Your day begins before the sun has even risen. You don your clothes and rain boots and set out into the crisp morning to feed the chickens and the cattle. It’s a clear morning and you feel good being outside, feeling frost crunch beneath your feet, watching the yard cat stretch and yawn lazily.
Already you’ve got a slew of tasks running through your head. Call the accountant about what to write off this year as a business expense. Check in with the neighbors about using that extra acre of land at the bottom of your property. Make sure to order a few more bags of chicken scratch. Fix the fence. Talk to the farm down the street about how they’re using their hilly, forested land to plan for a future logging operation.
It’s a lot, but it’s exciting that in between all the chores, there are so many opportunities for the future.
In this guide, I’m going to walk you through how to start a farm, as well as give you the resources to help you get started with a farming business today.
To supplement this guide, I interviewed two experienced farm hands: Gregory Heilers, previously an assistant farm manager, and Dr. Cindy Jones, the owner of Colorado Aromatics, a small herb farm in Colorado.
What’s in this guide to starting a small farm?
- The state of small farm business in the U.S.A.
- Why do you want to start a small farm?
- What to do if you’ve never farmed before
- Step 1: Identify your niche
- Step 2: Find the land
- Step 3: Get financed
- Step 4: Planning a farm for success
- Step 5: Marketing your farm and products
- Resources for future farm business owners
The state of small farm business in the U.S.A.:
In the U.S., small farms are considered the backbone of the agricultural industry, with 97 percent of all U.S. farms being family-owned.
In order to be considered a small farm, the USDA Economic Research Service states that you need to gross less than $350,000 per year.
There are almost two million small farms in the U.S., a data set that includes retirement farms, off-farm occupation farms, and farm-occupation farms. You can learn more about the small farm classification system from the USDA’s website, but so long as you’re within the $0-$350,000 bracket, you can guarantee your operation will be classified as a small farm business.
Why do you want to start a small farming business?
Gregory Heilers has helped on two startup farms: his father’s 200-acre grass-fed beef and goat farm, which also includes an orchard, a berry patch, and a vegetable garden, with areas set aside for future logging; and on a seven-acre organically grown market garden in upstate New York.
Gregory believes that if you want to be successful, you should think about why you want to start your own farm before anything else. He says, ask yourself, “Is it for profit? A hobby? An altruistic contribution to society and/or animal welfare? Environmental stewardship?”
This is because your motivation for starting a farming business is the thing that will directly impact your strategy.
You will need to answer these questions, and questions like them as honestly as possible so that you know what direction to go in. You may find that what you’re really hoping to start is a hobby farm that you can run as a side-business. If this is the case, beware that the tax implications for hobby farms are quite different that for business farms.
If you want to know whether or not you have what it takes to be a farmer, give this quiz a try. It was created by Taylor Reid, the founder of Beginning Farmers.
Where to start if you’ve never farmed before:
If you didn’t grow up on a farm and haven’t worked on one, you may be wondering how on earth you’re going to make your dream a reality. This is a very real concern. The reality may prompt you to consider another line of work because farming is hard, and farming as a business is doubly so!
Get some real-world experience
For many modern-day farmers, especially those running large commercial farms in the Midwest, skills have been passed from generation to generation.
This isn’t the same for small startup farms. These farmers have had to acquire their skills in order to learn how to start farming, and they’ve either done so by apprenticing with other farmers, going to farm school, or doing some intense self-directed study (see the resources section at the end of this article).
According to Gregory Heilers, it’s essential to get that hands-on training. “While some claim you can learn how to be a farmer through YouTube videos or books (and those can be excellent tools), it’s very important to get some hands-on training. If you haven’t grown up around farms, you’ll want to buddy up to someone who knows what they are doing.”
Gregory Heilers on one of the farm’s tractors.
Agricultural jobs are among the most dangerous in the world, so it’s no surprise that Gregory makes such a strong recommendation to learn from people who can teach you what you need to know, and share stories from their past, to bring the sometimes surprising dangers of working on a farm to life.
Gregory says, “Farm work can be extremely dangerous, so it would be great to hear some scary stories from an old timer (or, at least, someone who’s been around a bit) to let you learn from others’ mistakes and knock some sense into you before you find yourself in a potentially fatal situation.” If you need a very real scare to bring you to your senses, read this chilling article from Modern Farmer.
