There is no easy, one-size-fits all answer to this question. You might think that small farmers are a thing of the past, but many new small farm businesses make a start in today’s world. Some of them succeed, while others struggle.
I recently read a heartbreaking account of a family faced with the decision to sell their small farm and move to the suburbs. The husband needed to go back to a full time job to support their family because they couldn’t survive on the profit from raising all natural pork and poultry for market.
This is not an unusual story, in fact it takes places all too often. We hear the call to ‘buy local’ and ‘support your farmer’ from all over the media. Good news about new farmers markets starting up with gaggles of shoppers attending have given hope to small producers. Many people would like to return to a simple farm life with a fair price paid for the milk, eggs, meat, and produce they can raise in accordance with nature. Good food from small farms, raised by honest, hardworking people…what could go wrong?
What could go wrong? Big agriculture, farm subsidies, and the ‘low price leaders’ of our day make it difficult for small farmers to compete. Because a chunk of our tax money goes to fund big agriculture, rather than small farmers, they are able to raise food at a much lower price than the 10 acre farm. In addition, many small farmers are so busy with day to day operations that they don’t have enough time to form detailed plans, do cost analysis calculations, and create solid marketing plans. You need to be part business person and part farmer to make a living in this field.
However, it is possible to make a living with a small farm operation, but it’s not an easy life. There are a myriad of things to take into consideration before embarking on this back to the basics lifestyle. If you are considering the possibility of quitting your day job to start a small, independent farm, here are some things to do before you make the jump.
Do Your Research
Before you take out a mortgage for a property, put your life savings into improving your current farm, or quit your day job, you need to research your market, expenses, and the regulations in your area. When you are investing your time and money into any kind of business, it is paramount that you get these details first.
Look into the local and state laws pertaining to your farming venture. Is the sale of raw milk legal? What regulations dictate the storage of farm fresh eggs? Can you sell meat at a farmers’ market? What are the property codes for the land where you intend to farm? Do you need a license or certification to carry out your business? If you intend to allow the public to visit your farm, do you need to have rest rooms and handicap accessible facilities? Are there regulations dictating the distance between animal pens and public facilities? You’d be surprised at some of the laws that health departments enforce, so be sure that you can do what you want to do…before you start doing it. Start by calling your local Health Department for a copy of the rules and regulations for your area. You should also call the Extension Office or Farm Bureau in your area and make an appointment with a staff member knowledgeable in these matters. If they don’t have the answers you need, they will likely be able to point you in the right direction. You should also have a copy of the local property codes on hand and read through them before you get too far into the planning stage of your business.
Make a Plan
Having a note on the refrigerator to remind you of your business goals is a nice start, but you need something more before you take the plunge. Sit down and write a Business Plan, complete with Mission Statement, Short Term Goals, Long Term Goals, Start Up Costs, and Expected Outcomes. Be realistic as you hash these out. Don’t list arbitrary goals such as “Make $10,000 in first year.” For each goal you set, work out the steps necessary to reach that goal.
There are resources online to help you determine your business goals. Find the closest Small Business Development Center and make an appointment to discuss your plans with them. They will give you a packet of information to get you started. You can call them for follow up questions when needed.
Location and Clientele
Before you buy, make sure you’ll have a customer base to buy your products. This seems like common sense, but it’s easy to get caught up in the mentality that ‘If I build it, they will come.’ Look carefully at the customer base in the area and determine if the income levels and public interests will support your venture. For example, if your future farm is going to provide organic meat and poultry, but the biggest employer in the area is a ‘Wally World’ store, you will have a serious disconnect between supply and demand. Like it or not, small farm products will cost more than similar products in the grocery store. You will need customers who are looking for a superior product and are willing to pay the extra. If you don’t have the right customer base within a short commute, you may have to rethink your plan. Can you raise a product that will ship long distances? Can you sell products online? Or is your product perishable? Making a 2 hour drive to a major city will cut into profits considerably.
Do a survey of the area to see where your products will sell. Visit the farmers markets and watch to see what people buy. Are they dedicated to local produce or are they going for the lowest prices? Are there small grocers with a thriving business? Talk to them to determine if they are interested in the products you want to sell. If you find that the products you wish to raise are unlikely to sell well in the area, you need to go back to the drawing board.
Perhaps the area you’re considering has tourist traffic during the summer. Can you capitalize on this customer base? Remember that these customers may only purchase from you once, and only during the tourist season. Will the sales from the busy season offset the slow months?
Small farm (or farm related) attractions that may be profitable in tourist areas include:
- Pumpkin patches and corn mazes (if tourists visit in autumn)
- Orchards and pick your own patches (plus picked and ready to use)
- Cider, donuts, fudge, and ice cream stands
- Fresh flower bouquets
- Wine, craft beers, or homemade ginger ale and root beer (not necessarily a farm business, but you could raise the ingredients and contract to have the final product made)
- Straw bales, corn stalks, and other decor items
- Bird houses, lawn ornaments and furniture, or other handmade products
- Jams, jellies, preserves, relishes, pumpkin butter (check into health department rules…do you need a certified kitchen?)
- Eggs, milk, cream, meat (sausages and brats might do well in a tourist area – again, check into regulations)
- Country Store or General Store – you could sell a combination of your own goods and other locally produced crafts and products.
