Last month we gave you a fantastic guide to starting your own farming business. But, while it will give you all the tools you need to get started, the article left some big questions unanswered. How are you going to make money and develop your business? We’re going to go a step further today. Read on to find out some essential rules for getting those all-important sales and improving your profit margins. Let’s take a closer look.
Identify different markets
There are several different income routes you can explore as a farmer, and it’s vital you consider them all. While most newcomers to farming will be hoping to cut a deal with a major supermarket, it is important to understand that this might not be enough. Although things are changing – slowly – supermarkets and big companies have a tendency to drive a hard bargain. It can often result in acres of crops being left behind, which clearly have a big effect on your cost per sale. Farming grants can help ease the pain, of course. But, if you can find other avenues to sell your offcast products then you can improve your bottom line by a significant amount. Think about bringing your product to farmers markets, or setting up a farm store where visitors can make purchases.
Invest in better equipment and machinery
The quality of your equipment will go a long way towards your efficiency and ability to turn a decent product. Yes, a simple tractor or harvester might be OK when you are just starting. But there is a vast difference in quality in, say, a New Holland tractor and an inferior make. The initial investment will be a little more, for sure. But it will also mean fewer running and maintenance costs – and will last a lot longer, too. It’s important to see farming as a long-term activity, as some years will produce more than others. With this in mind, the longevity and quality of your equipment are going to affect your profit margins over 4-5 years at a time.
Matching the land with the product
There will be plenty of opportunities for you to grow your farm and consider different produce. However, before you make any decisions, make sure you are sensible. There might be a trend in alpaca wool that you want to exploit, for example. But, unless your land is suitable for raising this kind of livestock, it’s not going to work for you. Only use trends as a guideline – it is your land type that will define what you grow if you want success.
Have backup plans
In farming, the weather can be your best friend or your worst enemy. You just cannot rely on it to deliver the same conditions every year, and it is vital to have backup plans if things go awry. There is a lot of pressure to deal with, of course. But, with careful financial planning and by communicating with everyone involved, you can be ready for anything. Don’t forget, annual plans are essential; long-term plans even more so.