The lavender oil market is on the rise, projected to grow at a CAGR of 6.8% from 2024 to 2034. As the global floriculture market continues expanding rapidly more opportunities appear to farm lavender plants. Whether you’re marketing fresh or dried lavender, it’s a great time to get started.

Source

Starting a lavender farm may sound idyllic. Yet transforming those purple rows into profit requires research, planning, and passion.

This guide will walk you through how to start a lavender farm. From sourcing equipment to marketing to registering your EIN, we lay out practical advice to get started. Follow this roadmap and let your dreams of lush lavender fields come to a fruitful life.

1. Conduct Lavender Farm Market Research

Before planting your first lavender shrubs, extensive market research is critical for success. The aromatic, versatile lavender plant offers multiple revenue streams. Market research offers insight into which soil is best to plant lavender, and information on the most widely grown lavender species.

Source

To collect thorough market research in French lavender and Spanish lavender, try the following:

• Start by identifying your geographical target and analyzing production in the area.
• France, Bulgaria, Ukraine, Russia, and China lead global production. Compare these outputs to your state and county’s current and historical lavender cultivation.
• Consumer demand for growing lavender is rising faster than supply, especially for organic, therapeutic-grade lavender.
• Research key application markets like personal care, home care, healthcare, and food/beverage.
• Survey existing lavender product availability in your target geography and price points across retail channels both online and brick-and-mortar stores.
• Understanding end-user preferences also enables effective product development down the line.
• Discover desired delivery methods, strengths, hybrid blends, and packaging through consumer surveys on social media and direct outreach to prospective retail partners.
• Local hospitals, spas, pharmacies, specialty boutiques, and even restaurants present additional B2B sales channels beyond direct-to-consumer e-commerce.

Monitoring industry trends keeps your business model aligned with shifts in consumer behavior and cultivation challenges like climate change. Subscribe to essential oil publications and follow key lavender suppliers on social media.

2. Analyze the Competition

With over 700 lavender farms operating across North America, competition analysis is essential for positioning your business. Start by identifying direct competitors, other lavender farms, and lavender product sellers in your target region.

Browse top listings for dried lavender buds, lavender sachets, and lavender oil, noting pricing, reviews, and shop policies. This shows where your product quality and buying experience must excel to divert their customers. Complement this with Google searches using keywords like “buy English lavender oil [your city]”.

For area lavender farms, compile a spreadsheet with their acres in production, product range, direct-to-consumer options, and product pricing. Including less obvious factors like Google/Facebook reviews and newsletter reach gauges their customer base and helps avoid direct overlap with your positioning.

Analyzing both online and brick-and-mortar competitors from various business models provides a complete picture. For example, a successful Etsy shop with thousands of sales may validate customer demand for artisanal culinary lavender despite a saturated local market.

3. Costs to Start a Lavender Farm Business

Starting a profitable lavender farm requires significant upfront investment before seeing flower and oil revenue. When budgeting, base estimates on factors like acreage, irrigation access, and equipment needs.

Startup Costs

• Land Purchase or Lease – Buying cropped land ready for harvesting lavender with irrigation and suitable soil will cost $15,000-30,000 per acre. Leasing farmland can lower overhead, around $750 per acre annually.
• Soil Preparation – Lavender needs well-drained, slightly alkaline soil. The average cost for testing and amending pH on 5 acres is $1,500. Establish proper drainage if needed.
• Plant Purchase – Lavandula angustifolia and Lavandula intermedia plants cost $3-5 each from specialty nurseries bought in bulk. Allot $15,000-25,000 for a 5 acre, 3000+ plant farm.
• Irrigation System Installation – Drip irrigation suits lavender best. Installation averages $800 per irrigated acre if water access exists onsite. Wells or additional pond/stream access can add $15,000+ in permits and equipment.
• Farm Equipment and Tools – Essential purchases like a small tractor, tiller, soil amendments spreader, planting auger, and harvest storage bins total approximately $50,000. Hand tools like pruning shears and harvest knives cost around $500-1,000.
• Facilities – A large barn or outbuilding for drying, distilling, and storage runs $20,000-50,000 depending on power and insulation needs. Other basics like fencing and signage average under $5,000.
• Professional Fees – Lavender farming consultants provide invaluable launch guidance for $100 per hour. Business incorporation filing fees total $500-1500 depending on location and business structure. Trademark key products and branding for $275 per mark.
• Staff – Part-time seasonal helpers cost at least $15 per hour. Initially allot $15,000-20,000 for labor unless planting yourself.

