Advice on setting up a minifarm for profit

About that business plan? You might look at whether or not a tractor would pay to own.

For example, if you were selling 3 acres of vegetables you would likely need a tractor, AND if you were good at marketing the veggies would pay for the tractor. But, how many goats would you have to sell to pay for the tractor?

Tractors can be used to cut hay: would the worth of the hay pay for the tractor? Would the tractor be paid for if you added income from veggies?

I am a little vague about other money-saving opportunities a tractor would bring in because I do NOT own one: my 1 acre homestead will not support a tractor. A tiller is more cost effective and therefore a better business decision.

When you look at the numbers your OWN business decision might be very different than mine. I cannot raise enough to justify a tractor, but, depending on what you decide to do a tractor for you might be profitable.

I had the idea that I would have honeybees so that they would pollinate my plants and produce gallons of honey I would get rich selling. I bought several excellent books on beekeeping. I enrolled in a very good course in beekeeping. I joined the local bee club and visited different bee yards. I bought hives with bees in them from a friendly beekeeper who helped me set them up facing east in a nice spot on my land. I bought bee suit, hat, tools, a smoker and various other essentials. I invested in special new buckets for honey and a comb cutter and pretty little square boxes for comb sales plus nice little bear bottles for honey sales. Oh, yeah, did I mention the smoker?
There is a LOT to learn about a profit-making farming venture. It can be fascinating and fun.
What I learned that wasn't mentioned in any of the books or courses is that bees are conscious beings. I would bring them water and they would come out to meet me. When they decided to swarm, I caught and rehived some, but the next swarms went way high. Up in a tree so I couldn't get them. I dearly loved my bees. I spent a lot of time and money on them. I never regret that. But I never made any money on them. I got terrible asthma attacks from the smoker (I'm told some people spray water or vinegar but smoke works to calm bees and I thought it was gonna kill me!). Something killed all my bees. I don't know what.
I have an Alcatraz of a poultry pen but some wicked, cunning creature just massacred my flock of young chickens and ducks.
What I am trying to say is what other folks on here are saying, there are ways to learn about business plans and choosing farming ventures which have probably occurred to you (books, seminars, workshops, courses, ag agents, farm tours, business courses) but there is always an element of the unknown, predators, weather, diseases, thieves plus the factory farms. You can buy a nice cooked chicken at sam's club for a whole lot less than it will cost you to raise one!
So when you are structuring your business plan, be sure to factor in not just how much money you can make (because there's a good chance you will lose money) but also the opportunity to learn and the pleasures and experiences you can share as a family with your goats, bees, garden and even the mental exercise of drafting your plans for a business you create for yourself as opposed to a job where someone else directs your activities.

If this is truly all you want your wife could supplement your income today by babysitting. You wouldn't have to wait a couple of years and it'd be a heck of a lot easier on your wife's back.

Who is going to watch your children while your wife is running a business? Babysitting sounds to be truly the easiest, best source of income for your family. You can garden yourself on the weekends and take care of the animals before you go off to work each day and then do chores again when you get home.

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Moms don't look at things like normal people.
-----DD

I think it is great that you want to form a business plan. It doesn't have to be for anyone but yourself. If this kind of organization is what makes you comfy, go for it. I did a basic myself and I don't want a loan, am not applying for grants,.etc. It's just for ME.

I think you need to scope out your area and see what people near you WANT/NEED. What slot can YOU fill? It is great to think about goats and goats' milk. Nigerian dwarfs are NOT the ones I would think of for goat's milk. BUT....if folks in your area are interested in them and you can find that market for them.....THEN is when you invest in NDs. If you can find the produce that is needed in your area, your marketing plan just got a LOT easier as did turning a profit. People will come to YOU rather than you having to seek them out.

I live in the middle of fruit heaven. Within 5 miles I can pick any kind of orchard or small fruit (other than citrus). Clearly, it would be very hard for me to make money with a few apple trees. It is also difficult to get animal feed....but folks surely snapped up my sheep. What do they sell at the Farmer's Market near your place? I go to a FM and every one sells the same things. I, and many others, make a beeline for the stall that has something different. In TN, the busiest stall was the grass fed beef.

You do not include your area, that makes it very hard to give good advice or specifics. For example - it is illegal to sell raw milk of any kind in Michigan - it is also illegal to GIVE it away even for pet feed. You need to know something like that before you invest in a herd/flock? of ND goats you want to milk. In some areas you can get $5 a dozen for organic eggs...in others you are hard pressed to sell them for $1.50. If you want good help and advice, you need to give us a general AREA.....I know how nervous I was about that years ago...but honestly, we don't care where you live.

