Have you decided to start your own farm? Whether you come from a family of farmers or breeders, or whether you have chosen this path out of passion during your studies, or on the occasion of a professional retraining, the launch of your own farm is a long journey. To help you see more clearly the steps to take to make your project a reality, we see here in detail how to develop a solid and reliable farming business plan, a necessary precondition for starting your activity and guaranteeing its success.
Conduct an agricultural market study
The farm: an entity to rethink
We all have this figure in mind: nearly one in three farmers earns less than 400 euros per month. But we all also know that eating better or eating well is a growing concern of the AMERICA. It’s hard to miss the monumental boom in organic farming; Organic which should be invited a little more on the trays of school canteens, at least that is what candidate Emmanuel Macron had promised: 50% of products from organic farming at school. As we can see, the agricultural sector is undergoing a metamorphosis, strongly influenced by societal trends that affect the entire agro-food sector and militate for agriculture and livestock that are more respectful of the environment, often favoring short circuits in order to minimize the carbon footprint and better understand and remunerate the work of the operator.
Carrying out the market study of a farm: the information to gather
Carrying out a complete market study of the agricultural sector will prove invaluable when choosing your concept and your geographic location. You will need to gather all the information relating to the functioning and current affairs of the sector: its underlying trends, changes in regulations, etc. Market research should allow you to have a global vision of the sector and to fully understand the habits of America in terms of consumption of products from farms. You will then have to take an interest in the existing offer. The idea is to establish a precise map of the farms located near the location you are considering:
How many are there? Where are they located?
What type of activity is it?
To whom do they sell their products (directly to consumers on the markets, to manufacturers or to mass retailers)?
Are you also interested in the turnover of the sector: how much does it represent in total? Is it on the rise? Increasing? Stable? Does it vary in volume (more or less products sold) or in value (products sold more or less expensive)?
Finally, ask yourself whom farms are seeing their turnover increase? Where are they located and what type of operation is it? Ditto for farms in difficulty which see their turnover decline. In both cases, try to identify the factors that contribute to the good or bad health of these farms in order to reproduce the good practices and avoid the bad ones.
Opening a farm: the choice of the concept
The next step in starting a farm is to choose the type of products you plan to sell. First, of course, you have the choice between a farming operation focused on cultivation and breeding, unless you opt for a mixed operation. You will also need to choose the type of crop or breeding you want to practice. Be careful, however, this choice depends above all on the place where you are going to settle and the characteristics of the soil and the climate at this location. In the case of cultivation, also note that you will not be able to cultivate the same plant indefinitely on the same plot. In order to allow the soils to regenerate, it is advisable to diversify the seedlings over the years. Finally, you will need to choose your operating concept. Between the intensive and gigantic operation, type plateau of a thousand cows, or the minimalist and organic operation that turns into an educational farm on weekends, there is a wide range in which you will have to choose a concept that you like and will allow you to be proud of your work. Organic seems to be a particularly promising sector and which, at the present time, cannot meet demand for lack of sufficient farms. But be careful, the transition from conventional agriculture to organic farming is very expensive and you do not immediately benefit from the Organic Label which allows you to sell your products more expensively. Let us recall all the same that the elements to be taken into account in the choice of the concept are: Membership of this project and the pleasure you will derive from devoting yourself to this project. The response to the expectations of a target: your offer must meet a demand that is little or not satisfied possibly, the fact of standing out from the competition and offering a unique or infrequent concept
With what legal status to create a farm?
Even if you are not overwhelmed by the idea of choosing and defining the legal status of your farm, you still need to devote some of your time to this step. More than a simple administrative formality in fact, the choice of status has a direct impact on many aspects of the daily management of your company. The legal form of the company influences in particular the method of taxation, the responsibility of the director’s vis-à-vis the debts of the company, and the governance of the company (votes, number of partners, and role of legal representatives).It is therefore advisable not to take decisions lightly and to learn well about the particularities of the many options that exist: sole proprietorship, with or without limited liability, micro-enterprise regime, simplified joint stock company, Liability Company. Limited, cooperative, association…Also check that your legal status is in accordance with the type of operation you want to create. For example, an organic farm wishing to distribute its products via short circuits can choose the status of cooperative and become a player in the social and solidarity economy. The process is complicated because many parameters are taken into account. This is why it is better to have all the cards in hand to choose the most suitable solution for your project. To orient yourself towards one status rather than another and make an informed choice, consult our guide to legal statuses.
Make the business plan of a farm
The business plan is an essential document for launching an agricultural business. In a simplified way, a farm business plan is a document composed of a written part presenting the strengths of the project in a reasoned way, and a financial forecast highlighting the financing need and the profitability potential of your project. Operating. An agricultural business plan therefore fulfills a dual function. It allows:
The entrepreneur to assess the financial viability of his professional project
The financial partners to learn about the professional project and decide whether or not to finance its it is this document that you will communicate to your possible financial partners (banks, associates, etc.) when seeking financing to present your project to them, it goes without saying that your business plan must be flawless both in substance and on Form. If you’re not sure where to start and you’ve never done a cattle business before, you may to turn to Folio3 cattle management software
Using specialized software has several advantages:
You are guided in the drafting by detailed instructions and examples for each part of the plan you can take inspiration from business plan models already written You easily realize your financial forecast by letting the software take care of the accounting aspects for you get a professional document, formatted, and ready to be sent to your banker if you are interested in this type of tool, know that you can try our software for free by clicking here.
The search for agricultural financing
The investments to start one’s own farm are substantial: equipment, sheds, seedlings, fertilizers, livestock, etc. There is no shortage of expenditure items and the prices of equipment are sometimes very high. Fortunately, there are financing solutions available to help you raise the funds needed to start your farm. First, assess your own funds, that is to say the amount of money that you can raise immediately without going into debt (your savings and potentially that of your associates).Then you can also resort to a bank loan. This will be a professional loan taken out with a banking establishment. Submit your file to several banks and compete to obtain credit at the most advantageous rate.
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