farming for profit

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Are you looking for a Small Farm Business Plan? I have created an easy to follow $100K Farm Business Plan Worksheet that will get you on your way to profitable farm life!

When I ran a poll on the Harmony Farms Instagram page I was excited to find that 83% of voters want to make farming their full-time job and 100% of voters were interested in knowing how I created my small farm business plan.

While $100K may sound like a lot of money, a gross sales goal of $100,000 per year is almost essential for those wanting to make a profit from their small farm. This $100K sales goal is needful because, as the farmer, you will only be left with around 30% after all of your farming expenses are paid.

Farming was not going to be a hobby for me, I set out from the start to make my small farm a serious business… with real profit. As such, one fo the first things I did was create a farm business plan. I established a gross-sales goal of $100,000 for my small farm and began to explore ways that I could stack various types of farm enterprises to maximize my relatively small acreage.

My success here will be a result of the Lord’s blessing, but having a solid plan to profit helps me to maintain my focus in the day-to-day.

I have set a 7-year timeline for taking my farm from zero to $100,000 in annual sales. If you are setting out to make farming a significant source of profit, I encourage you to pace yourself for the long run. It has been said that the average person overestimates what he can do in one year, but even more so underestimates what he can do in 5 years.

But first, why do you want to be a farmer?

Why do you want to be a farmer? Your answer to this question will be your foundation as you set out on the journey toward small farming for profit.

If your answer is simply “I want to make money” you are going to have a weak foundation. There are a million other ways to make this kind of money and, 999,000 of them will be easier than farming.

As a small farmer (especially a first-generation farmer) you are going to encounter a lot of challenges. Farming is not easy. You must have an anchor-point for difficult and discouraging times.

My anchor point is, quite simply, the Lord. I believe He has lead me to this very place in both time and location. It is no mistake that my family exchanged life in the big city of San Antonio for 30 acres of pasture in an East Texas town; and it is no mistake that my unshakeable interest in raising beef cattle resulted in a personal awakening to the urgent need for continued growth in the Regenerative Farming Movement. Modern convention is failing, and it is failing in one of the most essential areas of life: our food supply chain.

I believe that the Lord is leading me to utilize my experience in business to maximize the resources He has placed me in the midst of. This is my why, and this (plus a good support group) keeps me anchored on bad days.

Now we can get started.

Create a $100K Farm Business Plan by Answering 7 Questions:

(Download the worksheet here)

Outline:

1. Why do you want to be a farmer? (above)
2. Who will buy my farm goods? (Market Analysis)
3. What do you have to start with? (Evaluate your resources)
4. What are you Going to Farm? (Find the best fit)
5. How much do I need to sell? (Aiming for $100k)
6. When will you reach this goal? (Establish a timeline)
7. Where are you going to get the money? (Counting the Cost)

Question 2: Who will buy my farm goods? (Market Analysis)

The first step in creating a Farm Business Plan is Market Analysis. Market Analysis is just a fancy way of saying: make sure there are people out there who want to buy your potential farm goods.

Using the Harmony Farms $100K Business Plan Worksheet list as many ways you can think of to sell your farm goods. Brainstorm and don’t put any limits on yourself. Will you sell your farm goods to friends and family? Will you market to your local community? Will you sell at a metro area farmers market? Will you sell to farm-to-table restaurants? Will it be all of the above?  Try to list at least 10 potential customer-groups for your (hypothetical) farm products.

QUICK TIP: Most successful Market Farmers live within 2 hours of a largely populates metro area.

Question 3: What do you have to start with? (Evaluate your resources)

Step 2 in the $100K Farm Business Plan Worksheet is take a thorough inventory of existing resources. Take this resource inventory before you make a final decision about what animal or produce to farm.

In order to minimize startup costs, it is important to make sure your resources closely match the product you decide to farm. 

For example: if I wanted to farm gourmet grass-fed beef; but my primary resource is a 3-acre land base that grows nothing but ragweed, my resource does not match my desired finished product.  I probably need to think about farming something like gourmet goat’s milk instead.  

Go to your Harmony Farms $100K Business Plan Worksheet list as many existing resources as you can think of. List things like acreage, grass quality, rainfall, average days of sunlight, human resource (aka, free help!😂), fencing, and so on.

QUICK TIP: For maximum profitability, make sure the animals or produce you want to farm closely match existing resources. Don’t cling to your ideals at the expense of profitability!

As an example: I thought I would be farming primarily grass-fed beef cattle, but after a thorough inventory of my resources, sheep are a 3x more profitable fit for my operation! I’m still farming beef, but on a much smaller scale than sheep.

A key to profitability in any business is minimizing inputs ($$) by maximizing existing resources!

Invariably there will be that person who says: “What if I don’t have any existing resources??” Well, maybe you aren’t looking hard enough. You don’t need much to farm for profit. I’ve heard story after story of farmers who earn $100K per acre growing specialty products; things like roses, micro greens, and high end organic veggies.