Some other things you might consider
raising vegetable seedlings
small fruits - pick your own even
raising fish or shrimp
raising replacement heifers/started steers
hormone free turkeys
fleece sheep

You guys need to cut the crap about his wife not handling the work. I DO ALL the daily work here. Dh will kick in if I need to be gone; builds whatever I need built, and funds my efforts.....but I do the actual WORK. I don't think his foot has pressed the earth in the garden yet. He is always behind me- always supportive but it is me with the boots in the muck, tipping over sheep, giving shots, etc. He does what he can to make it as easy for me as possible but his job keeps him away, sometimes even out of the country. Our DS 9, helps me. In fact, he is running the egg business and feeding the sheep.

http://beginningfarmers.org/farm-business-planning/

We have a profitable farm.
Find your niche.
Grow slowly.
Do it well.
Make a business plan.
Understand the plan will change.
Live frugally.

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SugarMtnFarm.com -- Pastured Pigs, Poultry, Sheep, Dogs and Kids

We have a profitable farm.
Find your niche.
Grow slowly.
Do it well.
Make a business plan - Understand the plan will change.
Live frugally.
It takes time.

__________________
SugarMtnFarm.com -- Pastured Pigs, Poultry, Sheep, Dogs and Kids

That's perfect advice!

Really good advice from Callie too! I think the biggest thing I would do right now if I were you is research your market area. Finding your niche is hands down the biggest thing you need to do if you don't want to waste a lot of time and money. There are a lot of good marketers out there hawking the next big farm ideas in plants and especially livestock. And so many of them have come and gone and the only ones who made money were the marketers!

So like Callie said hit your local Farmer's markets and see what they don't have that you can do. We wound up selling baked goods because there was a huge want for whole grain organic breads and nobody selling them. I happen to be good at it too but it wasn't our first idea by a longshot. We never would have thought about taking the stuff I baked for family and friends out unless we had sat there for a few weeks and seen a real need for it.

The replies you have had have all generally been geared to supporting your concept but if you search through the archives on this forum, you will find lots more help. In part, if you state your area, then people will be able to give you more specific information geared to your climate. In the fire department, you have specific hours when you are on and off duty. When you are on duty waiting for a fire, you have a good time cooking and eating famouse firehouse meals, or your chief makes you exercise your body or take classes for your brain. You have a set amount of $ zeroing in at set times.

In farming, it is all different. You make a series of choices (land, appurtenances, etc) and the universe gets to play wild card with you as to weather, predators, neighbors, etc. So folks on here, who generally are helpful, cannot do a power point presentation for you as to what would work and what will not.

There are organizations in various parts of the country which put on wonderful seminar courses to cover many of the points you raised. They feature a good workbook, syllabus, and bring in local successful farmers to share some of their secrets. One of these organizations is the New England Small Farm Institute. they have a course "Exploring the Small Farm Dream: Is starting an agricultural business right for you?"

As has been pointed out, we don't know where you live but if you contact www.smallfarm.org you would be able to buy their workbook and worksheets for self-study. If you posted your location, perhaps you could visit some members on here who are already successfully doing what you want to do (if only you knew what it was). Perhaps you could work out an informal internship, bartering some work for knowledge and experience? Hands on is often best. (As I learned about the bee smoker and my asthma).

In terms of your overall concept and original questions: "I know that I will need to draw up a business plan.

* What are some good resources to help me figure out how to do that?"

Your local community college, the retired businessperson volunteers with the Small Business Association, somebody already doing what you think you want to do. I googled about business plans and found some nice ones ready-made on the internet for various businesses like photography, dog boarding, etc.

* Where do you go to research market demand and all of that kind of thing?
A very good question. There are firms you can hire and pay big bucks to do that for you. Why do I get the feeling they might not come back with a report you could make big bucks in minifarming? Otherwise, informal methods as suggested here, go to the local farmers market and see what they do NOT have and then figure out if they don't have it because nobody thought of it or because somebody tried it and failed! An important crucial part of your research, as was pointed out, is the government regulations. Part of your research should include reading all six of Joel Salatin"s books, and the best one for you to start with might be "Everything I Want to Do Is Illegal!"

Here in Virginia from Virginia Tech and other places there are Food Entrepreneurs Workshops and half is about making $ and half is about government regulations. As has been pointed out, with regard to goat milk or raw milk, you can be shot out of the box right there!

