How to Start a Farm: 8 Steps to Farming Success - FreshBooks (2024)

14 Min. Read

July 15, 2020

Why Found a Farm?

How Much Do Farmers Make?

Where Should You Establish a Farm?

Different Types of Farm Businesses for Different Types of Farmers

8 Steps to Starting a Farm from the Ground Up

Get Started on Your Farm

Agriculture is one of the most important industries in the world. Aside from producing nutritious food, farms are sources of other products we use and consume daily. Farms also provide places to go for leisure or entertainment.

The structure of the agricultural world has really shifted in the past century. These days, it has become more popular to found a farm business even if you were not born into a farming family.

Here, we are going to discuss how to start a successful farm. We will also cover some important information regarding types of farms, how much farmers make and more.

Grab your work boots and your pitchfork, because we’re about to jump into the world of farming.

Why Found a Farm?

People usually establish a farm business for the same reasons they’d start any business. Maybe they have an innovative idea that puts a new twist on an old concept. Or perhaps they see a void and they know they can fill it. Farming could be one person’s lifelong dream.

Some small farms are born of a deep desire to connect with the land. From an environmental ethics standpoint, some people feel that starting a farm gives them a way to contribute to the protection of biodiversity. There’s really no right or wrong reason to want to start a farm business.

How Much Do Farmers Make?

The United States Department of Agriculture Economic Research Service (USDA ERS) broke down the net cash farm income forecast in the U.S. for 2020. Its reports suggest that a farm in the livestock industry is slated to net between $5,900 and $347,000, whereas a cash crop farm can expect to net between $68,500 and $192,500.

Clearly, there is a wide range of possible net incomes for a farm business. How much you make as a farmer will depend on the types of crops you grow or products you provide, the area you live in and a variety of other factors.

Since many crops are seasonal and many animals only breed at certain times of the year, farmers have to be strategic with their offerings if they are looking to maximize their profit.

Where Should You Establish a Farm?

Where you start your small farm will depend on what you want to produce. To learn about ideal crops for various locations and climates, visit the USDA website or compare crop production maps online.

When it comes to plants, where you live will play a major role in the types of crops you can grow on a small farm. Some fruits and vegetables are suited for temperate climates while others are suited for hot and dry climates.

If you’re raising animals, it is a bit easier to choose a location since most popular livestock—like chickens, cows and pigs—can grow in a wide variety of climates. However, you’ll still want to research the ideal climate for each type of animal for your farm business.

Are you looking to start a small farm on your existing plot in the suburbs? Or do you imagine growing a larger farm in a more rural area? Consider your short- and long-term goals when choosing the ideal location for your farm.

Different Types of Farm Businesses for Different Types of Farmers

As you can imagine, there are many different types of farms. You can find farms large or small, and those cultivating plants, livestock or both. For simplicity, we’ve organized the most common types of farms into a few main categories.

Produce

If you walk into the produce section of the grocery store, you’ll see dozens of different kinds of fruits and vegetables. If you go to a farmers market, you’ll likely find even more specialty items.

This is the best way to demonstrate how many types of produce farms are possible. From cucumbers to tomatoes, squash to onions, the options are endless when you decide to start a produce farm and sell at farmers markets.

Dairy and Livestock

Although the dairy and livestock industry is predicted to experience a sharp decline over the next decade due to the slow cultural shift towards plant-based lifestyles, it could be the right choice for your farm business.

These industries are still alive and well. The livestock industry is seeing new types of demands as health-conscious people are starting to lean towards meat that is hormone and antibiotic-free.

Meat and dairy producing farms that are mindful of their animals’ welfare before they are butchered are preferred by consumers. If you feel inclined to create a meat or dairy farm business, perhaps you can find your place in this niche.

Fish

Fish farming is a unique type of farming that raises fish in either tanks or contained bodies of water. Most often, these fish are raised for food.

Since fish live in water, they absorb the toxins and chemicals that they are living in. Farming in tanks gives producers more control over the fish’s environment. It is reported that half of the fish consumed in the world is raised in fish farms.

