Personally, I prefer to start out with basic shapes and colors instead of starting out with detailed line art. Even when I draw line art, I start out on paper so that it's easier to sketch out the forms of the creature before I start filling in details.

I'd start with the shape of the tree as a whole, then add the largest parts, like the hat, the arms and the face. Then gradually add more and more details. I think placing the different parts in relation to each other and getting proportions right is much easier this way, and I can see what I'll end up with fairly quickly. You can get advice on colors, composition and such pretty much right away. It also leaves some room for vagueness, as opposed to line art.
I don't know if you'd be more comfortable with working that way, but it's something to think about.