* What are some cardinal "do's and don't's" of running a mini farm business?
Don't count your chickens or goats or honeybee production or earthworm population or whatever until it is hatched, delivered, produced, in hand!!! Make plans but allow lots of leeway for surprises.

* What kind of insurance is required or recommended for such a venture?
Farm Bureau sells insurance but I have never had any kind of insurance other than mandatory vehicle insurance because it isn't just having insurance, it's being able to collect on it if you need it. Based on my observation, insurance companies are one-way street businesses.

* Are there any grants available for such business ventures?
Sure, but you would need to have established a track record or have something very unique that someone is interested in and wants to fund? I know a lady with a greenhouse and tomato-growing experience who was able to garner a grant to experimentally raise goji berries. That gets you back where you came in, research!!!

Good luck. I saw where you posted questions about tractors and received some very helpful, specific answers. A tractor is not something I could even think about since I have no mechanical knowledge or skills. I expect yu will find that if you post simple, specific questions, you will receive some very pertinent, helpful responses.

If you live within spitting distance of a metropolitan area, and can raise a few specialty crops, you might eventually make some money, selling to people with lots of disposable income.

If you don't have any experience, and any infrastructure, I wouldn't really be worrying about profits and business plans... or IRS audits... like the others said, keep a shoebox with all your receipts (bills).

The only way you'd make guaranteed profits is if you were growing that certain #1 crop of California and Oregon.

Unless you have all the equipment and land paid for, it'll be a while before you realize any profits... if your honest with yourself and log in every hour (or fraction thereof) you work on your crop, you'll be ashamed of the 'profit', if you think of wages as profit. One of my full time farming/ranching relatives grosses in the mid 6 figures... once the bills are paid, and the 'profit' divided by the seven days a week, 12 -18 hour days, the wages (or profits) drop to less than half of McDonald burger flippers. Of course, through their work, they've acquired ~3M in agricultural real estate.

Go to the local markets (farmers and a/c'd grocery stores) and see what's popular. Try to grow some of the same items, and try your hand at the farmers market.

I wouldn't borrow too much (if any) money, especially not against your land (unless it's mortgaged already), otherwise you could lose it if the crops fail. There are zero guarantees... you can do everything right, and an Act of Nature can wipe the slate (and your finances) clean, in mere moments.

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Luck is what happens when preparation meets opportunity. Seneca
Learning is not compulsory... neither is survival. W. Edwards Deming

Here are a few good resources for writing a business plan:

SCORE: http://www.score.org/business_toolbox.html
you can also get free help from a SCORE advisor (setting up your business, writing your plan, etc).

SBA: Great place to start and they have an online course if you are so inclined.
http://web.sba.gov/busplantemplate/BizPlanStart.cfm

Canadian website but has a nice outline to follow and excel spreadsheets:
http://www.bdc.ca/en/business_tools/..._purpose=Basic

QUOTE=shanzone2001

My children wanted ways to make money, so they both chose something they were interested in. My daughter chose chickens and my son chose pigs. It has taken quite a while to get enough laying hens to produce more eggs than our family consumes, but my daughter sells the extras and she does make a little money after I deduct the cost of feed and egg cartons. Also, we will need to buy new chicks every year to replace the older hens who stop laying (and become stew).

Did the "household" pay the child's "business account for the stew chickens?

I bought a freezer pig for "practice" and once it is butchered, my son wants to buy a male and female to breed and sell piglets for profit. He is also considering raising one in 4H and selling it at fair. We will see!

4-H is an excellent way for your son to get started! He will learn a lot and the hog he sells at the fair will bring an above average price to help him get started.

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This is sort of ironic to me, no offense

From a business standpoint is is very important to make a business plan. Business plans are not just good for when you need to "prove" something to someone, they help businesses stay focused, and on track. For someone like me who tends to get sidetracked on various projects a business plan would be essential.

Since the OP specifically said he wanted to do something that will make a bit of extra money so his wife can stay home, I don't think the "jumping in with a couple goats" would be the right thing.

Knuckledragger, my best advice to you is to do what I am doing - look and look and research and research some more. I don't know much about goats but I have researched my little brain to exhaustion the last few years preparing to move out to our property. I still don't know what I am going to do. It sounds like, however, that you have a focus - so that's good, and run with it. What can you do with goats? You can make soap, cheese, sell the milk (depending on where you live) and of course breed the goats for show.

