Things to consider in owning and operating a small farm business


Some key questions you need to consider

Tony Nye - OSU Extension



Living on a small farm can be a life-long adventure. Small farms are also presented many challenges and circumstances that will affect their potential productivity and profitability.

Whether a person has been farming for a while or they are new to agriculture, landowners want to attain a greater understanding of production practices and requirements, economics of land use choices, assessment of personal and natural resources, marketing alternatives and the identification of assistance.

In my role as an Extension professional, I work with many small acreage landowners on a day-to-day basis, and the issues are always the same. It can be a very rewarding experience no matter what is being done with the land.

However, it can get overwhelming at times as well.

Whether you have been working with a current enterprise or are just beginning something new, there are always things to think about. Begin by taking inventory of your personal and natural resources.

Look at your property first.

Is it well-drained, is it fertile, is it tillable or not? Is there crop land, forest, or pasture and hay?

Next, do you have available water and how much? What is the source of that water? If irrigation is required, can you or will you have to develop more water supplies through drilling a bigger well, assessing a pond, or will you need to rely on some other means of water, such as a stream?

Are there buildings and fences? What kind of buildings and what condition are they in? Are they suitable for other enterprises?

Does the property have any unique features? In other words, does the property have potential for get-away cabins, scenic hiking etc.? Does the location of the property have potential for an on-farm market? Availability and access to roads and utilities? A gas well?

Then look at your personal inventory.

Do you have the necessary funds? What skills do you have? Can you and your family provide the necessary labor? Will your family provide some of the labor?

Do you need training? Will you have the time to do what is necessary to “get the job done”? Are the labor requirements seasonal or spread evenly throughout the year? How often do you need to be “on-site”?

How do the requirements match up with your lifestyle?

What equipment do you currently own — tractor, tillage, bush-hog, handling facilities etc.? What condition is it in? What would be needed for enterprises you are considering? Can you buy used, or is new equipment the only option?

What vision and values do you hold? A farm is both an extension of the vision and values of the people involved. Where do you see your farm, your family, and the industry over the next few years? What are your beliefs as a business, individual, spiritually being?

Your vision and values should help you establish a Mission Statement that should represent the fundamental reasons for your business to exist.

What are your objectives and goals? Objectives can help outline how you want the business to develop: What it will look like in the future. They help realize the mission and exist to help plan, coordinate and motivate the farm.

Goals are the “SMART” statements of what needs to be done to complete the objectives. “SMART” = Specific, Measurable, Attainable, Rewarding, and Timed.

Planning: New or existing farms need to have a well thought-out business plan that takes into consideration individual infrastructure and financial needs, marketing strategies, production capabilities and knowledge assets needed to be successful.

Education and experience: Preparation, knowledge, and training are essential: We should never stop learning and growing. We need to position ourselves to adapt quickly and to react to the unexpected, to persevere when facing factors beyond our control, and learn where to expend time, energy, and resources.

Managing risk: It’s helpful to plan carefully to manage risk diversification, financial management, and set yourself up to withstand a couple of bad years.

Place matters: “Out-of-site, out-of-mind” may not be the best approach to the marketing side of the business. Can you be creative in your marketing plan? Can you reach your customers effectively?

If not, you will need to look at an outside supplier.

Start small: No matter whether you are a seasoned farmer or just starting out, it’s always advisable to start small with any new enterprise while allowing time for details to be worked out, additional learning to occur, and to mitigate the size and scope of problems that will inevitably arise.

There is no “cookie-cutter” approach to successful farming. Whether you are a seasoned pro, a new farmer, a hobbyist, looking for a different lifestyle, or want to develop a true farm business, take the time to plan for success, gain a greater understanding of the necessary production practices, economics of land use choices, assessment of personal and natural resources, marketing alternatives, and sources of assistance.

Finally, farm with confidence: Choose something that you love to do, make good decisions based on facts, keep informed and plan for the future.

Tony Nye is the state coordinator for the Ohio State University Extension Small Farm Program and has been an OSU Extension Educator for agriculture and natural resources for over 30 years, currently serving Clinton County and the Miami Valley EERA.

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Some key questions you need to consider

Tony Nye

OSU Extension