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How do I start my own farm? (and make money)
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There are as many different types of farms as there are farmers. Thus, while there are some similarities among farms, each farm has a different rhythm and its own set of crazy times. A dairy farm has a different focus from a pick your own fruit farm, for instance. You see what I mean. Fruit and vegetable farms also have different emphases. Some have pick-your-own for all crops, some for a few crops, and some only one crop, and some none at all. Some wholesale, some sell only to restaurants, some have CSAs, some sell only at farmers markets, and some have retail markets. Very few do everything, because each section is its own separate business entity.
We have a retail market, a Community Supported Agriculture program, and restaurant accounts. We did off-site farmers markets for twenty years and decided to make a change.
My mother, at 93 years young, often dispenses wisdom and keeps me humble at the same time. She has assured me that no one is indispensable to the farm’s operation. If I leave, the farm can continue; it might continue differently from its current format, but it can continue. It is a good reminder that in fact, we have changed the way we farm over the decades, adapting to customer needs and desires and to the current farmer’s talents and desires. We don’t grow fields of turnips, because turnips are not a highly regarded vegetable at this point in time (and no one in the family adores turnips). We do grow currants and rhubarb, because we happen to like currants and rhubarb, even if many people do not know what they are. We have also figured out how to sell rhubarb and currants. That is key, if you want to farm as a business.
Thus, if we want to change something because it suits us better at this point in time, we can go ahead and change it. It feels drastic to make a change. “But we’ve always done it this way!” rings in our heads, even though we have not ALWAYS done it this way.
Even if you are already growing something, and now you want to make it official, start with a business plan.
Why are you farming? “Because I love to garden” is not good enough. That means you are a gardener. Here’s the thing: a farm is a business. If you don’t treat it as a business, you will not make any money. Your goal can be to pay down the mortgage, to make enough to pay for vacations, to bring in enough money to fund the retirement accounts. It does not have to be full-time and it does not have to be a huge income. It does have to be serious.
Make your business plan. One page will do it.
If you are starting a small-scale farm, the good news is that you don’t have to know everything at once. Here are some questions you need to address:
- Where will you farm? Location determines a lot of what you can grow. Growing zone, hills, valley, water access. You can improve soil, dig a well, put in raised beds, but you cannot change your weather.
- What kind of farming—animals, crops, value added (goat milk lotion or soap vs. goat milk)?
- SWOT—strengths, weaknesses, opportunities, threats. What are your strengths? What is easy for you? Just because it is easy for you does not mean it is easy or has no value. What is hard for you to do? Are you bad at paperwork and bookkeeping? Who will do it, because paperwork and bookkeeping are critical to farming success. What is an opportunity? Can you grow something that is in high demand but rarely supplied? What are the threats? By this I mean do you routinely have tornados or hurricanes or wildfires that could wipe out your growing season in a minute? Crop insurance will be essential, in that case. Do you have family who will sabotage your schedule or support your work? How will you work with that?
- What’s your business model? High end, online ordering, farmers market, on farm stand, co-op, Community Supported Agriculture (CSA), wholesale, restaurants, food hub, nonprofits, work with a winery or microbrewery?
- What value will it offer customers? What is your Unique Selling Proposition? Fresh, organic, no pesticides, Wagyu beef, raw milk cheese, raw honey, locally grown… what makes yours special?
- Who is your target market? Urban, suburban, rural? What is your market niche? Affluent, working class, food desert, fancy, basic?
- What’s your budget? Land, equipment, supplies, storage, cold storage, permits, market vehicle, market supplies?
- What’s your pricing strategy? Individual pieces, bulk ordering (sell by the pound vs. a quarter beef)?
- How will you let people know what you have? What’s your marketing strategy? Email, advertising, face to face, social media, billboards, website?
- How will you fund this? Savings, Go Fund Me, investor, bank loan, family? If you have a large farm in mind, you can be looking at $1-2 million in start up costs. If you are starting small, such as your backyard, you can be looking at $1000. In whatever way you want to farm is how you can do it. There are as many different kinds of farms as there are farmers.
These are the business steps. Now for the farming steps. Keep in mind that the right answer is the one that works for you.
- What are your goals? Do you want this to be supplemental food and to sell the extras to pay for your groceries? Do you want to make this your full-time job?
- What will you grow or raise? What is the demand in your area for this? What price is charged for this? How much do you have to sell to meet your goal? Read that last question again—what volume do you have to sell to meet your goal?
- Do you have access to customers who will buy these products? If you grow microgreens, but the customers who will buy microgreens are an hour away from you, how will you get the microgreens and the customers together?
