- 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?
Show me the money!
- 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