Aside from the dangers, there is a lot to learn about how to start a farm and how to start farming, not the least of which is how to balance the books and come out ahead! Of course, as with any profession, be careful who you choose as your mentor as there are both competent and incompetent farmers. Use the list of resources at the end of this article to help you find ways to get experience before you start your own venture.
If you are willing to put in the time, and learn the necessary farming and business skills to become the profitable small business farmer you know you could be, there’s good news. It’s doable!
Learn to farm as you go
Dr. Cindy Jones is a trained biochemist and herbalist. About eight years ago, she and her husband decided to start a small herb farm in their home state of Colorado.
Although Cindy had never farmed before, she had been an active gardener, growing the herbs she needed for her skin care product business, in her own large garden.
Starting a small herb farm seemed like a natural next step, even without any of the farming experience. “We came into farming with no background other than gardening and learned that farming is much different. We have learned a lot just from doing, networking, and talking to other farmers. We do a farmers market each Saturday during the summer so have met other farmers that way,” Cindy says.
Cindy Jones on the farm, pictured left with calendula, and right with lavender.
There are of course other ways to fast track your learning, and Cindy is no stranger to setting aside reading time in order to better her business. “Recently, there have been a few books published that have been helpful, both ‘Woman Powered Farm‘ by Audrey Levatino and ‘The Organic Medicinal Herb Farmer‘ by Jeff Carpenter and Melanie Carpenter.”
Of course, not everything—including learning how to start a farm—can be learned from a book. Building good relationships and networking also go a long way to helping you pick up relevant skills, especially in the early days.
“Much of what I have learned has been from fellow lavender growers who are quick to share what works and doesn’t work for them. The United States Lavender Growers Association was founded specifically to help growers. I am one of the founding members of this group and we have many opportunities for sharing and learning through USLGA. Each year we extend our growing area slightly and each year we learn more about what we are doing. Someday we’ll get it right!” With a thriving business that relies on the farm’s produce, there’s no doubt Cindy’s already done just that.
Decide whether you’re starting a business or a hobby farm
If DIYing your farm learning experience is something you’re more interested in, hobby farming could be a better fit for you, and there’s nothing wrong with that. Hobby farming gives you the opportunity to experiment on a micro scale first.
For example, before you plant an acre worth of vegetables, plant a much smaller patch, and take the time to address and learn from problems as they arise. After a while, you’ll have developed the skills you need in order to expand. The University of Vermont Extension has a whole lot more to say about hobby farming versus running a farm as a business. If you’re interested in the topic, read their hobby farming business fact sheet.
Step 1: Identify your niche
Even if you know exactly what type of farm you want to start, diving head first into just doing it is never a good idea.
Say you start the passion fruit farm you’ve been dreaming of for years in your home state in Florida. What if, as you’re getting ready to harvest your first batch, you then find out that all the demand for passion fruit is centered in Southern California, and not in Miami like you thought? Even if you do somehow manage to find affordable transport to get your goods to California, what if you then learn that locally-grown passion fruit is all the rage?
Within just one yield, you’re out of business and all because you didn’t know where your target market was located, or what their values were. If you’d taken the time to do your market research, you would have learned there was no demand for passion fruit in Florida. You would then have been able to choose to grow another product that was in demand, or start your farm somewhere else. Either way, you would have saved yourself a lot of trouble.
Don’t skip the market research phase
Learning to do market research is that step you really can’t skip, because while it certainly helps if you know what you want to grow, you’re still going to need to know who is going to buy your products, where you’re going to sell them, and how you’re going to do this, all while taking competitors into consideration.
Even if you know nothing about formal market research practices, you can do your own research by getting out to learn more about your customers, distribution channels, and about how to start a farm.
If you are already interested in a particular product, learn more about your local market. Check out farmers’ markets, meet other local producers, speak to customers as you shop. Better yet, survey farmers’ markets to see if any crops or products are under-represented.
Additionally, consult your local extension. Extension services provide localized resources for most aspects of gardening and small farming. For example, Oregon State University Extension has a “Small Farms” portal where you can find out more about crops, grains, soil, livestock, and much more.
The best part of these portals is their local bent. If you’re based in Oregon and want to know more about growing blackberries, you couldn’t find a better resource. Many University extensions also publish reports specific to different farm products. These reports might include estimates for production costs and returns, like this one on the University of Maryland Extension Portal.
