Question of the Week
Answer: Thank you for your recent request for information from ATTRA, the National Sustainable Agriculture Information Service. I am pleased to provide you with information regarding evaluating an enterprise for your prospective farm operation.
Below is a direct link to the ATTRA publication titled “Evaluating a Rural Enterprise.” This publication provides an overview and an extensive resource list to spring-board you into finding more information on this topic. You can access the HTML version of this publication at:
I would advise you to assess your goals, land, and resources on your land initially, before deciding which crop to grow. Some considerations that may help direct your decision-making and save time and much needed energy when developing a farm business are as follows:
• Identify your own personal values
o E.g. Do you want to have an organic farm?
o Do you want to spend more time with your family
o Do you want an enterprise that will equal your current salary,
o Is a different lifestyle your goal?
• What are your personal goals and vision for your property
o While this is closely related to the above bullet, you can create your goals for your property based on your personal values.
o This is often left out of business planning templates, but can be an important component in your assessment.
o It is something that you can, and should, come back to when there is a question about what direction you want your business to go.
• Assess your property
o Consider size, location, soils, resources on your property
o (e.g. do you have a wood lot? Juniper makes great firewood and could be sold in the winter)
o Soil is an often overlooked aspect of farming enterprises, but it is a very important one. Optimum soil will give you more production options, but certain crops or livestock give you more flexibility with soil quality.
o Water access and cost is a very important considerations. In Tennessee this may be more for insurance purposes when the region is going through a drought. Are you planning on using a pond for irrigation? If so, does it have an adequate recharge rate to get you through the driest parts of the growing season? Vegetable and fruit cropping are the more water intensive cropping systems.
• Market assessment
o Marketing is an often overlooked aspect of developing a new enterprise.
o Location, your personality, and production interests are things to consider in this assessment.
o Questions to consider when developing a marketing plan:
Are you in a rural area? Do you enjoy interacting with people? E.g. If you are close to an urban area and enjoy working with people, a Farmer’s Markets might be a good and safe venue to sell your products.
Do you have another occupation? Then wholesale marketing, which takes less time and energy might be better suited for you.
• Once you have an enterprise in mind, develop a business and production plan.
o ATTRA can help you with this, but we would need to know what types of crops you ultimately would like to grow on your land.
There are many workbooks that are very helpful in working through these myriad of considerations, which I have only briefly outlined above. I have listed below under further resources some additional information to help guide you. I have found that there are many different strategies; some being goal based and others being enterprise budget-based. The two that I have found most helpful in my own personal situations are:
The Cornell University Beginning Farmer Program has a free tutorial that will take you through goal setting and enterprise decision making. It is interactive and packed with information. The link to get started is:
The Minnesota Institute for Sustainable Agriculture has developed a goal based workbook and resource list. The workbook, titled Building a Sustainable Business: A Guide to Developing a Business Plan for Farms and Rural Businesses is quite helpful in taking the reader through the steps that I outlined above.
The University of Kentucky has developed a tool for evaluating new enterprises for a farm or family business titled “A PRIMER for Selecting New Enterprises for Your Farm.” It is a resource that works more from enterprise budgets and is based on worksheets used to evaluate the "Profitability, Resource requirements, Information needs, Marketing decisions, Enthusiasm for, and the Risk associated with a new enterprise." The link is listed below under further resources.
Anon. 2003. Building a Sustainable Business: A guide to developing a business Plan for Farms and rural Businesses. Minnesota Institute for Sustainable Agriculture.
This is available to purchase for $17.00 from the Sustainable Agriculture Research and Education program or download for free.
Woods, Tim, Steve Isaacs. A PRIMER for Selecting New Enterprises for Your Farm. University of Kentucky. Agriculture Economic Series. 2000
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