Ongoing Costs

• Land taxes/leasing – $100-750 per acre as applicable
• Water usage – $60 per irrigated acre
• Equipment maintenance – 10% of the purchase cost as reserves for repairs/replacement
• Facilities upkeep – Allocate at least 5% of building value for annual maintenance
• Labor – Farm helpers at $15/hour for planting, pruning, harvesting, processing
• Input supplies – Soil amendments, lavender food, propagation materials, etc around $100 per acre
• Admin, licensing, and professional fees – Expect roughly $10,000 for licensing, accounting, legal, etc

Conservative financial planning and phased expansion keep lavender farm operations sustainable for the long term. Adjust projections based on your specific capabilities and limitations.

4. Form a Legal Business Entity

Structuring your lavender business as a formal legal entity designates critical legal and tax considerations for operations. Weigh options like sole proprietorship, partnership, corporation, or limited liability company (LLC) to determine the best fit.

Sole Proprietorship

A sole proprietorship provides the easiest, low-cost set-up if you will be the only owner. As a single farmer, you and your business function as one entity. This common first structure leaves you personally responsible for all farm debts, legal disputes, and tax liabilities.

Partnership

Forming a legal partnership engages multiple owners sharing control and profit/losses. A formal Partnership Agreement outlines each individual’s equity percentage, capital contributions, and dissolution process. Partnership downsides include equal legal liability, financial risk across personal assets, and the potential for serious disputes among partners.

Corporation

Establishing a standard C-Corporation or S-Corporation erects the strongest business/personal asset barriers under state laws. Corporations levy major legal and tax implications, however, like double taxation risk, administrative bureaucracy, and public financial reporting. Unless launching large-scale global lavender operations, most farmers avoid this complex entity.

Limited Liability Company (LLC)

Forming a Lavender Farm LLC fused with corporate benefits and the simplicity of sole proprietorships proves an ideal compromise for most growers. LLC registration better protects personal assets like homes if your farm faces lawsuits or bankruptcy. It allows unlimited business losses to offset personal income without self-employment tax filing burdens.

5. Register Your Business For Taxes

With your LLC formed, obtaining an Employer Identification Number (EIN) from the IRS creates your business’s official tax ID. This unique number identifies your lavender farm’s tax and banking accounts during filing. An EIN also establishes a business credit history tied directly to the company rather than your SSN.

Applying takes under 10 minutes on the IRS EIN Assistant site. Simply select your LLC tax classification status, enter basic information like principal business location and mailing address, and submit. Provide your SSN when prompted for one responsible party tied to the EIN. Instant online approval emails your new EIN for use.

If selling products in your farm’s home state, register for sales tax by submitting a State Tax ID Application. This only takes a few minutes on your State Revenue Department’s website. Filing ensures compliance in collecting, reporting, and remitting sales tax from customers. It may integrate directly with your EIN.

While both registering an EIN and State Tax ID are free, set reminders for important ongoing filing deadlines each year:

Federal Tax Forms

• Form 1065 – Annual company return for partnerships and LLCs due March 15
• Form 940 – Annual federal unemployment tax return due January 31
• Form 941 – Quarterly payroll tax filings due April 30, July 31, October 31, and January 31

State Tax Forms & Sales Tax

• Form ST-101 – Monthly or quarterly sales tax filings, due between the 1st and 20th of each period depending on the state
• Annual report – LLCs must submit an annual report to maintain status, due dates vary by state. Filing fees average $100.

Consider enlisting an accountant from the start to ensure full tax compliance. They also advise maximal small business deductions and credits to minimize tax liability. Expect to dedicate at least 10 hours annually to record-keeping and working with CPAs on optimal taxation strategy.

