Anybody ever written a business plan for a farm?

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SagerXX's picture
SagerXX
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Anybody ever written a business plan for a farm?

Hey gang --

Has anybody out there written a business plan for a farm (or ag-related business)?  My buddy D and I have a potential benefactor and without going into too much detail I will be shortly writing a biz plan.  Any pointers, clues and so forth (incl. general business plan expertise) would be deeply appreciated.

Viva -- Sager

Travlin's picture
Travlin
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Project a profit

Sager

The most important thing is to project a profit.  It helps if your projection has some relation to reality. Cool  Good luck.

Travlin

EndGamePlayer's picture
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Plan A

Hi Sager-

We wrote one but not for a bank loan but rather to work out the farm plan. Here's a short of it:

First year:

  • Plant strawberries (I had been growing them for years so started with my own stock). The first year they need to multiply. Inputs include free manure from the neighbor, rock dust and green sand for fertilizer and as much ash as I could get my hands on) and plastic to cover it all. There was old hay on the property so we eventually coveered the plastic with the hay.  We planted every foot. If you can find them - drip lines or old hoses would have been put under the plastic for watering (wishing we would have done that!). I had both everbearing and June bearing . . . 8 rows x 100' of June berries and one of Everbearing. Let these plants take over 2' out from the center plastic area.
  • Start animal stock (chickens came first and so did planting theirwinter food). Note that a lot of people will start out with chickens because you can pay $2 a bird, raise them on pasture and sell for $20 (See Freedom Ranger birds) or Cornish Cross. You will pay for processing but your market plan to sell them must be in place! Some say you can raise $20K of birds on 5 acres but I didn't see it.  And, if you have Amish near you, many will process the birds for you for $2 a bird but they like to negotiate. THIS IS THE FIRST MONEY-MAKER SO MARKET THE CRAP OUT OF IT AND IF YOU HAVE TO SELL CHEAPER THE FIRST YEAR - Go for It.
  • We also started our veggie gardens with rhubarb, asperagus and some starter trees.

Second year -If you made the money the first year - get a nice tractor (deisel if you think you can supply bio-fuel or whatever you determine works and you have land for growing fuel):

  • Selll berries (if you managed to plant an acre, you should see between $5 - $50K) on the production. Some say they can make $250K on an acre but don't plan on it.  Don't bother weeding as in 2 years you will be tilling along the outside rows. If you can't sell - process into jams, sauces and charge more. This should make some money every year now. Market it in papers, craigslist and road signs.
  • More chickens if you sold the other ones, otherwise join the farmer's market to sell remaining freezer birds. We had some we kept over winter and they supplied us with eggs (not Cornish X or Freedom Rangers.) This should make some money every year now. Market it in papers, craigslist and road signs.
  • Expand variety of fruits and veggies (for self first, then excess is sold). Propogate from stock of vines (grapes, kiwi), canes and trees.

Third year:

  • Install power systems (wind, solar and for us - hydro power) We also planted our sugar beets for alcohol. By now you'll know the land and what kind of power you can get from it. Do not try to put in a system until you have explored all options. If you have the resources (running water or in a constant wind area- put as much as you can or add-to this every year). My person thought - in the future Food and Energy are gold make as much as you can of these.
  • Keep doing more of what made money in previous years. We also expanded our personal livestock to include goats (milk, meat and keep down the back acres), sheep for milk (still improving the herd) and what you now think you have the ability to manage (you might be ready to manage a dairy cow after a couple years with goats, haying which you can buy or do yourself if you have the land...some people hay roadsides around here --free land!)  You might want hogs or go exotic - deer, buffalo, elk . . emu, to name a few.
  • Till the outside of 2 rows of berries a year (add inputs!!) and weed wack down the center pants to refreshen them. You'll do this to a few rows every year.

It didn't go as perfect as planned. We didn't count on all the weeding in the row crops so we ended up with too much on that time spent. Some of our animals died the first year because our "kind" neighbor gave us fescue and it killed (starved) some of the animals over winter (live and learn).  He took the hay from our field and gave us crap he had stored back. We make our own hay now and give our animals kelp to ensure best health.

We got lucky as 7 years ago we found an electric tractor and now you can't buy one to save your life. We also bought a Farmall H for doing haying and plowing over winter. We also lucked out in that we bought a "gone wild" farm that has a 1/4 mile creek running through. Just after buying it a neighor came over and offered to "take the wild creek off our hands" for a fraction of what we paid for it. The neighbors must have thought we were crazy to buy such a rough wild, over grown place! Last I talked with my manure supplier, he realized that wild-ness creek is going to come in really handy.

So, my advise- if you are looking for land - look at the power it will produce naturally and good soil. You can improve the soil if you have to but you can't make water flow, wind blow or sun shine.

EGP

EndGamePlayer's picture
EndGamePlayer
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ps

don' give up your day job!

Ready's picture
Ready
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Profit

Sager,

I have no idea how to turn a profit at this small ag thing in the conventional sense. On the small scale, it really doesn't seem to work all that well unless you are doing something boutique like purple navel orange blossom honey, organic jackalope kopi luwak, or something like that out of the ordinary for which a small amount of production adds to the value. You have got to be able to charge a huge premium for your product over a commercially available alternative for it to be profitable.

If you try to go up against food inc producing wheat, corn, etc, you are wasting your time. Unless, that wheat is somehow different (at least in the minds) for your consumers. Anything that you will ultimately sell on the commodities market would be something to avoid, IMHO. I have read that farmers have become paperwork submitters first, and tractor drivers second. The govt subsidies and picking one crop over another complicates things to the nth degree for a small ag guy. Without the subsidies, the farmer would loose money growing the crop. That's because the price is artificailly low in the marketplace BECAUSE of the subsidies. It's a maddening circle.

