How to Start a Small Farm | A Step-by-Step Guide

Hey nerds, Farmer Jesse here. So today, let's talk about starting a farm. But this is not your average video where I just say get some land and plant some seeds rather. This is the nitty gritty, whether you're starting from scratch or leveling up your homestead or just wondering what the heck a farm would take to start. This video is going to give you the guidance you need to make that jump properly. So let's do it. Okay, so obviously starting a small farm is no small task. Farms are these incredibly dynamic entities unlike almost any other business where you are not just the manufacturer in many cases, but also the distributor, the marketing department, HR, the guy with the bad jokes at the water cooler, all of it. And so because the farm business is so complex, my first step to starting a farm is wildly important. And it may even lead some of you immediately down to the comment section to voice your objections, but hold on. First, I want to give a shout out to today's video sponsor, BCS America. BCS two wheeled tractors power dozens of PTO driven attachments and they're built with gear driven transmissions that come with a lifetime warranty. I mean, flail mowers, power harrows, snow blowers, chippers and more. Not only has BCS been a long time supporter of no-till growers, but I rely heavily on a BCS 749 for innumerable tasks on my farm. We bought our BCS in 2014 and it has been without question one of the best farm investments to date. Learn more at bcsamerica.com. Okay, so back to that wildly important suggestion that I want to make off the top and hear me out. The very first step to starting a farm is not buying land. Indeed, purchasing land may be the last step or may not be a step at all, honestly. Of course, if you're inheriting land or you have land to use or you've already purchased land, then that's fine. You can move on to the next step, but for prospective farm business owners though, know that land ownership can gravely complicate starting a successful business. Like when you go to start a restaurant or a dance studio or a soccer-themed karaoke bar, I am allowed to have dreams. You wouldn't normally purchase the property first, right? You would likely rent first and if things went really well, perhaps you would expand or build your own structure or remodel an existing one or whatever. Well, that same sort of rule can and maybe should apply to farming. Family farms, no-till farms or generative farms, they're all still businesses at their core and they need to be treated as such, but that doesn't have to be a downer. In fact, treating it like a business is how you can come to enjoy farming for a very sustainable and long period of time. So indeed, land ownership can absolutely gobble up your startup capital, create long-term stresses and add work and risk that are not directly contributing to your farm or farm business. I know because land ownership has left us undercapitalized for the majority of our farming career, which is nearly 15 years now, being undercapitalized can lead to a lot of stress. Now, if you're sitting on loads of money, then obviously do whatever, but for most of us, we're not. So we should set land ownership aside for the moment and focus on some of the other elements of starting a sustainable farm business, which brings us to step two, create your family or personal budget. One obligatory note here, I do not have a monopoly on all the good advice or good ideas, so please feel encouraged to add your insight and comments in the comment section. Okay, so a personal slash family budget is not a business plan. That comes a little bit later. Before you do anything for the farm business, if you don't already, you need to know exactly how much you need to earn month to month and year to year to safely and stress freely, if that's a word, survive. It is a very common farming mistake to intertwine your family and farming expenses and incomes. We did, and you probably will. It's not easy to undo. So just nip that one in the bud because if you do not pay attention to what you and your family need, starting a farm is going to be infinitely stressful and it's going to be hard to tell if the farm is actually making enough to survive and if your family is just having to supplement that. This family slash personal budget does not have to be perfect. Go through your bank account and get a rough idea of how much you spend every month and on what, fuel, insurance, retirement, medical expenses, food, soccer, karaoke, car repairs, and try to be on the high end of those numbers so that you don't undershoot them and get in trouble down the road. Later, you will make a farm budget as well. That will include what you expect to spend every month on the farm and over the course of a year. Some skills with spreadsheets definitely come in handy in business ownership. Check out Dan Breezeblah's Spreadsheet Academy, in fact, for help there. I'll put a link in the show notes, but also a Word document is a fine place to start or a notebook or a napkin or tattoos or whatever. Next, and obviously you can do some of these steps concurrently, but next you really should get some amount of farming or growing experience. That could be growing food in your backyard or raising hens or growing microgreens or mushrooms, legal ones, in your closet, or it could be volunteering or full-time working on a farm or all of the above. I did two years apprenticing on a very diversified farm with gardens and rotational grazing and hens with a woman who would later be my wife before starting a farm, and even that felt like not quite enough experience. Hannah and I always tell people we wished we'd worked on at least one more farm before venturing off on our own just so we had more experience with things like irrigation, for instance, because our mentors were dry farmers, so that's all we knew. We also wish we'd spent more time learning about the business side of farming and high tunnel production and working in permanent raised beds instead of row cropping. Farming is a complicated enterprise, so there's a lot to know. I will say, though, that when I started farming was before YouTube had really taken off and there were no farm courses. There was basically just the New Organic Grower and a couple forums and blogs, and