Flowers

Did you know that flower farming is one of the most profitable types of farm business?

Flowers are very seasonal and require specific growing conditions. A farmer who owns land suitable for flower farming can make up to $30,000 per acre of land every harvest.

As a flower farmer, you can do so much with your product. You could become a regional, national or even international supplier for florists. You also have the option to offer your own florist services. From there, you can specialize in delivered arrangements, weddings, funerals and more.

Specialty Farms

There are a few types of farms that are very, very specific in their offerings. Many specialty farms offer an experience to learn about farming in addition to their products.

This may look like a small shop on the farm or a fine dining experience. It could also be farmer-led behind-the-scenes tours.

Here are a few types of specialty farms:

• Vineyards
• Bonsai farms
• Cannabis farms
• Chocolate farms (dairy farms that specialize in chocolate products)
• Apiary (bee yard)

Many specialty farms become tourist destinations since they typically offer a niche experience that attracts customers both far and wide.

Energy

One type of farming that is rarely talked about is energy farming. This type of farm can look a few different ways.

Some energy farms grow energy crops, and others are designed to generate wind or solar energy. Energy crops are things that are grown to replace coal and other fossil fuels. These crops are not meant to be eaten but are meant to be burned to produce energy. Some examples include corn, clover and different types of grasses.

When it comes to solar and wind farming, nothing is being grown or raised, per se. Typically, a solar farm is a large lot of land in a sunny area that is filled with solar panels. Similarly, wind farms have windmills in windy areas, typically near the ocean or on top of hills.

The purpose of energy farms is to create sustainable energy that has a net negative carbon dioxide production.

Entertainment

Farms are often the setting of fond memories that last a lifetime. It could be a pumpkin patch on a small farm that your grandma took you to every fall as a child, or perhaps a pony stable you once visited on a trip.

As a farmer, you can create a small farm that brings those same lovely memories to others. Some examples of farms geared towards entertainment include:

• U-pick farms (strawberries, blueberries and more)
• Petting zoos
• Fall farms (pumpkin patches, corn mazes, hayrides, etc.)
• Horse stables (for horseback riding)

A few of the specialty farms we mentioned before that offer experiences could also fall into this category.

8 Steps to Starting a Farm from the Ground Up

The process of starting a farm is very straightforward, but it is not something that happens overnight. This industry can be quite lucrative, but it takes months of learning how to run a small farm, planning your crops and marketing your products.

Here are eight actionable steps that will walk you through how to start farming like a pro.

1. Choose Something to Produce

As a farmer, the first step in starting a farm is deciding what you want to produce. We’ve covered quite a few types of farming, but the options don’t end there.

You can grow or raise just about any plant or animal you’d like on your small farm as long as the circ*mstances are right.

What you plan to produce will weigh heavily on your preferences and interests as a farmer. It is also important to point out that there are a lot of ethical questions that arise when you decide to found a small farm.

Agriculture, in general, relies greatly on the land and other creatures. If sustainability is important to you as a farmer, you’ll likely want to start leaning towards growing crops in a fashion that promotes biodiversity.

Ultimately, you will want to consider what sort of agricultural products will provide the return on investment that you are hoping for with your small farm.

2. Learn the Ins and Outs of Your Product

There are many layers to farming, especially since there are variables that are out of small farmers’ control.

For most types of farming, learning as you go is simply not an option. There are many ways farmers can learn. Some trade schools, colleges, and universities offer degrees and certificates in agriculture.

A quick Google search of “grants for agricultural education” will bring up tons of programs that will actually pay you to first learn how to farm, and then plan a career in agriculture.

If the formal education route isn’t interesting to you, you can first work alongside a seasoned farmer as an apprentice or farmhand to learn about farming.

Your local 4H and other similar organizations should have resources available on how to start a small farm, as well. Choose the agricultural education option that makes the most sense for your preferences and lifestyle.

3. Figure Out Your Finances

Like any small business, you’ll need to find the funds to get started. A small farm is a business that requires quite a bit of overhead.