- Petting Zoo and picnic area
The possibilities are limited by your imagination, budget, and what the customers want. Look around to see what other local businesses provide and see if there is a niche that hasn’t been covered. Take a careful look at your location. Is it highly visible? Do tourists drive right past the farm? Or are you off the beaten path? If so, you may need to put up signs, send out brochures, put your name and location on every place mat and tourist sign in the area to get the customers to come to you.
*Note: Remember that having a large indoor area can be pricey to build and maintain, but if the weather is bad, an outdoor only business will suffer. Having a covered picnic area, indoor market, or other protected space may be your only salvation in a wet, rainy season.
Start Up Costs
If you are starting from scratch, there may be a large start up investment needed. The costs involved will depend on your business plan, what is in place already, and what you need to purchase to make it all happen. For new farmers in the market for a rural property, there will likely be a mortgage to take out, insurance costs, barns to build or remodel, equipment to purchase, feed for the animals that you need to raise or buy in.
Make a list of all expected expenditures, and then add a cushion to that amount. Everything costs more than we think it will! Be realistic and look at cost of materials in the hardware and feed store. Look up the cost of seed online or through the local dealer. Add on extra because prices seem to always go up, never down. So by the time you get the plans in motion, you may be looking at a hefty increase in your investment.
It is advisable to look into the loans and grants available to small businesses in your area. Check for state and federal programs to see if there is start up money or grants for new equipment available to help fund your project.
Setting Your Plans in Motion
Once you have determined that your plans are feasible, you’ll be chomping at the bit to get started. Look into the possibility of keeping one salary from outside work coming in to help cover your expenses until your farm business takes off. If this isn’t possible, due to the location of your farm or the work load needed to get the project up and running, consider taking some part time work or working online to keep a steady cash flow. If you are hoping to make money blogging about your project, start ahead of time and build up your readership. Having some advertising on your blog will help bring some money in too. And don’t forget the promotional power of a website that is updated regularly to keep potential customers interested in your project.
If one person continues working while the rest of the family works on the farm, it will give you a chance to start out more slowly and build your customer base, learn the ropes, and decide if you have made the right decision to switch to a farm based income. Jumping in head first can be exhilarating and could very well pay off, but it will also leave you without a steady income until your farm is producing a return on your investment.
You know the old saying “Don’t put all your eggs in one basket”…I can’t think of better advice for a small farmers just getting into business. Plan to have more than one product to sell, just in case the first one fails or doesn’t sell as well as you hope. Let’s say your plan is to raise grass fed beef. If you purchase a herd of breeding stock you will have to wait two to three years before you can sell any beef. While you’re waiting for that first batch of steers to reach market weight, there should be another source of income to rely on. The same goes for pick your own berries, orchards, and other long term projects.
Some ideas for products you can sell to help supplement your income include:
- Grain and straw
- Handmade products (health & beauty, crafts, baked goods, etc.)
- Services (can you mow lawns, plant flowers, clean house, or otherwise supplement your income?)
Having additional products and services will also help protect you from a catastrophic failure due to flood, fire, or drought. Plan for the worst and hope for the best is a good motto to live by when you farm for a living.
They say you have to spend money to make money, but sometimes you should be stashing your cash for a rainy day. The small farmer who watches the outgoing funds as well as the incoming will be better prepared for tough times.
Can you raise your own grain, do your own repairs and maintenance, grow and preserve your own food, butcher your own meat, learn some veterinary skills, and scrimp to keep your hard earned dollars in your own pocket? The farmer who buys all the hay, straw, and grain necessary to feed the livestock will have a lower profit margin than those who have the land and equipment to raise their own.
Always keep a cushion in the bank account. If you get down to the bottom of your savings, you may need to go back to an outside income. Keep the option open and watch to see if there are job openings near by.
Build a Network
You can’t always go it alone in this world. Join the Chamber of Commerce and Tourism Board. Get to know your neighbors, community, churches, local politicians and leaders. Having friends in a multitude of clubs and organizations could be your ticket to improved sales. If you sell flowers, get to know the folks from your local flower arranging club. Selling beef? Make friends with local chefs. Brush up on your public speaking skills and give talks to groups that might be interested in what you do. Are there cooking clubs where you can arrange to speak about the benefits of a local food system? Maybe the opportunities will be a bit harder to find, but if you look hard enough you just might find a great new customer base to buy your products.
Promote your business with interviews on radio, TV, newspapers, and local events. Send out press releases when you have a grand opening, or start selling a new product. You can start a website for free or a small fee if you are able to do the work yourself. Set up a mailing list or an email list for newsletters and promotions. Let people know what you are doing and why. And don’t forget to give something in return. Have giveaways or parties to celebrate milestones or a great year of sales. And don’t overwhelm people…they need to know you as a person, not just as a promoter of your business.
Keep America Strong with Small Farms
Our country was built on the small farm and we need them to keep in touch with our roots and our food. Without small farms, we have fewer choices in the products we purchase. Not everyone can produce their own food. But you also need to keep in mind that small farms will have to charge a premium for their products. It is paramount that you determine if your market will support those costs before you start. Otherwise, you will be better off working a regular job and living somewhere that chickens and gardens are allowed. There’s something wonderful about growing your own food for the dinner table and maybe that in itself is enough to keep you happy.