As part of the research process, it is also highly recommended that you turn to your local state department of agriculture. Not only will they be able to provide you with the latest information on farming in your state, but they will also be able to help you figure out what licenses you need to register for, and give you local information on food safety, pesticides, market access and much more.
If you still have trouble choosing an enterprise, here’s a guide on how to pick a how to pick a high-value crop, including detailed advice on how to evaluate your resources and personal considerations. If you’re willing to spend a bit of money, the Profitable Plants Digest has some niche-specific guides.
Keep an eye on emerging market trends as well. States that have legalized cannabis and hemp production have shown promise for small farmers in recent years, for example.
If you’d still like to know more about formal market research processes, you can read this complete guide.
Step 2: Find the right land
Once you’ve figured out what you’re going to farm, you’re going to need to decide whether to buy land or lease it.
If you buy land, you’ll have complete control over its use, but you will also assume financial risk for the success of your enterprise. This is one of the major reasons leasing land is a popular option for many new farmers. It minimizes financial risk and requires reduced capital at the outset.
If you’re interested in leasing farmland, consider finding people who own land, but who aren’t doing anything with it. Many landowners with arable land aren’t using it for farming but could benefit from it either in the form of tax credits associated with the agricultural use or in order to raise property value. If this model interests you, read “No-Risk Ranching” by Greg Judy.
If you can’t find anyone to lease your land, there are still a few options open to you, including incubator farming, rooftop farming, and SPIN farming.
Buying your own land
Buying a farm, or farmland, isn’t for everyone learning how to start a farm, but if you feel like it’s the best option for you, there are some handy ways to figure out where to start your search. Ann Larkin Hanse, writing for Mother Earth News, suggests you narrow your search area by considering only those areas that have off-farm employment options (or markets for your farm products and necessary farm support services).
“It’s helpful to get an old-fashioned paper road map and draw two circles: one with the off-farm job in the center and a radius as long as the distance you are willing to commute, the other with your customer base in the middle and a radius as long as the distance you’re willing to travel to market,” says Ann. “Where the circles overlap is where you should look for land.”
Illustration by Elayne Sears, image via Mother Earth News
Things to consider when looking for land
Before you find the right people to help you buy land, it’s worth familiarizing yourself with the things you’ll need to consider as you browse. At the very least this will include:
Your proximity to markets: Consider where you’re going to sell your products, or how you’re going to reach sales channels. If they’re hundreds of miles away, you’re going to struggle much more getting to market. Often it’s easiest to start local and go from there. You will likely already have completed your market research by now and should have a pretty good idea of where your market is located. Use the above diagram to help you determine the “right” area to start your land search.
Access to water: It’s important to make sure you have a steady supply of water, so be sure to ask plenty of questions and consider all of your options. How will you provide water for the plants, animals, and processing needs of your business?
If the land you are purchasing has a well, it is always good to obtain information about the well, such as type, depth, output, and age. You may also want a water quality report.
If the property is connected to a municipal water supply, knowing the price of the service can also help you determine the feasibility of a particular enterprise. If you have to pay per gallon or cubic foot, you might reconsider trout farming and try a camel dairy instead.
Soil quality: As with water, high-quality soil is a must for most farmers. Ask the current owner for soil test results. Soil tests are often available through the local extension service and sellers should expect to provide test results.
Soil testing can be an important predictor of production capacity and expenses. Accurate predictions of fertilizer needs for specific crops can be made based on the test results, which breaks down to an actual dollar value when growing. For livestock, different soil can even impact growth and health, sometimes requiring supplementation.
Facilities and Infrastructure: Depending on the type of farm you want, you may also need different outbuildings. A produce stand or farm shop might require an up-front investment. What about your livestock? Does the land include shelters for the animals you plan to raise? What about processing facilities? Different crops and animal products will require different processing and storage facilities.
Make sure to also think about things that aren’t directly related to the property. What sort of transportation and roads are available to and from the area you’re farming? While you’ll want a balance of easy access and proximity to your sales markets, keep in mind that busy roads can have an impact on livestock, soil, and water quality.
Neighbors: These can be a great resource, or a great hindrance, depending. Do they produce farm goods? What are their production practices? Are they compatible with yours? If you plan on starting an organic vegetable farm, but your neighbors spray their Christmas tree plantation with harsh pesticides and herbicides several times a year, it could dramatically impact your success.