Look for opportunities, not obstacles.

Nuf said.

Question 4: What are you Going to Farm?

Now that you have taken an inventory of what you have to get started with (existing resources), it is time to do your research. What are you going to farm?

Determine what species, or what variety of species, will give you a good profit-per-acre. Research what goes into raising these animals or this produce. Then, go to your local Farmer’s Markets and check out what other farmers are charging for their farm products.

Grass fed beef cattle was my initial goal in farming, but after running the numbers, visiting local markets, and counting the cost of raising sheep, my Grass Fed Lamb will actually be 30-40% more profitable than my Grass Fed Hereford-Angus Beef.

Using your Harmony Farms $100K Business Plan Worksheet, brainstorm again. This time, brainstorm on what you could farm, given your existing resources. Pigs, goats, chickens, beef steer, sheep… make a list and research the needs associated with each class of livestock to determine the best fit for your resources. Also, fill in the “Retail Price Per Pound” field beside each farm product.

QUICK TIP: Visit your local Farmer’s Market. What are the locals farming? What are they charging? How much competition is there for the product you want to farm? Is there a gap in the Market that you could fill with a more unique farm products?

Question 5: How much do I need to sell reach $100K?

Now that you have determined what you will farm, you need to calculate how many units you need to sell to reach $100k in gross sales. In this Harmony Farms $100K Business Plan Worksheet, we are defining a unit as 1lb of meat or produce.

Let’s use Grass-Fed Lamb as an example. A very safe estimate on the price of Grass-Fed Lamb is $11 per pound. To find out how many pounds you need to sell, divide $100,000 by $11. This divides out to 9,091 pounds of lamb. Each lamb on your farm will yield around 40 pounds of meat, so if you choose to only farm sheep, you will need to produce roughly 228 marketable lambs every year.

This will be another point at which your resource inventory comes into play. Do you have the resources to produce the units necessary to reach $100k in annual sales?

Make stocking decisions based on a responsible evaluation of your land base, not desired income.

If, at this point, you realize you do not have the resources to reach this $100K sales goal, don’t worry. You do not have to reach this goal in one year. Start small. Diversify. Rethink your main enterprise… But don’t give up. Do what you can and grow from there.

Question 6: How long will I give myself to reach this goal?

It has been said that the average person overestimates what he can do in 1 year, but underestimates what he can do in 5 years.  

My timeline for reaching $100k in annual sales is 7 years. This timeline allows for an incremental increase in stocking density. It allows me to guard against overgrazing, over-stocking, and so on. My 7-year timeline gives me the ability to grow in a way that prioritizes the regeneration of my land base, as opposed to suddenly stocking 100 ewes + 20 cows and entering a degenerative land-management tailspin.

Establish a timeline that will allow you to grow your farm in a way that benefits your land base.

In addition to benefitting my land base, incremental growth also keeps me from having to go into debt to build my farm.

Question 7: How much will this cost?

With steps 1-5 in place, it’s time to make a list of what it will take to equip your farm for production. Make it your goal to buy as little as possible. Be resourceful and use what you have whenever possible.

Profitability is taking an existing resource and converting it into a product that appeals to the masses: but only if the cost of conversion does not exceed the sale price of your product.

I am using a simple spreadsheet to track my farm expenses, as well as list projected expenses. Keep it simple: record what you have spent and when you spent it. Then record any expenses you see on the horizon. Recording these projected expenses allows you to begin strategizing in advance (i.e. what will you sell on Facebook Marketplace to pay for your upcoming farm expenses… 😂).

Two free spreadsheet resources I use are Google Drive and One Drive. Both platforms function the same, but One Drive is more privacy-oriented. Both platforms allow me to access my spreadsheets across all my devices.

Focus.

The analogy of light is so applicable to the different ways we can approach our goals.

On one hand you have a search-light:

A searchlight is equivalent to someone setting out with tons of energy but no real focus. This massive light flashes everywhere, all the time and uses a ton of energy. It does not stay focused on one thing long enough to even illuminate, a path to the end goal.

On the other hand you have a laser-light.

A laser-light is the equivalent of a person setting out with an intense focus on his end goals; he is going in one direction with a clear goal in mind.

In both instances, we are working with the same element (light), but it is the intensity of your focus that proves the game-changer.

By establishing this Farm Business Plan upfront you will have the opportunity to begin with the intensity of focus you need to accomplish your goals.

And to bring it all back to real life: at the end of the day you have to do the work. Plant the seeds, take care of the animals, do the dirty work. Roll up your sleeves and whatever team or support group you accumulate in this farming journey, lead them by your example.

“…but God gave the increase. · So then neither is he that planteth any thing, neither he that watereth; but God that giveth the increase.” 1 Corinthians 3:6-8