- What are the risks in growing this crop or animal? What is the worst that can happen? Will the crop spoil before you can sell it? Is this crop susceptible to weather issues (too much or too little rain, too hot or too cold, wind or hail)?
- How knowledgeable are you about growing this crop or product? We are all still learning, but it helps to have a good foundation. For instance, I know nothing about growing pineapple—not the right climate—so it would be silly for me to think I can be profitable with a pineapple farm. Do you have a mentor who can help you over the hurdles? Can you work on another farm for a year and acquire hands on learning?
- What are the inspection or permitting requirements for this crop? Check with your local Department of Agriculture. They should be able to help you out with this.
- Are you planning on any processing? Turning peaches into peach jam or goat milk into soap or milk into cheese? What equipment is needed, what licenses are required, what storage is required? Can you use a licensed kitchen that is off-farm? Do you need a dehydrator? Permits or licenses?
- Who is tracking expenses? This is essential to survive and to thrive as a farm business. Set this up correctly from the beginning.
- Who is marketing your product? It’s not enough to grow it, you have to be able to sell it. If you don’t have the gift of selling (See SWOT #3 in the first section), you need someone to sell for you. In order to sell it, people have to know about you. Don’t put this off. Marketing and sales are critical for your farm to succeed.
- Who is growing and who is selling your product? If you are doing everything, as often happens with a small farm, it becomes essential to make your workload so that you are not overwhelmed. You need to schedule the time to do each part of the business—planting and growing, marketing and sales, bookwork and tracking expenses. And plan for time off.
You can see that it is more complicated than growing some extra tomatoes and selling them at the local farmers market. If you are doing everything, then it is important to set up your farm so that you can make money from the beginning.
You also want to set up your farm so that you do not work excessive hours all the time. Even if you are making money, too many work hours will sap your physical and mental health. One of the reasons we like farming is because it boosts our physical and emotional health. This means having time off to enjoy your family and the results of the work.
Farming successfully means having money left—profit—after all the bills are paid, including paying yourself. It is very easy to forget about the hours that you put in when tracking costs. This is very important when figuring out pricing. You have to make enough money so that you are willing to get up and do it again tomorrow.
This is why tomatoes cost what they do—every person who handled them, from starting seeds to planting to staking to harvesting to bringing them to the market, was paid. If you undermine the going rate for tomatoes, you are most likely not charging enough to cover your own time in growing and harvesting.
Who is tracking expenses is a critical question, no matter what kind of farm or business you have. Quickbooks and other software programs help, but someone has to be in charge of this. Often, the person who is good at growing is not necessarily the person who is good at paperwork. Set up a system from the beginning to keep this under control. Knowing costs is essential to knowing if you are making any money.
Who is marketing your product? Do you have a way to get your product in front of the customer? Will you go to a farmers market? If it is a successful, established market, you can take advantage of customers who are already coming to the market. This gives you a way to get your specific products in front of the customers. If you are selling through a food hub or co-op, you have a group of customers already there. If you are starting from the beginning, with a stand along the road, then it can take a while to build a following. An email list, social media postings, and advertising become part of building the business. Who is doing this?
Who is selling the final product? People love being able to talk to the farmer, but that means the farmer isn’t spending that time growing. Growing the product isn’t enough—you have to be able to sell your produce at a price that covers all the costs and generates some profit for the farm.
Microgreens are great for being able to grow a lot of produce in a small space. It only works, though, if you can sell them quickly at a good price, since microgreens have a short shelf life. You have to have your sales lined up.
Sunflowers are great flowers, but you get one stalk per flower. You need enough space to be able to devote to one crop and then sell them at the correct time.
You need to weigh the pros and cons of each crop and see how it works for you. Do you have the right sales venue? Do you have the right growing conditions?
Every farm is different. Each farm has its own microclimate, making it suitable for specific crops or animals. How and what you grow, and how and what you sell, will make your farm a unique entity.
I believe that small farms can be profitable and that you can make a good living from a small farm. I love being able to walk to work and to enjoy fresh fruits and vegetables every day.
You have read this far, so I know you are doing your research. Read about other farms, follow other farms, learn what they have done and what they would do differently. Particularly pay attention to the farmers who are actually farming. Here are some suggested books, but keep on looking at everything that you can.
These are just a few ideas to help you keep your farm business healthy and growing well. These are strategies which we use here at Highland Orchards. My family has been farming here for 190 years, and we have lots of tricks that we have learned over the years.
If this has been helpful, check out our courses. Growing something in the garden is good for you! We share how we grow on the farm in these courses.
Happy growing and happy eating!