Beekeeping is an example of an ag process that uses very little start up capital in terms of tractors, space, power, water, etc. If you were fortunate enough to have a grove of producing nut trees on the land you own, this might be another option. Not to compete with planter's, but the post-processing of the nuts (custom roasting, make pralines, etc) can make your brand for you. I would look for something like this that allows you to start with minimal infastructure and govt influence, then build on to what you have using profits. Once you have your product picked out, the customer and marketing piece should fall into place, then your biz plan will start to write itself. Just gotta be unique to make money. You are a highly creative guy, you'll come up with something. If you come up with a blank, hit me on the backchannel and I'll share an idea I have been tossing around for a while...

 

And, yes, don't quit your day job.

patrickhenry's picture
patrickhenry
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Business plan for a

Business plan for a farm: 

1) Start with a large pile of money. 

2) Farm until you have a small pile of money. 

:)

Or, check out http://www.acresusa.com/books/thumbnail.asp?catid=13&pcid=2

 

SagerXX's picture
SagerXX
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Excellent!

Thanks for all the various advice, folks!

FWIW, the person financing the farm biz has deep pockets and land in hand (~20 acres).  While there are short-term options on what to grow and where to distribute (there's a group that is trying to get a local-farm-food-to-local-schools program going) in the longer-term the farm will make produce and livestock for a restaurant/market on-site (which obviates the need for a distribution network).  There's probably also a program to put together along the lines of "Pickling Food:  come pick produce and then we'll teach you how to make pickles, sauerkraut, kimchee, etc." which not only provides a market for the produce but starts to create people who know how to store fresh food.  

The big hurdle is getting everything ready before next Spring so we can plant:  biz plan, permits, fencing, and so forth.  I'm gonna be a busy fellow...

Again -- thanks!  And if anybody else out there has info/ideas, I'm all ears/eyeballs!

Viva -- Sager

Poet's picture
Poet
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Sounds Like A Great Opportunity

It depends on how intensive in terms of maintenance you are going to get. If you want low intensity, then I'd suggest hardy fruit and nut trees, an automated drip irrigation, as well as stands of trees for coppicing. Maybe even stock a fish pond.

Higher maintenance and learning curve, then more intensive vegetables and livestock would be a consideration.

This looks like a non-scammy site about Farm Business Planning, with lots of links:
http://www.beginningfarmers.org/farm-business-planning/

Lastly, don't forget the llamas and alpacas!
http://www.vbs.tv/watch/the-cute-show/alpacas

Poet

Thomas Hedin's picture
Thomas Hedin
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Sager

You should read "Down On The Farm".  Its written by a real life rancher who ran a 5000 acre ranch.

SagerXX's picture
SagerXX
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Just as a side note

As I work side by side with my buddy D on various outdoor projects (today it was manhandling 200-300 pound rocks hither and yon...leverage is your friend!), and now that the sun is a factor, I'm wearing my old biz attire button-down cotton shirts that once adorned my frame back in the corporate world. They block the sun and cover the arms, and they breathe and hold sweat to cool me in the breeze. They are also a bit of defense against poison ivy. I should call Ralph Lauren and tell him what I'm doing with his business shirts. [smile].

12bones's picture
12bones
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farm business plan

Sager,

If you want to do the pastured chicken there is a great book with the metrics of the chicken business by Joel Salatin.  Just last week Polyface Farm held a Field day it was amazing whatch this blog more info will come out on some of the techniques. Polyface had a very good sense of marketing and thy have helped many of us in the area learn the right way.We have started raising quail this year for a local resturant and we underestimated the market totally, several other chefs heard about it and we could have sold many more. Quail are fairly easy to raise take up little space and do not require machinery.

Here is the link you can check out

http://polyfaceyum.blogspot.com/

12 Bones

littleone's picture
littleone
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Joel Salatin

Bones,

I agree, Joel Salatin is a leader in sustainable farming.

Thanks for the link and info.

 

Sager,

I think you will like the documentary FRESH, featuring Joel Salatin.

FRESH shows how to feed animals off the land and keep the land healthy with the animals helping!

Also, shows the so-called productive monoculture methods and how they are actually more costly in terms of time, effort, and horror.

Monocultures are an unnatural separation of people, animals, and land.

It happens one person at a time.

FRESH celebrates the farmers, thinkers and business people across America who are re-inventing our food system. Each has witnessed the rapid transformation of our agriculture into an industrial model, and confronted the consequences: food contamination, environmental pollution, depletion of natural resources, and morbid obesity. Forging healthier, sustainable alternatives, they offer a practical vision for a future of our food and our planet.

Among several main characters, FRESH features urban farmer and activist, Will Allen, the recipient of MacArthur's 2008 Genius Award; sustainable farmer and entrepreneur, Joel Salatin, made famous by Michael Pollan's book, The Omnivore's Dilemma; and supermarket owner, David Ball, challenging our Wal-Mart dominated economy.

Here is part 1:

 

-littleone

SagerXX's picture
SagerXX
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I'm working on the biz plan this afternoon...

...so thanks again for all the ideas above. I also attended yesterday's Northeastern Permaculture Convergence, where I bought Joel Salatin's book "You Can Farm --an Entrepreneur's Guide". I've read a couple of chapters. Looks like it'll help. Thanks again -- and Viva! -- Sager

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ao
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SagerXX's picture
SagerXX
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Posts: 2237

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