Each farm business is different. Before you jump in, take a few minutes to define your goals. This will help you refine your agri-business concept. It is also essential to help you communicate with service providers like the bank and extension.
It is often helpful to think about your goals in terms of the ‘triple bottom line’: people, profit and planet. Think about:
- What are your profit goals? i.e. how much income do you need from the farm?
- What are your goals for enhancing and/or maintaining your quality of life?
- Do you have goals of how your farm will maintain or improve the natural resources and environment?
Specific questions to consider before you start an agri-business include:
- What is your personal goal for your new agricultural business? (I.E. to provide 50% of your income, and contribute positively to my community.)
- How much do you plan to sell (sales volume)?
- How many hours do you plan to work?
- How many people will be working on the farm/ will you have employees?
- How do you plan to measure customer satisfaction?
- What is your profit goal?
Each goal must be stated in a quantitative manner that allows you to track progress. You must be able to measure it.
Objectives are specific strategies for reaching goals. A goal may have several objectives and every objective must be measurable. As you define your business you will want to assign responsibility for each objective to individuals within the business.
Researching your new agricultural business
Before you start researching for your new agricultural business, think about your information sources. There is an immense amount of information out there, and especially when we use the internet, not all information is reliable.
Keeping newly hatched chicks safe from disease that kills them in week one
Primary and secondary information
One important distinction to consider is the difference between primary and secondary information. Primary information is either research you yourself do or research written by the person or entity that did the study.
Publication in a peer-reviewed journal increases the credibility of the information. This means that other experts in that field have examined the research and agree with the methods and conclusions.
Secondary research involves looking at information that has been reviewed and interpreted by another individual. This information is often easier to read and more concise. But, keep in mind, the person who read the original research may interpret the research according to their biases.
Marketing strategies
Doing your own research is often necessary. When you are starting out, it is often best to limit the depth of research that you do. Try to focus on who your customers might be, how much you think you can produce, how much you think you can sell, and what is the revenue potential.
Case studies can be a great way to get ideas about potential marketing strategies. Remember to evaluate whether the strategy that works in the case study fits your goals, comfort with risk, personal and family constraints.
Laws and regulations for your product or service
Often a good place to start your legal/regulatory search is your local county office. Give them a call and see what rules apply to your area or the product that you hope to purvey. Talking to neighboring farmers can also be very helpful. They may already have dealt with your local inspectors and know what issues may come up later.
Amount of work to produce a product
Check out production guides for agronomic, fruit, berry and vegetable crops provide a comprehensive resource describing the soil management, seeding, irrigation and pest management requirements of individual crops.
Even if you plan to use organic practices, these guides are very helpful to give you a basic overview of what you may encounter.
Experience is the best teacher. Working or volunteering on another farm is still, by far, the best way to learn what is required to raise a crop and livestock.
Cost to raise or produce a product
In order to compare the cost of production for a number of possible enterprises, it is useful to complete an enterprise budget. These will determine what type of financing you will acquire for your agri-business idea.