that was basically it. So those relatively new resources, including the Living Soil Handbook, will help to supplement your experience, but experience itself is still profoundly helpful. Like, I can tell you how to grow carrots, like in this video, but the nuances require actually growing them. Now, that said, not everyone can stop what they're doing and work on a farm for 10 or two or five years or whatever to gain the level of experience that would really help start a farm right. I get that, and honestly, I've seen a handful of farms start with a little to no experience and do fine. Now, I've likewise seen a lot more fail too, because farming is complicated, like I said, so I recommend banking on the experience rather than winging it. Working on a farm won't just teach you the skills of farming, but will help you to know what parts of farming you like and don't like, or if it's even for you without any of the risk. It will get you prepared physically and mentally to farm, working on another farm, and teach you the requisite sense of urgency you need to be able to be successful. Obviously, avoid, if possible, unpaid internships. Try to work for farmers who can afford to at least pay you something, indeed, even beyond food and housing and education. And pro tip, get your experience in roughly the region where you want to end up, or at least in a similar climate, if possible. That way you can get to know the growing season and the local weeds and challenges and resources, materials, that sort of stuff. I see market gardeners hiring every spring. I know there are jobs out there because staffing is a commonly discussed challenge for farmers, even those who pay really well. Follow as many as you can in your area and on social media. Chat with growers at the farmer's market. We don't often have work positions open on our own farm, but social media and on our forum is where we would post those positions, so look at those things. Go work with a farm that you like with no preconceptions about what a farm should be, and just try to absorb it. Don't think of experience as setting you back and taking up precious time. Think of it as making your own farm startup more efficient and effective in the end. Indeed, you will get started faster and better if you know what you're doing and you have a little experience to bring to the table. Now, as you work on developing your farming experience, you can start gathering data for a business plan and a farm budget. This part could get really exciting, so don't say I didn't warn you. The budget and the business plan do not have to be separate things, but I think of the business plan as what the farm hopes to achieve financially and how the farm is going to achieve those goals and by when. Alternatively, the farm budget is nitty-gritty expense projections which outline how much the farm needs to earn. Again, there are a thousand ways to start a business. This is just my approach and a little of what I'd wish I'd known when we started. For the farm budget, the basic idea here is that like your family budget, you want to get the best numbers you can for what it will cost you to run a farm for the first year and then for an average year. This assumes, of course, you know what kind of farming you want to embark on, but in the buildup phase, which can take anywhere from one to 10 years, depending on your startup capital and experience and what kind of farm you're trying to start, don't expect to get the budget fully right. You have to work on it every year. Just be as thorough as you can in estimating these numbers. Now, for the business plan, there are plenty of templates online and some get into extreme detail, which is great, but unless you're going to be using this plan to apply for a loan or a grant, the first draft of the business plan is just for you. It's goal setting. It's to see what you hope to do written out. The business plan does not have to be an intense document. In fact, I suggest one page max to start. Even something like this, though these numbers are somewhat arbitrary. And that's a good start. That's good enough to see if what you want to do will cover your farm budget and what percentage of it will cover your family budget as well. Do the numbers work? They may not, which is fine. At first, you may just have to increase income, i.e. production or prices or services or whatever, more than you expected, or maybe raise some additional startup capital or expect to find some supplemental farm income just as you build, which brings us to the next step. Create a startup budget and raise some dang startup capital. So you will need to get a list together of everything you need to start a farm. Earlier this year, I started a real cost of starting a farm thread at the No-Till Growers Forum that I will link in the show notes so that I will not bore you with every detail here. But essentially, you need to get a rough idea of what materials and startup expenses you will need to get started. And then that will give you an idea of the startup costs. I recommend starting simple. You don't need to get the fanciest tools that are out there. Get to know your soil first and your markets before investing in the fancy tools because they may not end up helping you, but rather just locking up some capital that you could use for something else. A loan is one way to get capital and you can explore the USDA slash FSA loans by reaching out to your local extension agent here in the U.S. versus banks and the various ag lenders. Another is just saving a little and starting the farm slowly while maintaining steady work. I like this option of keeping a side gig because although it's obviously going to be a lot of work that reliable income takes the pressure off of having to produce a lot right from the jump. And then perhaps you can have a year or so to build infrastructure and get your gardens or fencing or whatever in shape, perhaps just on your weekends. There is absolutely no shame in having outside income, especially to start. But if you want to carry that on for even longer and take some pressure off of your farm, that's also fine. The stigma around outside income needs to just die. As long as you're happy and not overworked and your family is happy and healthy, then the farm business does not have to be the only thing that you do. It