Starting up a farm from scratch can be overwhelming but starting with a plan can make it a much more manageable task. Before beginning searching for loans, there are important things to consider to ensure a successful farm startup plan.
First things first: GET ORGANIZED
This can be done by setting goals, creating a budget, making a business plan, and moving forward to receive funding. A combination of these factors can help you create successful farm startup plan.
Set goals
Start by setting short and long-term goals. Consider things such as what you would like your quality of life to be living on the farm, what kind and how much land you need, and the type of production you will be doing.
Consider your annual income, methods of production, quantity and quality of product.
Setting short-term goals will help set you up for success in your long-term goals.
Create a budget
Farm expenses: how much will it take to produce your crops and/or livestock?
Farm income: how much do you project your farm to make?
Supplemental income: will you have income supplemented in any ways? Other jobs?
Living expenses: how much do you expect to need to give yourself the quality of life set in your goals?
With this in mind, create a cash flow template. When will money be coming in and out of your farm? When will you need money throughout the year to fulfill responsibilities? Consider timing and plan for things to go wrong.
Make a business plan
Experience: Do you have the experience to needed to achieve your goals? Will you seek additional help?
Lease agreements: Will you use lease agreements for land, equipment, or other necessities?
Down payment: Do you have resources to make a down payment on the farm you are aiming for? Are you willing to put forth your savings account to achieve your goals?
Know your limit: Consider credit limits. How much money will you need to achieve your goals and how much will a lander be willing to give? Remember to stay within the limits of what a lender is willing to loan. Keep your farm practical and achievable, it is always possible to continue to build your farm.
Look for Lenders
Begin your search for lenders to fund your farm. Keep things in mind such as interest rates and credit limits. There are a variety of lenders willing to give loans to aspiring dependable farmers. There is more in depth information about this in the “Public Startup Programs” and “Private Startup Programs” section of this website.
Do Your Research
Being informed is important to building a foundation for a successful farm startup program. This website offers a variety of resources to help in your research for starting you farm.
Sources:
http://www.cfra.org/resources/beginning_farmer/financialpicture?gclid=Cj0KEQjwsai_BRC30KH347fjksoBEiQAoiaqsRu278to4y0xtaEZ0cPEiskjRTCO8okGkqRb8p5D7hYaAr5w8P8HAQ