• How would you define a farm?
• Is the farm the primary way you will earn money?
• Will it be a secondary source of income?
• Will it be just for fun?

“I have 40 acres. I want to start a farm business.”

What are your goals?

Are you willing to run this operation as a business?

You must keep records and educate yourself.

Consider the risks of agricultural businesses:

• Production: Will the crop fail?
• Price: Will the market decline?
• Institutional: Will regulations interfere?
• Financial: Will the money be there?
• Personal: Will you stay healthy?

What resources do you have?

You will need three things:

• Land. A suitable place to do business. Could you be doing something else with it?
• Labor. Someone must know how to be a farmer. Who will do the work? How much does it cost?
• Love. Is this something you really want to do? You may have to make sacrifices.

Is there a market?

Will someone buy what you produce?

Is there an established market?

• What are the market dynamics?
• Is the market saturated with this product?
• Can you compete at your scale?
• Can you make it profitable at the market prices?

Can you establish a market?

• Are you willing to commit the additional time and cost?
• Can you handle the uncertainty?

Alternatives: What else could you do?

Finances

Show me the money!

Considerations:

• Interest cost on borrowed money
• Collateral for a loan

Do you have personal investment capital?

• What could it be earning otherwise?

Create a business plan.

• Show a profit on paper.
• Create a budget using reasonable production income and expense estimates.

What return do you expect from your investment?

Visit www.aces.edu/go/farm-management to learn more on the Alabama Extension website.

Dennis Brothers, Associate Extension Professor, Agricultural Economics and Rural Sociology, Auburn University

Revised November 2023, So You Want To Be a Farmer, ANR-3021