Operating a successful farming operation will happen a lot more easily if you have a good relationship with your neighbors. Farm manager Greg Heilers says, “Meet your neighbors. Offer to help your neighbors. Be a good neighbor. Farming used to be so much more about community. It is so much easier to be successful as a farmer if you have even the slightest bit of support from your community.
“For example, if you’re a beef cattle farmer, when a calf or cow or bull breaks loose and enters a neighbor’s field, do you want them to a.) keep your animal and never come asking to see if you had an animal get loose, b.) sell it off immediately and keep the truth from you, c.) come knocking and ask if you have any cattle or d.) recognize your cattle instantly and drive ’em back to your place for you?”
In this same vein, make sure that any property you are looking at has good fences. Installing your own will likely cost a lot, and if you think you can do without good fences, remember that it may well impact the relationship you have with your neighbors. They say “good fences make good neighbors,” so find a place that has them and you won’t risk upsetting the neighbors if your cattle or goats escape onto their luscious looking bean patch.
You may even be able to cultivate a relationship with your neighbors that goes beyond just agreeing to perimeter fencing. In a best-case scenario, you might find that your farms’ outputs (especially those that are not your primary value-added product, such as manure), can be valuable inputs on your neighbor’s farm, or vice-versa.
Step 3: Getting financed
If—like most small farmers—you haven’t inherited a farm, finding the money to learn how to start a farm, and to turn your dream into a reality is going to be a core part of your go-to-market strategy.
Research your funding options
Cornell University’s guide to planning and funding your farm business is a good place to begin. It will walk you through different financing options, including self-financing options. What it won’t do is recommend you take out a credit card loan. In fact, this guide specifically suggests this is the one thing you don’t do, as you’ll be best served to invest any profits straight back into the farm, and if you don’t pay the loan back fast enough, your interest rate will spiral out of control.
Bplans also offers a comprehensive guide to funding a new business to help you think through your options.
That said, make sure to be realistic when you initially apply for funding. If you can avoid buying expensive equipment at the start, do it. Cindy Jones, the owner of Colorado Aromatics, and a small herb farm in Colorado says, “Starting a small farm is a lot of physical work and there is little equipment available to help growers on a small scale so much of the work is by hand […] We finally invested in a small tractor this year to help with tilling, ditching, and post hole digging, so some of our early plantings of perennials such as lavender are not spaced properly for a tractor.”
Once your business takes off, you can buy the things that will make life easier. And even if you don’t have a lot of cash on hand at this later date, a bank will be more likely to give you a loan if they can see you are running a profitable operation.
Write a business plan
For anyone seeking a loan, writing a business plan is going to be essential. This isn’t any different for an aspiring farm owner. Even if you’re not seeking a loan, a business plan is a useful tool to help you figure out which of your ideas are feasible, and to remind you of your goals. You can find out more about writing a business plan on our Business Planning Guide page. If validating your business ideas interests you more than funding at this stage, you might prefer to opt for a Lean Plan—or a shorter, more nimble planning process.
Look at sample farm and agriculture business plans
Not quite sure how to format your farming business plan? Take a look through our library of free farm-specific sample business plans, including a fruit farm business plan, a botanical perennials business plan, a feed and farm supply plan, a hydroponics business plan, and more!
Obviously, before you sit down to write your business plan, you’ll need to determine your cost of production. You’ll also need to know how much your rent/lease will cost you.
Step 4: Market and sell your products
There are many different ways to market your farm products. While farmers’ markets are probably the most obvious example that comes to mind, there are a number of other channels you can use to market and sell your products.
If you have enough traffic nearby, you might find that a produce stand or farm shop right on your own property is a good option.
Another trending model is to sell your products through a CSA (which simply stands for “Community Support Agriculture”), in which patrons purchase a “share” of the season’s yield for a set price in exchange for regular deliveries of the products as they are ready. This model is especially popular because you receive payment at the beginning of the season, which can help reverse the notorious cash-flow issues faced by most farm businesses.
You could even find a local growers’ cooperative that allows you to team up with other producers to sell your products under a united brand.
Finally, even though the age of the supermarket has made retail sales of farm goods more difficult, there are still plenty of small, local health and natural food stores with whom you could partner, with the advantage of their often fiercely loyal customer bases.
Start by putting together a marketing plan. If you’re creating a business plan you’ll work on your marketing plan as part of that process.