3 How To Start A Small Farming Business (Complete With Pictures)

doylc.com - How To Start A Small Farming Business - Small family farms make up the majority of the agricultural industry. At their core, these small operations are still businesses and must be organized and managed to the same standards as any other small business. Spend time learning about the farming industry and the demands of the profession, and then you'll be ready to set up your farm and start growing.

• How to building your resources

conduct market research. Just because you have a great idea in mind doesn't mean it's profitable. Study the demand in your area so you know which crops or livestock people are most likely to buy.

State departments of agriculture collect statistics and can be a good starting point for you. You may also want to look at information from university agricultural departments, as well as industry publications and websites. For example, the United States Department of Agriculture (USDA) has a wealth of informational pages on its website that are available to beginners free of charge.

Consider distribution. You may not be able to invest in a distributor for the first few years. Focus on demand locally or regionally rather than nationwide.

Choose your crops or your livestock. Your market research should give you an idea of ​​what crops or livestock are in demand in your area. Whether you can grow these plants depends on a number of factors, such as: B. where the farm is located and how big it is.

Evaluate the climate in the area and make sure it is generally conducive to growing the crops you have chosen.

Once you start looking at actual farmland, you should also pay attention to the soil quality and the farm's growth history. For example, don't assume that you can grow corn just because the farm across the street has corn.

Contact local farmer groups and agricultural schools. The agricultural representation at your nearest agricultural school usually has a wealth of information and resources available for aspiring farmers. Local farm groups can also offer you help and connections.

Agri-cooperative organizations in the US also provide a wealth of information on their websites. All of these can be helpful, but they're no substitute for going out and getting your hands dirty.

Visit your nearest agricultural service office. Most governments have an agency or department for agricultural services, such as B. the US Farm Service Agency (run by the USDA). These offices offer you technical support, advice on business and financial planning and important information on local and regional agricultural developments.

The Farm Services Office may offer free financial and legal services that would normally cost you a lot of money.

Take the time to introduce yourself to the office staff and tell them that you would like to start a small farming business in the area.

Check state and local regulations. Familiarize yourself with the regulatory environment in the region where you intend to operate your farm before committing to purchase or lease land or farm equipment.

In particular, look at the zone restrictions. Some farming activities may be prohibited in certain areas or require expensive permits and inspections.

A regional farm group or farm service office can help you figure out what specific licenses or inspections you need to get started.

Find out how long it takes to process applications and what the licensing fees are so you can factor this into your overall business plan.

Make sure you have enough land. If you don't already have land, look for available agricultural land in the general region where you want to operate your farm. Check zone codes to make sure you can raise the crops or livestock you want there.

Make sure the land has an adequate water supply and is close to a major body of water or is effectively irrigated. In general, you should have at least 0.3 to 0.4 gallons (1.1 to 1.5 liters) of water available per day for each square foot (0.09 square meters) of growing space.

Conduct soil quality tests and make sure the environment and conditions are hospitable to the plants or livestock you plan to raise. You can perform basic tests yourself, e.g. B. Evaluate the color and texture of the floor. Test kits for checking soil pH are relatively inexpensive and will give you additional information.

Seek government help. Depending on where your farm is located and what crops or animals you want to produce, you may be eligible for government grants and loans. In many areas there are grants for new organic farms.

Environmental nonprofits can also provide grants and other support to farmers who run sustainable operations.

Do an online search to find out what government agencies and nonprofit organizations operate in your area. You can also speak to local farmers to get an idea of ​​other resources that might be available.

• How to setting up your business

Draft a formal business plan. Especially if you are self-funding your small farming business, you may feel that a formal business plan is not necessary. However, a formal business plan can help you see your farm as a business and take it seriously.

Rely on your market research to generate profitability forecasts. Keep in mind that small farms typically take several years to get off the ground.

If you plan to run your farm as a sideline or hobby farm, a business plan can still help you organize your farm's finances and prevent it from taking over your personal funds.

Go through your plans with an advisor. When you have your business plan ready, have a business founder or financial advisor review it and make suggestions for improvement. Look for someone who has extensive experience working with successful small farming businesses.

Contact a state agricultural office or regional agricultural group if you are having trouble finding a good advisor. Employees at one of these locations can usually make a strong local recommendation or two.

Choose the business structure of your small farm. When you start out, you have the choice of running your small farming business as a sole proprietorship, limited liability company, or corporation. Which form you choose will depend on your business goals and the level of personal risk you are willing to take.