6. Setup Your Accounting

With an LLC formed, establishing professional accounting practices ensures farm profitability and avoids IRS issues. As an agriculture business, properly tracking numerous transactions across inventory, payroll, sales tax and more presents complex record-keeping challenges.

Accounting Software

Using services like QuickBooks builds essential financial visibility. Online seamlessly connects income, expenses, invoice billing, and tax payments across one dashboard. Integrations with bank accounts, e-commerce platforms, and billing systems auto-import most data.

Hire an Accountant

A dedicated accountant provides bookkeeping assistance, reconciling bank/credit accounts, calculating quarterly estimated taxes, and compiling all documentation for annual tax filings. Expect to pay at least $800 annually for an accountant if only leveraging their expertise during tax season.

Open a Business Bank Account

Whether using software or an accountant, separating all lavender farm banking and expenses from your finances is crucial. Open dedicated small business checking/savings accounts and credit cards solely for farm use. Never commingle these funds.

Business credit cards often offer rewards tailored to agricultural needs like fuel discounts. Available credit limits anchor off time in business and annual revenue, starting around $500 for new LLCs. Have your EIN and LLC documentation ready when applying.

7. Obtain Licenses and Permits

With land and plants secured, proactively research required licenses and permits for legal lavender farming in your state and municipality. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.

Start by contacting your state’s Department of Agriculture and local county agent office. Inquire on crop growing and selling permits, which often cost $50-100 annually. These allow in-state movement of harvests and validate your status as a commercial farm business rather than a hobby gardener.

Certain lavender oil extraction methods also necessitate permits. Common steam distillation processes require state air quality control certification with annual reporting on used equipment and extraction gallons. Mobile distillation trailer rental from other farms skips this hassle while allowing small batches under another farm’s existing permit.

If selling dried bundles or other lavender products within county lines, no additional seller’s permit beyond state sales tax registration applies in most regions. Check if municipal or county vendor licenses costing around $20 each year govern local brick-and-mortar shops or public marketplace kiosk placement, however.

Safely hosting U-Pick days and workshops regularly makes County Planning Commission approval necessary for agritourism. These permits allow parking, restrooms, and other infrastructure considerations for guests.

Importing plants internationally requires stricter USDA licensing. The APHIS PPQ 526 Form registers essential info on shipment contents, origins, and seller credibility. In some states, farmers must also pass a certified nursery professional exam to legally propagate and sell plants. Testing fees cost around $100.

8. Get Business Insurance

Business insurance shields lavender farmers against unexpected disasters threatening costly crop and property damage. It also protects customer safety during farm visits mitigating liability claims. Evaluate essential coverages as protection against:

• Property Loss: A common plan covers buildings, equipment, harvested materials, furnishings, and other assets onsite. This safeguards against fires, floods, tornadoes, vandalism, and theft with funds to replace destroyed infrastructure.
• Liability Expenses: General liability insurance handles 3rd party personal and property injury claims if a guest gets injured on a wet pathway or poisoned by unexpectedly spoiled lavender tea bags for example. It covers legal fees and any settlement costs found negligent.
• Employee Injuries: Workers compensation insurance meets medical and lost wage costs if a farm worker suffers a tractor crash or snake bite on the job.

While unnecessary for home gardening, acres of crops and sales to consumers create immense risk exposure. Just a few uncovered incidents could bankrupt dreams of a thriving lavender business:

• A distraction while operating equipment led to an injury and workers’ compensation claim from a helper: $80,000
• Guest falling on gift shop steps resulting in spinal injury lawsuit: $250,000
• Barn electrical fire igniting dried bouquet materials destroys structure and contents: $400,000+

The average annual premium across recommended policies starts at around $2,500. Comparing quotes across Farm Bureau Insurance, State Farm, Nationwide and regional agriculture providers finds optimal terms. Expect higher rates initially as a start-up before loss run history is established.

When ready for coverage, prepare key details ahead of agent meetings:

• Onsite hazards, safety protocols, and security features
• Square footage of structures like barns, processing facilities, and retail spaces
• Value of equipment, tools, and inventory
• Historical weather damages in your area
• Number of employees and sales

Selecting the right business insurance package secures financial longevity through unpredictable circumstances. Confirm agent familiarity with lavender cultivation operations rather than just broad agriculture experience.

