Making a living off the land is challenging and rewarding in equal measure and when you consider that small farms are widely considered to be the backbone of the agricultural industry in the United States and many other countries, you might decide that there is room for you to join their ranks by starting a farming business.
The USDA small farm classification system means that almost 90% of farms are classed as small but still manage to account for just over 25% of all production, which means they are pivotal to feeding the nation.
There is definitely a constant demand for farm produce and that means you will be launching a business in a sector where you should have a readymade customer base, so if you have decided to launch your own farming business, what does it take to get started?
Here are some key pointers on how to start your own small farming enterprise.
A hobby or a business?
It is presumed that you have a passion for farming in some form or another, and that might mean growing fruit or vegetables or rearing livestock.
It is this enthusiasm that will most likely lead you to think that you would like to get into farming on a more serious basis.
It is very important that you think carefully about why you want to start a farming business and this is mainly because your motivation behind the decision will have a direct bearing on the strategy you adopt once you get started.
There are also tax implications that you need to think about at this point.
If you are operating a farm as a side business this could mean you are classified as a hobby farm and that is fundamentally different from a business farm from a tax perspective.
If you are now ready to turn a hobby into a business it would be a good idea to get some professional assistance in setting up the correct tax structure before you start working the land in earnest.
Over 95% of all farms in the United States are family owned so it is possible that you come from some sort of farming background or might have even grown up on a farm, which would help you to know what you are getting into.
If that isn’t the case, how does that affect your prospects of starting a farming business?
If you don’t have any sort of farming background and just have your enthusiasm to get you through this could be a concern as making a living as a farmer could prove to be a reality check as farming work is hard anyway but becomes even more challenging when you are doing it as a business and need to generate an income.
A lack of experience shouldn’t be a barrier to starting a farming business but it might help to see if you can get some hands-on training at a commercial farm beforehand so that you acquire some of the skills and knowledge that you will need when you go it alone.
Learn on the job
As with most professions, farming is a job that you can learn best by getting your hands dirty and doing it on a daily basis.
It can be a steep learning curve at times but you should find that the farming community tends to be very supportive and you should be able to get some guidance through networking when you need it.
Get involved with any local growers associations or similar setups as fellow growers are often happy to impart their wisdom and this level of support could be critical in the early days while you are still finding the best way to work the land for profit.
Lease or buy the land?
Another major decision that you will have to make when starting your farming business is whether you should buy the land or lease it.
There are a couple of major points to consider when trying to decide which is the best option.
Firstly, if you buy the land this will give you much greater control over how you use it but the obvious drawback to this option is the fact that you will have to finance the purchase, which is a big financial risk as well as huge commitment.
Leasing the land you need is often the default option when you first start out in farming as it helps minimize your level of financial exposure and risk, plus you won’t have to find a large amount of capital to get started.
You might have a plan to buy some land in mind but it often makes sense to get started by taking the leasing route and then look for some land to buy once you have gained some experience and cash flow is more reliable.
Financing the equipment you need
You will need a certain amount of tools and equipment to enable you to work the land efficiently and this can also be a drain on your financial resources as some agricultural items are very expensive.
If you prefer to buy if possible and own the items outright, you can find sites that auction farm equipment, allowing you the chance to bid on items for a price that might be much lower than if you were buying new.
The other option is to lease the equipment, which should help your cash flow in the early days of your business.
Funding and finance
Staying on the subject of money, it is essential that you explore all your funding options as this will ensure your fledgeling farming business gets underway with the best chance of succeeding.
Make sure you produce a business plan, as this will be required by anyone offering your finance. Also, check out what grant options are available to you, as you might be able to get some government assistance with your new venture.
In addition to all of the considerations mentioned you will also have to have a plan in mind as to how you are going to market and sell your products.
There is a lot to take in and sort out once you have decided to take the plunge and launch a farming business, but the satisfaction of knowing that you are doing your bit to help feed the nation should make it all worthwhile.