report of every
department.
Administration Manager 1. Updating and maintaining the
database with the accurate client
information.
2. Controlling and overseeing the
financial expenses of the
administration department.
3. Identify and inform the duties of
 every department.
4. Manage the salary payment,
bonuses, and incentives of the
staff.
Marketing Manager 1. Set the marketing strategy plan of
the company.
2. Identify new marketing
opportunities.
3. Promote the products and services
of the business to possible
customers.
4. Analyze the SWOT (Strengths,
Weaknesses, Opportunities, and
Threat) of the company.
Operation Manager(s) 1. Responsible for managing the
quality of the products and ensure
that the problems are handled
efficiently.
2. To set rules and procedures that
the staff are to follow in order to
make the productions and
operations run smoothly.
3. Determine and manage the
operation cost that are fit to the
budget of the company.
 Tree Production Workers Responsible for the planting and taking
care of the trees. They are to provide
supervision and monitor the growth and
maintenance of trees.
 General Workers Responsible for working on the services
that the company offers.
 Delivery Personnel Responsible for delivering the products to
the footsteps of the customers.
Financial Manager 1. Responsible for managing and
controlling the overall budget,
expenses, and profits of the
company.
2. To prepare the monthly and annual
financial statements.

Chapter 7.0: Financial Plan

Important Assumptions

In order to maintain the profitability and sustainability of the business,

assumptions of the company take in to consideration the seasonal demand of the
product. Adjustment in costs and expenses are done during low season to avoid losses
and increase in productions are considered during peak season. In hopes of recovery of
the global economy from the pandemic, an assumption of decreasing inflation rate is
presented. Depreciation increases as the company grows toward time yet with minimal
impact since production equipment are of high quality.

Assumption 2021 – 1st Half 2021 – 2nd Half 2022 – 1st Half 2022 – 2nd Half
Sales Volume 10% 30% 12% 40%

Production Cost 5% 15% 6% 20%

Salary Expenses 5% 10% 6% 12%

Inflation 4.5% 6% 3% 5%
Depreciation 0.1% 0.3% 0.5% 0.7%

Break-even Analysis

Fixed Costs - Monthly Amount Quantity Total

Salaries Expense:
General Manager $15,000 1 $15,000
Department Managers $10,000 7 $70,000
Operational Workers $800 22 $17,600
Taxes $600 1 $600
Depreciation $1 10 $10
Total Fixed Costs $103,210

Variable Costs- Amount Quantity Total

Monthly
Production Supplies $259 20 Trees $5,180
Utilities Expense $1,000 3 $3,000
Total Variable Costs $8,180

- Projected Sales per Month = 500 Trees

- Estimated Selling Price = $299

- Sales Revenue (Sales x Price) = 149,500

Break – Even Analysis = Fixed Costs / (1-Variable Costs as % of Sales)

BE = $103,210 / (1-0.05)
Break – Even = $106,642.11
 Projected Profit and Loss

For the Year Ended December 31,

2021 2022 2023 2024 2025

Sales Revenue 2,170,000 2,669,100 4,003,650 5,404,928 6,810,209

Cost of Goods Sold 667,890 821,505 1,232,258 1,663,548 2,096,070

Gross Profit 1,502,110 1,847,595 2,771,393 3,741,380 4,714,139

Advertising and Promotion 5,000 6,150 9,225 12,454 15,692

Office Supplies 8,000 9,840 14,760 19,926 25,107

Salaries 1,231,200 1,514,376 2,271,564 3,066,611 3,863,930

Depreciation 120 147 221 299 377

Utilities 75,000 92,250 138,375 186,806 235,376

Total Expenses 1,319,320 1,622,764 2,434,145 3,286,096 4,140,481

Income before Taxes 182,790 224,831 337,247 455,284 573,657

Taxes 20,000 24,600 36,900 49,815 62,767

Profit/Loss 162,790 200,231 300,347 405,469 510,890

Projected Cash Flow

 For the Year Ended December 31,
2021 2022 2023 2024 2025

Beginning Cash Balance 700,000 1,483,000 2,500,874 4,022,685 6,114,381

Sources of Cash

Cash Sales 2,170,000 2,669,100 4,003,650 5,404,928 6,810,209

Uses of Cash

Salaries 1,231,200 1,514,376 2,271,564 3,066,611 3,863,930

Taxes 20,000 24,600 36,900 49,815 62,767

Inventory 60,000 20,000 35,000 10,000 40,000

Utilities 75,000 92,250 138,375 186,806 235,376

Total Uses Of Cash

1,386,200 1,651,226 2,481,839 3,313,232 4,202,073

Ending Cash Balance 1,483,800 2,500,874 4,022,685 6,114,381 8,722,517

200,000 200,000 200,000

Minimum Cash Balance 200,000 200,000

Cash Surplus/Deficit 1,283,800 2,300,874 3,822,685 5,914,381 8,522,517

Projected Balance Sheet

For the Year Ended December 31,

 2021 2022 2023 2024 2025

Assets
Current Assets

Cash 90,082 124,355 130,865 132,976 134,777

Inventory 60,000 20,000 35,000 10,000 40,000
Long-Term Assets
Machineries 100,000 110,000 133,087 154,861 189,082

Equipment 30,000 24,600 36,900 49,815 62,767

Total Assets 280,082 278,955 335,852 347,652 426,626
Liabilities
Current Liabilities
Accounts Payable 49,086 76,977 77,001 78,091 89,121

Total Liabilities 49,086 76,977 77,001 78,091 89,121

Owner’s Equity

Capital 150,000 140,775 178,768 183,975 199,826

Retained Earnings 30,000 113,580 120,184 113,862 164,033

Total Owner’s Equity 260,082 254,355 298,952 297,837 363,859

         
Total Liabilities & Owner’s
280,082 278,955 335,852 347,652 426,626
Equity

Business Ratios

2021 2022 2023 2024 2025

Current 3.06 1.88 2.15 1.83 1.96
Ratio
Acid Test
0.61 1.36 1.24 1.57 1.06
Ratio
Cash Ratio 4.50 5.06 3.55 2.67 2.15
Gross
1.44 1.44 1.44 1.44 1.44
Margin Ratio
Operating
11.87 11.87 11.87 11.87 11.87
Margin Ratio
Return on
0.63 0.79 1.00 1.36 1.40
Equity Ratio
Asset
7.75 9.57 11.92 15.55 15.96
Turnover
Inventory
11.13 41.08 35.21 166.35 52.40
Turnover

Bibliography

16 Types Of Christmas Trees (ProFlowers, 2017 November 14) Retrieved from

https://www.proflowers.com/blog/16-types-of-christmas-trees
23 Christmas Marketing Ideas to Boost your Sales This Year (Forbes, P., n.d.)
Retrieved from https://packhelp.com/christmas-marketing-ideas/

Guide to Successful Retailing of Christmas Tres From Your Business’ Present Location
(CTFO Christmas Tree Farmers of Ontario, 2021) Retrieved from
https://www.christmastrees.on.ca/index.php?action=display&cat=4&v=6

The Economics and Supply Chain of Your Christmas Tree (Barner, K., 2017 December
18) Retrieved from https://www.allthingssupplychain.com/the-economics-and-supply-
chain-of-your-christmas-tree/

The Economics of Christmas Trees (Crockett, Z., 2020 December 5) Retrieved from
https://thehustle.co/the-economics-of-christmas-trees