You’ll need land, equipment, labor, licensing, insurance and more. There is also the option for farmers to buy a functioning farm, but that still requires quite a bit of capital to get started.

Starting a small farm is said to cost up to about $10,000. However, starting a commercial farm can cost millions.

There are a few ways to fund a small farm. The simplest way would be buying it in cash if you can find the capital. If you don’t have a couple million dollars lying around, there are other options to make your dream a reality. You could get a commercial loan or seek out investors. You could also tap into scholarships and grants for farmers offered by local and national organizations.

4. Purchase Your Property

So, you know what you want to produce, you’ve learned everything you need to know to get started with this type of farm and you’ve got your funding figured out in your business plan. Now it’s time to find and purchase some land.

Purchasing property for a farm is something that must be well thought out. If you will be raising livestock, you need to make sure the climate is appropriate for the type of animals you’ll be raising.

However, finding land to plant crops opens a whole other can of worms. Plants can be very finicky. The conditions have to be just right for a successful harvest. Here are a few things to consider:

• What type of climate is best for my crop?
• Which regions have this type of climate?
• Is the land fertile and rich in the appropriate nutrients?
• How much rain does the area get? Does it flood easily?
• If it’s dry, is it possible to irrigate the land?
• How easy will the fields be to work in?
• Is the land safe for all of the employees and animals (if applicable)?

There is another layer to the land selection that many farmers are starting to take into consideration: is the land classified as organic?

You’ll want to check local legislation for the specifics of organic farming. But this is definitely something to keep in mind if you plan to take the organic route.

5. Strategize and Prepare

How you plan to prepare the land on your small farm will depend on what you are growing, raising or producing.

If you are growing crops, you have to ensure the fertility of your land. You may spend a few years fertilizing your land naturally with compost and manure. Alternatively, you can use chemical fertilizers. Choosing how to enrich your soil will go back to your thoughts on sustainability.

During your agricultural education for your small business, you will learn about crop rotation. If you are buying land that has been farmed for years, you will need to determine which crops to plant next. You will likely plan and strategize a few years out based on crop rotation patterns.

Irrigation is something to take into consideration when you’re starting, as well.

If you are raising livestock, you must build the appropriate stables. Whether you’re raising livestock for meat, or for eggs, milk, wool or other byproducts will determine what sort of structure you will build.

Other details to consider are whether or not you’ll have additional animals on the farm. For example, many farmers choose to have cats on the farm since they keep rats and mice out of the feed.

In this step, you can also take a look at everything from a business perspective.

6. Implement Your Farming Business Plan

You’ve created your business plan, and now it’s time to take action. It is important to go into this journey with some flexibility. Remember to have back-up options so that you’re covered no matter what happens.

7. Develop Your Product

Even if you specialize in growing or raising one thing, you may develop several related products for your small business.

Let’s say you decided to grow beets. You could choose to sell beets by the bunch. You could also produce and sell cold-pressed beet juice, beet root powder, beet jam or any other beet-based product.

Decide on the direction you want to take and develop your product accordingly. Determine how you will package your product, how you can make it last the longest (if it is a perishable item) and figure out how you will price it.

At this stage, you will want to develop your brand, as well. This goes beyond an aesthetically pleasing logo for your business. Get started by establishing who you are as a business and what sort of value you can plan to provide for your customers.

8. Market Your Products

How you market your products will be determined by who you plan to sell them to.

Here are a few things to consider when identifying the target audience for your business:

• Will the product be sold as an ingredient to a manufacturer?
• Will you be selling to stores or directly to consumers?
• Can your customers buy the product online?

As we mentioned before, your farm could offer an experience, so this would be “packaged” and sold differently.

Get Started on Your Farm

There are so many ways to plan starting a farm. Every farmer’s business journey will be a bit different, and that is OK. That being said, the eight steps we’ve discussed for building a farm from the ground up are a great starting point. It’s a solid plan for farmers who are completely new to the game and want to start learning how to farm.

Now that you’re equipped with the information you need to start your farming journey, it is time to take some action. Are you ready to start farming?

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