Making a seasonal business profitable year-round

Making a seasonal business profitable year-round

While cash flow can be an issue for any business, the challenge is often much greater for seasonal operators. Dural Christmas Tree Farm owner Leo Demasi reveals how his business has survived this challenge for 16 years and counting.

Working on a Christmas tree farm sounds like it must be the merriest job on Earth. Sydney’s Dural Christmas Tree Farm, however, proves that merriment cannot be grown overnight, with its product taking years of work before it can be sold.

My Business speaks with Leo about his approach to managing business seasonality to ensure the Christmas cheer can be shared with his family and employees as much as with his customers.

My Business: Can you give us an overview of Dural Christmas Tree Farm?

Leo Demasi, Dural Christmas Tree FarmLeo Demasi: We have a farm out here at Dural [in Sydney’s north-west] and we grow the Christmas trees. And then from that process … it's a retail farm, where the customers come out and choose their tree. They can take it home or, if they'd like, we get it delivered for them, and also we have another farm up the road … [where] we lease the land to grow more Christmas trees. So basically, we're just providing Sydney with fresh Christmas trees.

MB: Why did you decide to go into Christmas tree farming?

LD: Before the farm became a Christmas tree farm, it was a flower farm. It was my parents' farm. My father passed away and the land wasn't being used, and since the land was not being used, Mum had to pay extra rates and land taxes because of not being prime for production. A family friend suggested to put Christmas trees in, so Mum didn't have to pay the higher rates and the land taxes, [and] that's how it started.

MB: What does an average year look like for Dural Christmas Tree Farm?

LD: It's hard. We get most of our yearly income, obviously, from Christmas, but when it comes later towards August, September, that's when we start using the overdrafts until November, until the money starts coming in again. So, the help of the bank.

It's pretty quiet from January to June. Then July will have a bit of a peak [with] Christmas in July. This year was a good year. Every year for Christmas in July, you just can't pick it. It might be a good year, it might be a quiet year. It all depends on how the public or businesses want to advertise and market their businesses at Christmas in July, and as a gathering for restaurants.

And then comes August: we have a little bit of a spike again where we get a lot of television commercials and photo shoots buying trees, where they're actually getting ready for their marketing of their Christmas and their businesses, like the magazines or Woolies or Coles; they start doing all their marketing and filming [in late October] for the Christmas season. 

Because we're a seasonal business, it's hard to maintain the good staff yearly. You have to get new staff every season, train them up, and by the time they've trained up and they've really got it and everything's working well, the season's normally over.

MB: Out of curiosity, what makes a good Christmas tree?

Dural Christmas Tree FarmLD: A perfectly shaped [Christmas tree] is basically Australia's trend towards America, where they want that perfect conical shape all the way around and denseness. The procedure to get them perfectly shaped is actually pruning them. The best way to get that shape is prune them with a hand machete. It's a knife, it's about 16 inches long, and just gives it a clean cut. They need to be trimmed at least three to four times a year to get that denseness in the tree.

MB: What do you do with less desirable or flawed stock?

LD: With our trees, they're in the ground for three to four years, and that extra year in the ground actually helps the tree grow more dense, so that eliminates imperfections.

When [the trees] are at an age of two years old, if I can see it's not doing well, I'll just take it out of the paddock, because it's no use wasting my time trying to get that tree right, and also it's taking all the nutrients out of the ground where the other good trees could be using those nutrients.

MB: What strategies do you use to protect your stock?

LD: In the last few years we've had a lot of soil erosion problems, so we actually mulch now in between the trees. It helps with the growth … because it's constantly providing moisture when it dries out. Also, I don't have to spray for the weeds. When we do the [new] plantations, I'm putting tree bag protectors around them … that protects them from the wind and a bit of the adverse conditions.

Another one is irrigation ... because sometimes if it's dry, it helps the plants to establish, especially the seedlings.

MB: You also run The Christmas Tree Company. What’s that business about, and how does it differ to Dural Christmas Tree Farm?

LD: It was an opportunity that came up. We … import our own trees, and we actually wholesale them off to the Christmas shops. We do a little bit of retail, but it's mainly just wholesale off to the Christmas shops, and now we just started another business [with] my wife that we actually do the installations of the Christmas themes into people's homes, RSL clubs, shopping centres, offices anywhere in Sydney.

That's how that came about, and not everyone likes a real tree, so we thought, 'Well, there's one market there that we can target as well', because we've already got the infrastructure in place, we've already got the staff here at Christmas, and it just provides extra work as well for them, because sometimes it could be a lull period, and we're just utilising the best of our time here at Christmas.

Fast facts:

Santa Claus, Dural Christmas Tree FarmName: Dural Christmas Tree Farm

Industry: Agriculture, retail

Location: Sydney, NSW

Established: 2000, trading since 2003

Client base: Greater metropolitan Sydney

Employees: One to two from January to the end of September, up to 30 during the peak season.

 

 

Making a seasonal business profitable year-round
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