When you organize your business as a sole proprietorship, your business is in no way separate from you and your personal finances. This might be the easiest option if you only run your farm as a side hustle and have a full-time job.

A corporation offers you the most personal protection, but is also the most expensive and time-consuming form. You can join at any time, so wait for your farm to start making profits.

An LLC or limited liability company offers all the advantages of a corporation and sole proprietorship without their disadvantages. Choose this form if your goal is to someday live off your farm.

Get a tax identification number for your small farming business. Even if you don't hire employees (although you probably will), you will need a separate tax identification number for your farm so that you can pay taxes on farm income.

If you are in the United States, getting an Employer Identification Number (EIN) is fairly easy. Just answer a few questions about your business and you can get your EIN right away. Write it down or print it out and keep it in a safe place.

You may also need a separate tax identification number for state or local taxes.

Register your farm with the agricultural services. If you haven't already made friends with the staff at your nearest Farm Service Bureau, now is the time to do so. Make an appointment to register your business so you can take advantage of government subsidies or perks.

Bring ownership documents along with proof of identity and business organization documents.

Once registered, ensure that you report any changes in ownership or organization of your business as soon as possible and keep your contact information up to date. You may be required to submit area reports and other documentation on a regular basis.

Obtain all required licenses and permits. Depending on the crops or livestock you raise, the state or local government may require regular inspections and licenses for your farm.

For example, if you sell grain to the public, you may need a license certifying that your storage facilities meet local health regulations. Your local city or county office is one way to find out what licenses are needed. You can also talk to neighboring farmers and learn what you need from them.

Your state university's agricultural extension program will usually have specific information and resources to help you handle any licenses or permits you may need at the local or state level.

• How to establishing of your farm

Assemble your leadership team. You probably won't start a farm all by yourself. Typically, you need at least two or three people to help you manage the farm and set policies and procedures to keep the farm running smoothly and efficiently.

Write job descriptions and discuss the development of the farm and any gaps in funding or equipment you still need. For example, you may have one person responsible for harvesting, one for planting, and one for marketing and selling your farm.

You also want to establish safety policies for the farm, both for the people who work there and for any visitors you might have. For example, they can require special training before anyone can operate large farm machinery and prohibit anyone from operating farm machinery if they are under the influence of alcohol or certain drugs or medication.

Take out all necessary insurance. Farming is a dangerous business and there are many risks. In addition to basic liability insurance, you may want to purchase crop, yield and livestock insurance.

Crop insurance protects you and your business should a disaster affect your crops. It also guarantees a minimum income each year based on the number of acres you have planted. Contact your local agricultural services office to find out what types of insurance are available and where the companies offer them so you can shop around for rates.

If you still need financing, crop insurance can open the doors to further financing options. Your farm is a much more attractive investment if you have crop insurance because the lender knows you will pay the money back.

Secure any financing. If you don't have the funds to get your farm up and running, you have several options, including loans. The federal government does not typically offer grants to people starting a small farm, but there are grants and other support options.

Some of the money available depends on whether your business is a hobby business or you want to run it profitably. There aren't as many loans available for hobby farms, and many government subsidies are only available to working farms.

Hire farmhands. When it's time to harvest, you may need extra hands to help you pick and harvest your plants for the season. If you plan to hire full-time employees, you may need to refresh employee wage and hour standards and tax withholding requirements.

Hiring day laborers isn't typically regulated in the same way as hiring regular full-time or part-time workers, but you still need to check with your state government and make sure you comply with all applicable minimum wage laws, those with children, labor and other laws.

Set up your records and accounting systems. If you want your operation to be profitable, you must maintain accurate daily and weekly records of operational and financial data such as: B. the amount of crops harvested and sold or the number of hours worked. You can keep records by hand on paper, or you can use accounting or record-keeping software.

Your local farm group or agricultural extension program may offer classes on common accounting and record-keeping software.

It doesn't matter what system you use, as long as you use it. A computer app is no better than a spiral-bound notebook if you never turn it on. Take at least 10 minutes a day to update your records.

Develop promotions and marketing channels. Even if you're just starting out, you should still network to find clients for your operation. Local restaurants can be a good place to start, and discounts for your first customers will help get your farm off the ground.

For example, you could offer a discount if a customer refers someone else to your business who ends up buying from you. Better yet, give the discount to both the new customer and the person who referred it.

Set up social media pages so you can talk and interact with people and spread the word about your farm.

You may also place ads in hospitality industry publications or retail websites.