- A farming business starts with identifying and researching the market you want to produce for. It also takes a comprehensive and smart business plan.
- Next, make an infrastructure plan for storing your produce, not only for the present but also for the future as the farm expands. You'll also need to review your personal finances to make sure you have the resources to make the farm possible.
- Once you understand your finances, it's time to purchase all the materials and supplies you'll need to get started. And finally, you will likely be in debt when you start, so it's wise to have a plan to take it on strategically.
Farming has been a productive, profitable way to earn a living for centuries. Through your own personal effort, effective strategy and planning techniques and good fortune from Mother Nature, you can live off of the land you own and can turn a profit that supports you and your loved ones. If you have the dream of starting a small farming business, you may be wondering how to set up your finances. These helpful tips will get you started on your farming business venture.
1. Identify and Research Your Market
Long before you begin tilling soil and planting seeds, you must carefully identify and research your market. You likely are well aware of the types of major crops that are produced in your local area. Take time to research the market for each and to determine the most cost-effective option to pursue with your space. Consider all aspects of the process, from the cost of seeds and the need for water and pesticides to the price you can obtain in the marketplace.
2. Create a Business Plan
Running a farm is essentially the same as running a business. You have a product to produce, equipment to purchase and maintain, perhaps staff to employ and more. Take time to explore the concept of a business plan, and create one for your business. This will help you to guide your activities as you go along, and it may help you to position your farming business for improved success before you get started.
3. Plan for Your Infrastructure Needs
Your property may already have the farming infrastructure in place, such as various sheds and barns, but you’d still want to double check your storage capacity to avoid future costs. Of course, if you don’t have any usable farm buildings, you will need to build new ones to store your equipment, supplies, and other items safely. If you’re starting small, you should go for prefab and modifiable buildings to always have options when it comes to storage, garages and other structures you’ll need, but which will most likely become too small as your business continues growing.
They’re easy to assemble or disassemble, giving you the freedom of designing to your personal tastes and terrain requirements. Even if your farm has existing buildings that in the future will lack space for your needs, it’s quicker, faster and ultimately cheaper to go with prefabricated structures.
4. Review Your Personal Finances
You may be well aware that farming is not a get-rich-quick option, but rather good old hard work which in time pays off very well. More than that, it may be several months before you see any income from your efforts, and it may be even longer before you turn a true profit. In addition, Mother Nature can wreak havoc on your crops, and you may obtain less profit from the sale of your harvest than you originally planned. You must have a solid plan in place for managing your personal finances through these times.
5. Purchase Equipment and Supplies
Running a farm requires you to have a substantial amount of equipment and supplies on hand. Machines and equipment can drastically reduce the amount of time and effort it takes to till the soil, plant seeds, harvest your crop and more. However, modern machines and vehicles tend to be rather expensive, so if your budget is tight, you may want to start with cheaper, second-hand or older vehicles. You also need supplies such as seeds, fertilizer, pesticide and more. Find the best deal possible on these items so that you can save money on their purchase.
6. Take on Debt Strategically
Many farmers with a small operation need to take on debt initially to purchase the required equipment, supplies and infrastructure. They may also need additional funds to live off of until they can produce a profit. Your business plan can tell you the exact sum of money needed for these purposes. When you take on debt, ensure that you can make the monthly payments. Have a financial plan in place for paying the loan payments in a worst-case scenario.
Starting a small farm business is a wonderful idea as it can enrich your life personally as well as financially. However, it does require financial planning in various ways. Follow these tips to get your business off the ground.