Guide to Starting a Farm
Step 1: Decide to Put in The Work
No matter how much technology you plan to use, farming still requires a lot of time and perserverance to be successful. There is no “easy” farming business!
Today’s Farmers are:
· Driven to reach a goal.
· Always humble enough to know there’s always more to learn.
· Not willing to give up when things don’t go their way the first time.
Step 2: Set Goals & Draft a Plan
*Initial Planning: It’s time to set some goals and draft your business plan!
One of the biggest mistakes would-be entrepreneurs make is procrastinating on their business plan. Another important role of the business plan is to aid in securing funding; many banks and other lenders won’t even consider applicants that don’t have a business plan.
*Conducting a Feasibility Study: The feasibility study is the group of research and estimations that answer the question, “Can I make money with my farm?” It covers…
· Revenue projections
· Fixed and variable costs
· A market survey
· A conservative pricing strategy
· A capital expense budget
· A look at your energy costs
· Detailed pro forma projections covering cash flow, net income and balance statements
Step 3: Learn to Grow
Even though we’ve focused a lot so far on the business side of things, it’s critical aspiring farmers start a pilot system as early as possible to learn the in’s and out’s of soil-less growing. This is where you’ll learn all about growing healthy plants and work through some beginner system mistakes before you have any customers.
We highly recommend, to anyone starting a modern farm, to contact us. As we have a lot of experts that would assist farm startups in all aspects of their operations- getting raw materials, pre-harvesting and post-harvesting, including the business aspect of operation. As you learn more about different growing techniques and crop management, you’ll start to form preferences for your farm.
*The Importance of a Pilot System
To amplify and accelerate your grower’s education, start a test farm. You can take all the courses and read all the blog posts you want, but if you’re not applying what you learn, it’s not sticking like it could.
A “pilot system” is a smaller version of your future farm that allows you to test the waters, make mistakes, and start developing processes and best practices that allow you to scale seamlessly into your full production farm.
The other BIG benefit of starting a pilot system is you can use it to grow sample crops for approaching customers and proving demand. Having real produce in hand when talking to chefs and produce managers has helped many of today’s top farmers close their biggest deals. Prospective customers fall for the flavor and freshness instantly!
Step 4: Find Your Customers
Market Research & Sales Planning. You can have the freshest, most flavorful crops in your city or town, but if you don’t have customers to buy them, you might as well close up shop. market research is where you define profitability.
You’re going to complete two types of market research: General research and local research
The most important part of local market research is getting face-time with potential clients. This is the only way to get truly accurate local sales and pricing data.
How to put local market research to use
The most immediate thing that market research allows you to do is find an entry point.
A key part of your entry point will be deciding on a sales model. Simply put, a sales model is the set of processes and tools that you use to get produce from your farm into the hands of the consumer.
Review your sales model, target markets, and everything you’ve learned about your growing technique and crops so far. As you do that, you’ll notice certain strengths and values that give you an advantage over the other producers active in your market.
These strengths are your value propositions- the reason that people buy your produce over others. You’re going to want to play them up in your marketing.
Step 5: Funding
When you’re ready to start looking at funding, you have several options:
· Private investment/venture capital
· Equipment leasing