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Home  > Question of the Week

Question of the Week



Permalink What information can you give me on starting a farm and developing a farm business plan?

Z.N.
New York

Answer: I am pleased to provide you with information regarding business plans and production on your new farm enterprise.

Please refer to the ATTRA publication “Market Gardening a Start-up Guide.” This publication provides an overview and an extensive resource list to spring-board you into finding more information on the topic of starting a farm. In the appendix of this publication is a list of different equipment needs for different farm sizes (in acres) this will help guide you to determine the start-up costs of your enterprise. In this letter I will outline some considerations for starting your farm as well as a list of further resources to help you in this endeavor.

Business Planning:
I would advise you to assess your goals, land, and the resources on your land. Some considerations that may help direct your research and save time and much needed energy for starting your new enterprise are as follows:

• Identify your own personal values
o E.g. Do you want to have a certified 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 Or is a mellow 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. You are on very little acreage, so you will most likely need to grow high value crops such as lettuce, flowers and tomatoes.
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 is an issue in many areas of the country. If you have an adequate source of water, this will not be an issue for you.
• 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 E.g. Are you in a rural area? Do you enjoy interacting with people? If you are in a rural area with little market potential, you may need to consider wholesaling or value added enterprises over the internet. 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.
• Once you have an enterprise in mind, develop a business and production plan.

There are many workbooks that are very helpful in working through the myriad of considerations, which I have briefly outlined, in evaluating a rural enterprise. Listed below are some additional resources 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 Minnesota Institute for Sustainable Agriculture has recently 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. They are both available to read and print from the internet and are listed below under resources.

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."

There are also training opportunities in evaluating and planning an agricultural business. The nXLevel course titled “Tilling the Soil of Opportunity” might be helpful for you. The materials are specifically designed for the individual who is searching for innovative ideas and enhanced marketing opportunities in the area of agriculture. This 10–session course is often delivered over an 12-week period.

The two written resources I would recommend are as follows:
A great periodical for market gardeners is “Growing for Market.” It provides excellent practical production information for small-scale farmers, often times written by farmers. “Sustainable Vegetable Production from Start-up to Market,” by Vern Grubinger is an excellent book for start-up information. It has extensive production and marketing information.

You also requested information on enterprise budgets for specific crops. Listed below are enterprise budgets for strawberries, watermelon and raspberries. This should give you an idea of the different costs and income associated with some different fruit crops. If you would like enterprise budgets on other crops let me know and I will print it off for you.

Resources:

Bachmann, Janet. 2001. Market Gardening: A Start-up Guide. NCAT/ ATTRA Publication # IP 195.

Anon. Building a Sustainable Business: A guide to developing a business Plan for Farms and rural Businesses. Minnesota Institute for Sustainable Agriculture. 2003

Woods, Tim and Steve Isaacs. A PRIMER for Selecting New Enterprises for Your Farm. University of Kentucky. Agriculture Economic Series. 2000

Enterprise Budgets:
O’Dell et al. 2001. Selected Costs and Returns Budgets for Horticultural Food Crops Production/Marketing. Virginia cooperative Extension. Virginia State University. Publication Number 438-898

Bolda, et al. 2003. Sample costs to Produce Organic Strawberries in Central Coast California. University of California Cooperative Extension. Publication # ST-CC-03-01.

Further Resources:
nXLevelTilling the Soil of Opportunity” Class information:
Wayne Glass
Adirondack Economic Development Corporation
60 Main Street, Suite 200
PO Box 747
Saranac Lake, NY 12983
Voice 518-891=5523 x 16
(888) 243-AEDC
(518)891-9820 (Fax)

Growing for Market
P.O. Box 3747, Lawrence, Kansas 66046
Toll-free Phone: 800-307-8949
E-mail: growing4market@earthlink.net

Grubinger, Vern. Sustainable Vegetable Production from Start-Up to Market
Publication number: NRAES-104
Cost: $38.00
Length: 280 pages
ISBN: 0-935817-45-X
Date of Publication: August 1999
To order a copy: (607) 255-7654

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