9. Create an Office Space

Administering a successful lavender farm relies on organization across countless tasks from licensing paperwork to shipment logistics and vendor relations. Designating office space whether at home or separate facilities enables focus on critical planning rather than field demands.

A Home Office

Converting a spare bedroom or basement corner into a basic desk setup costs little, with tax write-off benefits. This offers easy access to files, marketing materials, and communication hardware for early-stage market research, 1:1 consultations, and establishing operations blueprinting.

Coworking Office

As collaborative opportunities and staffing expand, leasing desks within a coworking space provides professional infrastructure amongst like-minded entrepreneurs. Memberships at sites like WeWork start at around $300 monthly including amenities like printers, and conference rooms.

Storefront Office

If launching farm-direct retail onsite whether a gift shop, café, or U-Pick check-in area, allocate office space enabling customer relations and oversight. This may adjoin the store itself or structure separate for seclusion balancing privacy and accessibility. Budget $5,000-15,000 for build-out costs like drywall, power, furnishings, and decor.

10. Source Your Equipment

A new lavender farm needs ample equipment and materials before first planting. Compare options for buying new, used, or leasing essential items:

New Equipment

Specialty retailers like Farm & Field offer broad catalogs of agricultural machinery and tools for every planting, cultivating, and harvesting task. Expect premium prices on tractors, seeders, cultivators, and distillation equipment which carries extensive manufacturer warranties. Budget at least $75,000 total for heavy equipment.

Used Equipment

Buying quality used equipment through farm liquidations and auctions saves over 50% upfront. Shop deals on sites like TractorHouse and Fastline. Also, check local classifieds on Craigslist and Facebook Marketplace for nearby sellers. Expect to pay mechanics $100+ hourly for inspection and refurbishment before workability guarantees.

Rent Equipment

Newer farms starting small can defer major equipment purchases through rentals from national companies like Hertz or regional operations found via Google searches. Tractor rentals average $500 weekly. This rotating equipment access spreads the cost over the years as scaling harvest output justifies eventual buying.

Lease Equipment

Equipment dealers and financing companies offer long-term lease-to-own loans on essentials like stainless steel distillation tanks, steam generators, and bottling apparatus costing $50,000+ new. This acquires modern functional equipment through fixed annual payments over 3-5 years.

11. Establish Your Brand Assets

Before debuting the first products, thoughtful branding builds customer recognition and fuels growth for new lavender businesses. From logos to websites, consistent visual identity repeatedly exposes target buyers to the farm’s unique look, personality, and offerings across every touchpoint.

Getting a Business Phone Number

Purchasing a dedicated business phone and number from a service like RingCentral upgrades credibility instantly over personal cell contacts. Expect just $20-30 monthly for unlimited calls, SMS texts, voicemail, and advanced call routing to any device. This unified communication streamlines customer relations at every phase.

Creating Logos and Brand Assets

A polished, memorable logo establishes first impressions to stick in customers’ minds. Given lavender gifts massive increase in popularity, setting creative brand positioning is vital. Graphic design marketplaces like Looka offer affordable AI logo generation.

Print Business Cards

Every sale encounter deserves durable business cards to grab client focus on the farm’s offerings. Exchanging cards while consulting potential wholesale partners or addressing guest inquiries cements the next step back in touch. Online print shops like Vistaprint ship professional designs affordably.

Purchasing a Domain Name

The farm’s website address equally leads buyers to the brand digitally at every advertisement or packaging mention. Domain registrars like Namecheap offer domains for $9 annually. Optimizing domain names around top products like LavenderRidgeFarm improves findability in searches.

Building a Website

An immersive website transforms curious visitors into loyal customers by showcasing offerings and farm culture 24/7/365. DIY website builders like Wix enable affordable, beautiful site creation. Delegating custom site development to web programming freelancers on Fiverr is another option.

12. Join Associations and Groups

Navigating the complexities of launching a profitable lavender farm relies heavily on connections. Joining regional associations, attending trade events, and participating in industry online groups accelerates knowledge gathering from fellow growers years ahead.

