The $133 billion farming industry is experiencing a colossal shakeup. From global warming to technological innovations, farms everywhere are in a state of change. This presents an opportunity for new investors to slip into the market and take their share.
You want to start a farm business but there’s just one problem: You don’t know how. Farming is hard enough, but then you have to consider logistics, market research, and government assistance.
That’s a lot to handle. Make the wrong move and your entire farm business could collapse before it gets started.
It doesn’t have to. This guide will cover the seven essentials you need to start your farm business.
1. Start a Farm With Hands-On Experience
Farming is a complex trade with thousands of years of innovations. Although you can read guidebooks and research farming strategies online, those won’t prepare you for the reality of running a farm.
If you don’t have any experience on the farm, you should get some first. There are, believe it or not, farm schools. You can also become an apprentice for a skilled farmer, which usually includes room and board.
Do you want to start a small farm? You may be able to get away with learning on the job since the risks and logistics are smaller.
Knowledge is critical to running any business. Farming is both sensitive and dangerous, so you don’t want to go into it blind. If anything, try and find an educated partner who can bring real-world experience to your new farm.
2. Locate a Target Market
Since farming can have some massive up-front costs, research is everything. Don’t start a dairy farm just because you like working with animals. You won’t be able to keep them when you discover the local market is inundated with inexpensive milk products.
You have two big worries when you begin your market research. The first is an understanding of local demand. You could transport your local crop to other areas of the country, but the transportation costs will devour your profit margins.
Local competition is another factor. Wisconsin is known as America’s “dairyland.” Although the local market clearly has a large milk industry, do they really need another cow farmer?
3. Lease Viable Farmland
Great farmland will have a major impact on the quality of your farm’s goods. It will also determine transportation costs and regulatory fees.
With your market research, you’ll be starting a farming business with a product in mind. Maybe you’ve found a niche for strawberries up in Oregon state. You’ll want to choose land in a climate that supports the target crop.
Have some testing done on potential farm sites. If the soil is lacking key nutrients, you’ll have to account for fertilizer costs. Consider as well your proximity to fresh water since you’ll be using it on a daily basis.
When it comes to purchasing farmland, you can either buy or lease. Even small farms need large swaths of land — and that’s not always affordable. New farmers prefer to save money by leasing land and testing their business strategy.
4. Acquire Funding
Starting a farm requires a significant amount of startup money. Besides land costs, you’ll need to buy seeds, fertilizers, equipment, farmhands and more.
Small farmers may have to rely on business loans to get started. However, many government subsidies are available depending on your farm setup.
Remember that a large farm will cost significantly more than a smaller one. It’s in your best interest to start with a quaint patch of land. As your business succeeds, you’ll have a steady stream of revenue which you can use to grow your business further.
5. Purchase Farming Equipment
You’ll need specialized farming equipment depending on the farm’s size and produce. Some of these items, such as a simple tractor, can be major expenses and costs tens of thousands of dollars. So how do you get by?
Few farmers buy new equipment firsthand. Once you decide on your farm’s agricultural machinery, hit the auction block. Retiring farmers or those purchasing new stock will sell their equipment at an auction, allowing you to save big.
Want more information? Learn more about buying farm equipment at an auction.
6. Talk to an Agent About Permits and Regulations
Agriculture is a heavily regulated industry. On both a state and national level, every new farm requires a variety of permits. Although you can research this yourself, you should save time and protect your investment by talking to a legal professional.
This ensures you won’t miss anything if you choose to navigate the legal battlefield on your own. The consultation fee will likely cost far less than a legal fine. During this process, you should also pick up farming insurance.
7. Create a Network
The advice of other farmers can help you get the most out of every harvest and connect you with new business opportunities. Don’t run an insular business.
Instead, create a network of farmers that work with the same produce or livestock. These might be your physical neighbors or those from online communities and magazines.
A support system is crucial, especially when you’re getting started. If you’re struggling, fellow farmers will be there to help you.
Get Started With Your Farm Business
George Washington once said that “agriculture is the most healthful, most useful, and most noble employment of man.” That romanticized outlook still holds true to this day. There’s something uniquely rebellious about farming in the modern world.
And if you want to start a farm, it’s only a few steps away. Whether you want a small farm or a large farming enterprise, it’ll be a business like nothing else.
Looking for your next big business opportunity? Check out our website for more information.