can be, absolutely. But diversified income streams are security and maybe you can get that all from your farm, but do what will offer you the life you want and the security that you need. Maybe that outside income is something totally different and fulfilling that balances your farming like writing and videography is for me. Conversely, yet other work can be in carpentry or plumbing or as an electrician, electricianing. So some other trade that will help inform your farming, that's awesome too. I mean, even waiting tables or cooking at a local restaurant to get to know the chefs and how they use the food could be helpful to the farm business overall. You know, maybe start selling that place some microgreens, legal ones or whatever, and start building up your product offerings from there. Whatever your side gig, it doesn't have to be something that takes away from your farm startup. It can just as easily assist in your farm startup, maybe literally, but also maybe just mentally. Okay, one step in all of this that I think is much easier to explore in the beginning stages than in the middle of running a farm is farm collaborations. Are there other people in the area looking to start a farm as well, who you can team up with and share the risk? Having multiple people with vested interests could greatly reduce your financial burden and stress load so long as everything is contractually and clearly outlined, of course. It is very common for businesses to have multiple partners, and I don't see any reason why farming should be any different. Just make sure the details are hammered out about the business structure and how it would be dissolved in case of needing to dissolve it and all of that stuff, and you just do that with a lawyer. But having multiple people involved could reduce your own capital burden while gaining other people who are willing to work hard and make the farm happen. The best employees are always those with a sense of propriety. Having partners who have literal propriety is certainly the ideal version of that so long as everyone is on the same page and good communication is worked on and maintained. The different models for collaborations are beyond the scope of this particular video, but check out our collaborative farming podcast with host Jackson Roulette for more on that. All right, now at this point, you probably need to find land on which to grow. Not the worst idea for a farm. I truly do recommend starting with a lease somewhere, especially if that lease is paid for with produce or meat or something, just an exchange. I like leases because they can be affordable, sometimes even free. Having a lease can help you raise and save money for potentially buying your own place or maybe just being able to retire. You can also, depending on where you are, perhaps lease more land than you can affordably buy yourself if your farm idea requires significant acreage, especially like grain production or livestock or whatever it is. Maybe you can rent more land than you can buy. Finding and evaluating land is a big topic that definitely deserves its own video, but that is where the experience you gained, right, can come in handy. No matter the situation you land on, I punted, didn't I? I didn't mean to do that. Whatever situation that you find yourself in, just make sure you are protected contractually. Yes, even if it's family land, maybe especially if it's family land, make sure that all parties involved understand with excruciating detail what the plan is, what it's going to look like, and that the landowner cannot just kick you off. They need to understand that. Protect yourself. Mulch is the armor of the soil and contracts are the armor of the farm business. And yes, you very well may end up improving soil that you can't one day own. And that's a bummer, sure. But the thing is, even rough soil, like what I'm working on here on our new farm, only takes a couple to a few seasons to get pumping again with proper management. So don't fixate too much on that factor. Take a lease with no option to buy as an opportunity to learn how to build soil fast and well, or maybe you live offsite and you can set up a nice home garden with perennials and such at a small home site, then treat your leased farmland like, well, well-loved but not permanent farmland. In fact, in some ways, that's how Hannah and I basically think about our own land. When we're ready to retire, we'll separate our little home area from the farm and hopefully find someone else to take the whole thing, the whole farmland part over if the kids aren't themselves interested. That way we can work on our own little home area with long-term vision in mind and then treat the farm as just sort of a farm, planting trees and such and let the farm continue with someone else for the long-term. Anyway, with a lease, make sure to get a five or so year lease to start so that your initial soil investment is at least protected. Honestly, there is so much I could add here like market evaluation, which you should obviously do before starting a farm. You don't wanna start another mushroom business in a place saturated with five other mushroom growers, but I'll let you all flesh out the details in the comment section so that I can go, well, farm. Huge thank you to BCS America for sponsoring this nerdily specific video. And of course, to our Patreon members who make this sort of detailed video literally possible. Like you will notice, almost every other YouTube video is click-baity. And the reason for that is that most content creators can't just create normal helpful content because it just won't get the clicks and ergo won't earn the money needed to cover the costs of production. Patreon and our sponsors like BCS make that possible for us. So anyway, consider joining our Patreon page and supporting BCS America to support this work. Otherwise, like this video if you liked this video. If you're not subscribed to this channel, make sure to hit the subscribe button. And if you are subscribed, you're awesome. Pick up a copy of the Living Soil Handbook or a hat from notillgrowers.com, which is another way to keep these videos rolling or just hit the super thanks button. That helps too. Super thanks for watching. We'll see you later. Bye. And focus and focus and focus and focus. Oh, I've been recording, okay.