Local Associations

Area lavender or specialty crop associations share best practices from soil health to oil distillation through seasonal workshops, newsletters, and online member forums. The United States Lavender Grower Association and Lavender Growers of Colorado rally experts guiding regional growing challenges.

Local Meetups

Ongoing networking through annual trade shows like the Original Green Expo forges farmer connections and vendor partnerships in person. Scout grants, certifications, and new equipment releases as well. Event discovery platforms such as Meetup centralize upcoming conferences, markets, and association meetings through keyword searches.

Facebook Groups

Free online communities enable 24/7 business inquiries and inspiration between lavender farmers globally. Request access to established groups like The Business of Lavender-Professionals Only to meet like-minded growers.

13. How to Market a Lavender Farm Business

Implementing ongoing marketing spotlights your fragrant lavender farm offerings to ideal buyers, nourishing exponential growth. Lean on digital channels and real-world networking with equal diligence across multiple initiatives simultaneously for an omnichannel advantage.

Source

Referral Marketing

Recognize existing contacts represent the most promising sales leads. Early customers provide referrals if delighted by products and experiences. Offer 10% off their next purchase for every new customer they send your way. Nothing convinces like word-of-mouth from trusted sources.

Digital Marketing

• Launch Google search and display ads tied to relevant keywords around lavender gifts, organic skincare, floral scents, etc. geo-targeted to your delivery region. Expect to spend $100-200 testing monthly.
• Post educational Facebook and Instagram content around lavender recipes, oil extraction processes, and decor inspiration multiple times weekly. Geo-target amplification ads at $5 per day driving visitors to book tours or shop.
• Start a YouTube channel documenting behind-the-scenes operations from pruning to distillation tutorials. Optimize video titles and descriptions for search visibility.
• Guest post articles on leading blogs sharing farmer journeys to support links and brand mentions back to your site. Pitch specialists like The Thyme and Place, A Life from Scratch, and Rooted Revival.
• Send new product press releases to agricultural publications like Growing Produce, Maximum Yield, and Urban Farm. Securing features brings industry authority.
• Agrotourism can play a big role in bringing more customers your way so consider opening up your business to tourists.

Traditional Marketing

• Print full-color postcard mailers spotlighting seasonal bloom tours and gift shop offers to send existing customers. Expect $0.50+ each for quality cardstock and messaging personalization touting specialty product launches. Segment households by purchase recency and order value.
• Place flyers for upcoming U-Pick weekends and lavender festival dates in local garden centers, floral shops, farmers’ markets, spas, and boutiques. Bring complimentary flower bundles as part of initial partnership outreach and express permission to display materials.
• Arrange a booth at busy regional home and garden shows providing scent sample giveaways. These venues align with target buyers though tend to cost $1,000+ for viable spots.

The most successful lavender farms intertwine digital convenience and tangible experiences artfully across each season. Maintain robust email subscriber communications in between to nurture the community. Conscientious marketing keeps interest fragrant even when fields lie fallow.

14. Focus on the Customer

Delighting lavender lovers drives repeat sales and referrals as your fastest business growth engine. Customer service presents make-or-break opportunities with every order, tour, and query by shaping fondness for your farm’s helpfulness and hospitality.

Source

Some ways to enhance customer focus as you plant and harvest lavender include:

• Respond to Instagram questions about field access within 30 minutes so photographers plan shoots before dusk rather than losing their desired golden hour lighting waiting.
• Proactively message VIPs the afternoon before scheduled estate tours if rain threatens so they may reschedule, rather than leaving them surprised at a muddied venue.
• Carefully wrap glass bottle shipments in bubble padding knowing the gifts are special keepsakes for recipient enjoyment.
• Little frustrations push patrons to the next best farm options while little delights seed their online raves and gift referrals.
• Refilling a tour guest’s perfume sample vial for free so they need not buy a full bottle today to keep enjoying the aroma creates a memorable impression worth sharing compared to a quick sell-only interaction.

Ultimately customer centricity cements your position as the supportive farmer resource regional lavender lovers tell friends about first. The compounding word-of-mouth referrals from delighted visitors who feel genuinely cared for build community loyalty no Google ads can ever compete with.