7 Questions to Ask Yourself Before Launching Your Own Farm Business

by: Sara on 10/11/2016

You know being a farmer will be hard work but the draw of the land, working outside and the desire to make a difference in the way we eat and farm is calling to you...but then there is the accounting and bookkeeping and applying for loans! Never fear, The Farmer's Office is here! In today's blog post Julia Shanks, the author of The Farmer's Office: Tools, Tips and Template to Successfully Manage a Growing Farm Business ays out seven questions you should ask yourself before digging in.

The overarching question is: Do you believe you have all the skills, energy, money, people and knowledge to start a business? The following questions are not meant to deter you, rather to ensure that you go into this with your eyes wide open to the realities of entrepreneurship.
Skills and Knowledge

1.    How much experience do you have farming? Can you make a crop plan? Do you know what types of soil you need for the crops you want to grow?

If you don’t, consider getting an apprenticeship.

2.    How strong are your business skills? Can you manage people and money? Do you like working with people and selling?

You may have gained experience managing someone else’s business and feel confident in your managerial skills.  If not, consider taking a business class or even getting a manager’s job at another farm.

3.    If you don’t have all the skills you need, what resources can you access to round out the business? Do you need a business partner who understands the business side of the operation while you focus on the farming?
Even if you have experience managing a business, no one has all the time. Some people get lucky, but most need to marshal outside resources. Can you connect with your local agriculture agency?  Do you have an accountant to help with bookkeeping and taxes? What other resources can you tap? 

4.    What’s your shit tolerance?
As they say, “Everything sucks some of the time.”  This couldn’t be more true for farming and entrepreneurship. Can you stand doing things you don’t like for 50% of your day?

5.    Are you willing to work as many as 90 hours a week?
Unlike many industries, there’s immediacy to farming. The irrigation needs to be set up today; it can’t wait until tomorrow or your crops will wilt. The cucumbers need to be harvested today, or they will be too big and bitter. The chickens need to be fed today; they can’t wait until the weekend, when you’re catching up on chores.

On top of that, all sorts of unexpected things will not go according to plan. I can’t tell you what they will be, but I can assure you it will happen. All your plans for an organized day, with a balance of work and life, will seem like fantasyland after a few months of running your own businesses.

All of this adds up to many more hours a week of working than you anticipate, especially in the first years of business while you’re getting your systems in place. To be sure, you will not work at this pace 52 weeks a year, but it can be the norm and not the exception.

How hard are you willing to work?

6.    Can you afford to not earn money for the first 6 to 12 months of business?
As the owner of a business, you are the last person paid. Your vendors, suppliers and employees need to be paid before you can take a draw. During the lean times, you may not be able to pay yourself at all.
Do you have enough savings? Do you have a spouse who can support you? To that end, if you’re applying for a loan, the bankers will want to know that you are not putting yourself in financial jeopardy in taking the loan. If you get evicted from your apartment because you’ve fallen behind on rent, then there’s an increased chance that you will fall behind on your loan payments, too.

In general terms, it’s always a good idea to have 6 to 8 months of savings in case you lose a job. The same is true for starting your own business. Make sure you have enough savings to carry you through the lean times. Chances are you won’t have the time during the growing season for a second job if you’re short on cash.

7.    What is your tolerance for risk and uncertainty?
In addition to bolstering your savings to support yourself during the start-up phase, you will need cash to launch your business whether it’s to purchase land, equipment or a greenhouse. You can draw on your savings or borrow. If you use your own money, are you okay losing everything you put into the businesses? Are you comfortable borrowing money? And are you willing to put your credit at risk if things don’t work out?

They say, entrepreneurs would rather work 80 hours a week for themselves, than 40 hours for someone else. They know their strengths, recognize their weaknesses, and know when to ask for help. They tolerate risk and uncertainty, and take chances.  Not everyone is cut from the entrepreneurial cloth, and that’s okay.  But better to be honest with yourself before taking the plunge. You’ll be more successful for it!
And when you’re ready to launch your business, get your plan on paper and your team in place.  And if you need extra help, check out The Farmer’s Office.


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