How to Start an Orchard

Start an orchard by following these 10 steps:

1. Plan your Orchard
2. Form your Orchard into a Legal Entity
3. Register your Orchard for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Orchard
6. Get the Necessary Permits & Licenses for your Orchard
7. Get Orchard Insurance
8. Define your Orchard Brand
9. Create your Orchard Website
10. Set up your Business Phone System

We have put together this simple guide to starting your orchard. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Orchard Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening an orchard?

If you are starting from scratch, remember to include five years of living expenses to your start-up projections. Expect to pay $10 to $20 per tree and be planting 100-400 trees per acre depending on the size of the tree. You'll need to spend about $5 per tree per year on pesticides, pruning, and fertilizer. Of course, you'll need to purchase the land in the first place. A small orchard that caters to the farm stand crowd will only need five to ten acres at minimum, but if you're going to make a decent profit, you'll want to consider 50 to 100 acres for planting purposes.

What are the ongoing expenses for an orchard?

Your expenses will be focused on paying for fertilizer, pest control, and harvesting. You will need to replace some of your trees on a regular basis to maintain the health and vitality of the entire orchard. Payroll during the harvest season will also make a large dent in the checking account.

Who is the target market?

A food distributor for a large supermarket chain will be willing to buy your entire harvest for one price, which guarantees the sale. However, individual customers who pay to pick-your-own from the trees will pay a premium price per pound for the opportunity to explore the rural life for an afternoon. A farm stand can generate income throughout the growing season from your local neighbors.

How does an orchard make money?

Very slowly. Fruit trees require patience and planning before any profit can be generated. Plan to wait at least two years for dwarf variety fruit trees to start bearing fruit and allow up to seven years for larger varieties to mature. You earn a profit by spending as little as possible on the maintenance of your trees and landing a high price when they're ready to sell.

How much can you charge customers?

Retail pricing for fruits vary over time and in different markets. Typical apple pricing runs from ten cents a pound when selling direct to a distributor and up to two dollars per pound when selling retail direct to a single market customer. However, if you hope to sell the entire harvest at your farm stand, expect to see a significant percentage fail to move. In the right climate, olives can generate impressive income when used for their valuable oil.

How much profit can an orchard make?

Expect not to clear a profit for the first three fruit-bearing years as the orchard pays for the trees and maintenance. After that, you will still be making payments on harvesting equipment. As a sideline, a healthy small orchard of five to ten acres can generate $10,000 a year, but expenses must be deducted before you see profit. The profit margin increases for industrial sized orchards where the cost of machinery is shared over more trees.

How can you make your business more profitable?

Diversification can help you increase profit at an orchard. Plant multiple types of fruits and consider in investing in a cider press or jam kitchen to be able to offer multiple products at your farm stand.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your orchard is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate an orchard business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Certificate of Occupancy

An orchard is run out of a large outdoor space. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.  

• If you plan to lease a location:
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to an orchard.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued. 

• If you plan to purchase or build a location:
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your orchard will be in compliance and able to obtain a CO.

Food Regulations

There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

If you have a love of the earth and a love for growing things, you've got the first requirement. You must also be willing to work extensive hours during the growing season and have patience for years when the crops struggle to thrive. A small orchard should only be considered as a sideline business.

What happens during a typical day at an orchard?

If you own and operate an orchard, you may be expected to:

• Determine which trees are optimal for planting in your region and what products are in high demand
• Plant new trees in the spring
• Prune, spray, and fertilize trees according to schedule
• Be able to determine when the crop is ripe and harvest in a timely manner, reducing loss
• Check trees on a regular basis for disease or infestation
• Seek best prices for your crop among distributors
• Maintain a farm stand during the growing season
• Plan harvest entertainment options for pick-your-own activities
• Apply for any grants or assistance available to farms or orchards in your region

What are some skills and experiences that will help you build a successful orchard?

The successful orchard grower and owner will have a solid background in:

• Soil science
• Agricultural studies
• Biology
• Chemistry
• Understanding of current fruit markets, demand, and pricing
• Basic business knowledge
• Time management skills
• Food handling safety standards
• Proper harvesting techniques

What is the growth potential for an orchard?

Most orchard businesses only consist of a single orchard. You are better off planning ahead when planting a vast orchard, as every hill and valley will affect how well any particular tree will grow. Your property will largely define how high a yield you can expect. Knowledge in tree husbandry, soil biology, and even weather can help you find the right place to plant your orchard and choose the right fruit to earn the highest yield possible.