The 2012 U.S. Census of Agriculture recorded an increase, for only the second time in the past 100 years, in the number of farmers under the age of 35. A 2017 National Young Farmers Coalition survey found that a majority of young farmers are college educated. Many are first-generation farmers, as three-quarters of survey respondents did not grow up on a farm.
What advice would you give to this growing group of well-educated yet relatively inexperienced women and men looking to forge their own pathways into farming? Here are my top five essentials for beginning farmers, and they are also good reminders for more experienced agricultural entrepreneurs.
1. Get clear on your goals and abilities.
Why do you want to farm? Are there other ways that you could achieve your goals with less risk or less effort?
If you aspire to work outdoors with plants, animals or machinery, why not get a job with an existing agricultural business? If you dream about the self-sufficiency of growing your own food and pursuing a rural lifestyle, perhaps approaching farming as hobby would be appropriate.
Can you identify a burning consumer need that your farm business is uniquely suited to fulfill? Congratulations, now you’re thinking like an entrepreneur! As you develop your Big Idea, take time to create and practice an “elevator pitch” so you can explain your farm business concept in less than 60 seconds to someone who knows next to nothing about agriculture.
Before you dive into farming, reflect on what competencies you are lacking, and on how you will address those deficiencies. Working for a successful farm operation (or several) can be a wonderful way to build skills and experience, and give you a head start in your own business development.
2. Develop a business model.
Once you have developed a Big Idea, you need to analyze it from all possible angles. If you will be selling any agricultural products at all – even if you plan to start at a tiny scale – you need to consider and plan for all the various functions of a business. The three primary functions you need to address are operations, marketing, and finance. Writing down your plan for each of these areas will help you to think critically and identify weaknesses.
Write a farm operations plan. This plan should describe your production system, including all inputs, outputs, and processes for transforming inputs into outputs. Identify your primary input suppliers to demonstrate that a supply chain exists to support your production system. Consider transportation and storage needs. Educate yourself about local, state, and federal regulations that may affect your business, and discuss what steps you will take to comply.
Write a marketing plan. Describe your target market and their critical need that your business is uniquely positioned to meet. This section should explain how you will approach the 4 P’s of marketing – product design, placement, pricing, and promotion – to reach your specific target market. This applies regardless of whether you are selling your product to the end consumer, or to a wholesaler or other intermediary buyer.
Write a financial plan. What is the projected scale of your business in 3, 5 or 10 years? Will the business be profitable at that scale? How long will it take make a profit, and how will you fund the startup phase? How much will you, the owner, take out of the business to support your cost of living?
3. Keep business and personal finances separate.
Before you spend a penny on the farm business, open a new checking account for all of your farm transactions. To open a business checking account, you will first need to visit the county clerk’s office and file a DBA form to register your business name. Having separate personal and business checking accounts will make it easier to distinguish between farm and non-farm expenses, which is critical for accurate record keeping.
4. Dream big, but also manage risk and plan for failure.
Farming is an incredibly risky venture, and it takes a colossal investment of time and money to get started. Minimize your financial risk as much as possible by financing the business from savings or business earnings, rather than debt. Grow slowly. Live frugally. Be prepared to keep an off-farm job for years until the business is large enough and stable enough to support you.
Consider starting your business on rented land. Renting is almost always cheaper and less risky than buying. Plus, you can gain experience to know exactly what you will need if you decide to buy land in the future. Develop a sound lease agreement to protect your access to rented land and any investments you make in a rented property.
Have an exit plan from the very beginning. What happens if the business doesn’t work out, or if you decide to downgrade it to hobby status? What happens if you have an unexpected medical emergency? How quickly can you liquidate your farm business assets, and how much are they worth? Having a plan for your worst case scenario can help to take some of the pressure off, and reduce the stresses of navigating the startup stage.
5. Relationships are key.
Connect with other farmers, extension agents, and agricultural service providers in your community. Building relationships with other producers, especially older generations, can be incredibly valuable and satisfying for all parties.
Ask other farmers lots of questions, not just about production, but especially about finances. Be generous in supporting other farm businesses in your community. Establishing strong ties with the agricultural community will give you access to resources for support and information. A solid social network can help you make better decisions and grow your farm business faster.
Resources
If farming sounds like the right direction for you, check out the Cornell Small Farms Program. Their website offers a variety of technical resources on topics ranging from establishing your production system, to navigating regulations, to farm business planning.
The National Young Farmers Coalition also provides a variety of resources for new and aspiring farmers, including strategies for overcoming barriers to land access.