How to Start a Small Farm Business

Every farming project starts with an idea. In order to bring this idea to life and establish a successful enterprise, the first action to carry out is to build a strong business plan. Consider this energy-consuming process as an investment that will save you considerable time and money once the project has taken off. Here is a step by step guide that will help you build the foundation towards a successful career in agriculture.

Female farmer in farmland

1. Determine your motives and expectations

People starting in the farming industry are not necessarily young people who were raised on a farm. New farmers may have little to no experience in agriculture, many are even unlikely to have ever been business owners. Success for new farm business operators is far from assured but one thing is certain: the satisfaction you will draw from your project depends on its ability to reach your expectations.

Why do you wish to start a farming business? To have a professional activity in connection with nature, to live and work in the countryside, to be your own boss…

What is the connection with your personal life plans? To have more free time, to reconcile your personal and professional life, to have a job that matches yours convictions….

Each project initiator has his own motivations and the answer to these questions can be numerous and varied. This is what makes every project unique! Be honest with yourself, your motives might come in as a great reminder when your initial enthusiasm is inevitably confronted to the sometimes challenging reality of the farming world.

2. Define your business activity

What kind of production do you wish to develop? Livestock production? Crop production? Or maybe a combination of both?

To answer this question, a knowledge of the geographic, climatic and economic condition of the region your business will be settled in is a must. It will allow you to develop a better understanding of the strengths and weaknesses of each option at hand.

Agricultural activities are directly influenced by the environment: soil, climate, history of land use… It is therefore important to be aware of these different factors and how they can be more or less favorable to each type of farming production. For example, soil quality and characteristics such as water retention or pH should impact your choice of crop.

Similarly, market research can offer important information regarding products that are in low supply in your region or the type of customers you are likely to encounter.

Tractor in farm

3. Research your agricultural business

Here are the main elements you will need to consider:


Where are you planning to set up your farming business? What surface will you need? What type of environment are you looking for? What about climate, soil type, rainfall, altitude, nearby cities, proximity to suppliers and other farmers, proximity to family and friends …

Another important question to consider if wither you would rather buy or rent your farming property.

Farming Equipment

To successfully perform the various operations related to your farming business, you will need an array of tools and machinery such as combine harvesters, tractors, weeding tools, livestock equipment…and they can represent an important financial investment. Several options are possible. Ask yourself wither it is more interesting for you to buy new or used quality farm equipment. You may be tempted to buy new, but there are high quality used tractors for sale. You might even initially consider renting or sharing a tractor with other farmers. Remember that to begin with, you should limit yourself to a range of tools that is essential to get your business started.

Human Resources

Take time to plan ahead how much time will be dedicated to production, maintenance, packaging, processing and commercializing your product. Establish a task execution schedule for the first year, identify peak periods and anticipate their management. Will you need to hire help or can you count on mutual assistance from other farmers?

Sales channels

Commercializing your product can quickly become a very demanding and time consuming job depending on which sales channels you choose. You need to analyze your options and decide between direct sales or selling at wholesale. Do not forget to investigate local business opportunities.


What financial investments will you have to make? How much will you self-finance and how much will you borrow? Are you entitled to any financial aids?

The question of financing your farming business can’t be tackled until your project is clearly defined. Depending on your situation, you can resort to subsidies, loans or self-financing to establish yourself as a farmer progressively. There are times when acquiring debt makes sense but try to stay out of it as much as possible to finance your operation. For instance, do not try to get too big too soon. Develop your farm unit progressively over time and resist the temptation to buy more and better farm machinery than you really need.


Most governments closely monitor the food supply throughout their country and farms without permits or licenses in place may find it difficult to sell their products on the market. As a future farm business owner, you need to have your licenses and permits approved before starting any preparation for farming. Contact the department of agriculture of your state to find out about the applications you need to fill in, the qualifications you need to hold or the training you might need to complete.

Vineyard owner

4. Set your goals

You need to set your goals from the start: how will your project operate once it has reached cruising speed? Your objectives need to be technically feasible and proportional to the workforce, time and equipment you are committed to incorporate into your business. Your farm plan should obviously reach your economic expectations in terms of income.

How much do you plan to sell? What is your estimation of the profitability of your agricultural operation? What strategy will you need to implement in order to attain this goal? A combination of possibilities can be considered depending on the chosen activities and your financial means. Compare alternative plans so that resources can be budgeted for the best use and remember to consider uncontrollable situations (weather, changing prices…).

5. Allow your project to evolve over time

The final objective and the implementation strategy of your project should not be set in stone. Once you will have started your farming business and after a few months of experience, you will be much more knowledgeable than when you initially built your business plan. You will need to put to good use the experience you have gained, regarding production conditions or business opportunities for instance.

Take a step back and have a good look at the farm operation you have built. What were your initial expectations? What are your current achievements? What is the difference? How does it call into question the strategy you had initially defined? Does it require you to review your goals?

A project is never fixed, be prepared to constantly evaluate your situation and evolve along with the economic realities and social environment that surround you.