So next is to talk to people in the industry and see what they think. I used to own a soapmaking business and I can tell you it is difficult to make a significant income on something that has a low $ per item cost, especially with the cost of the materials. See if you can find some local cheesemakers and interview them. Try out making cheese in your kitchen. Try making soap. Visit some goat farms to see what they do, and what the work involved would be.

And then when it comes down to it, the most profitable enterprise should win. And keep it there. I think a big reason why people don't always show profits is sometimes they spread themselves too thin. There's a different between running a small business and selling something that you make in your hobby. And if you are going to look at it as a business, you need to be prepared to follow through as a business. So, if you don't particularly like making soap but really enjoyed making cheese, there's the answer. And then pick something and stick to it! You can obviously do complementary enterprises as well.

For instance, my mom and I are going to experiment with pastured meat chickens this year. I also compost with worms, and so once I move up there I will try and expand my worm operation to selling the worms, compost, and also providing feed for the chickens in the form of worm protein, and then of course the processed chickens. However, I have the advantage of a certified mobile processing unit that will just cost $1 per chicken to process, and if I am able to produce a significant amount of feed myself in form of worms I might get somewhere. The two sort of work together.

Except the key is - I haven't butchered a chicken yet. I need to get up there and do that before I will make any decisions. I'll do it one thing at a time. If I can do the butchering then I'll try a batch of chickens for our use. If I can do a batch of chickens I'll raise a bunch extra and sell them. Once I'm solid with that, I could think about also selling baklava at the farmer's market, or even starting up a CSA. There's lots of options but I think my biggest thing is FOCUS.

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No offense intended, just a little thread drift curiosity question here. Does your daughter buy the chicks? You said you deducted for feed and carton costs, if she also pays for the chicks is she compensated for the value of the eggs the rest of the family eats and does she receive any payment for the stewing hens the whole family eats?

As a teen I ran a produce business specializing in Watermelons, pumpkins, Peas, corn, and Okra. I sold most of my stuff to customers that would drive 50 miles from the nearest city to purchase specific items. After the second year and good word of mouth I built up a list of individuals and businesses that were my customers and waiting for me to call them when I had their specific produce. Some people may have been 2 bushel pea buyers, but thar neighbor wanted a gallon of Okra. Word of mouth and excellent customer relations go a LOOOOOooooong way.

I also agree with the people to who suggest creating a business plan. I have talked extensively with the business department at the local University (hour away) and they say there is ALOT of federal money that is being spent helping get new business people pointed in the right direction, and that tends to start with researching the market, building a business plan, and being strong enough to show it to other people. Be flexible, relax, and do what you love.

You don't mention how much land you have or what equipment you have, but I would venture to say that without enough land not only for pasture but also to produce your own hay, and the necessary equipment, goats just will not be profitable. We raised both meat goats (boer) and toggenburg dairy goats and at times broke even, very rarely made a profit. We had between 20 and 40 at a time, had plenty of pasture, and were able to produce our own hay. In other words, almost no input costs, yet once we calculated time spent, land taxes, etc, we were making somewhere in the neighborhood of $2-$4 an hour. After 7 years of goats, we sold the whole lot, and now sell the hay to "minifarm" goat people (who always talk about their hope that someday they can make a profit on their valuable goats)! I guarantee you we are making more money selling them hay than they will ever make selling goats or goat products! Plus hay is much less time comsuming, meaning just a few hard days for a lot of profit, where the goats were constant and took time every day, good or bad weather. It may not seem like much but spending an hour a day means 30 hours a month; I would say at $10 an hour you would be lucky to make $300 a month on those goats, over your input costs... We make more $$ selling the hay than feeding it on farm, and selling livestock products. Since we have a lot of land we kept the cows and have increased the herd to fill the void left by the departure of the goats. All I'm saying is that any minifarm is a hobby unless you can sustain the animals solely on the production of the farm. You won't make enough profit to compensate for both time involved and purchased inputs, all your profit will be consumed by input costs.

I would say as far as profitability (again you haven't mentioned land and equipment assets) that providing either a necessity product (hay) or a vegetable (maximizing profit per acre if land is limited) would be the most profitable. Having done both, I can say that on a per acre basis selling hay is more profitable (considering both inputs and time) than raising animals on that same acre. Perhaps the exception to this would be Agmantoo's style of grazing cattle on large acreages which would be impossible to manage in any other crop without additional labor. He has maximized labor efficiency, I'm advocating maximizing profit per acre. Large acreages make the most profit on a little time, though not producing the maximum $$ potential per acre. You simply cannot make a profit if all feeds need to be bought. That's my comment on the goat idea!