How to Plan a Farm Business

Farming is a tough business in any economy.

Farming is one of the toughest jobs one can do. Small farmers in particular can struggle to compete against the large agribusiness corporations that own large tracts of farmland in many parts of the country. If you want to operate your own farm, it will take extensive planning for the farm to succeed.

Instructions

1. Decide what your farm's mission will be. You have several choices to make: crops or livestock (or both), organic or treated and how much manpower you can hire. Choose a product that's right for your climate; orange trees are not a wise crop for Idaho, for example. And make sure you can physically do all the daily work required of a farmer.

2. Devise concrete goals for the short term and long term. These should be hard goals that you can plan for and meet, such as "increase revenue by 10 percent each year for the first five years." Set realistic goals you know you can meet, and don't waver on them.

3. Understand the external variables affecting your farm. This includes not only market price and local geography, but also loan interest rates, new technology, government policies (both federal and regional) and basic supply and demand trends between producer and consumer. Understanding how your farm is connected to the rest of the economy will help you make decisions that increase your chances for success.

4. Compare your farm's strengths and weaknesses to the farmland of your competitors. What kinds of topsoil does your farm have? How might that benefit you? What technology is out there that you can and cannot afford? What are your employees' skills and areas of expertise? Farms are not isolated businesses. The work is highly competitive. You must determine what your strengths are and play to them.

5. Come up with alternative ways of generating income in the event that farming doesn't bring in the money you had hoped for. Many small farmers have income from other jobs or work with several different products. If you are a livestock owner, consider growing your own corn or hay for feed. If you are growing crops, grow more than one kind. This will safeguard you against crop-specific pests or fungi and create more stability.

References

• Missouri.edu: AGEBB