You will need to finance this out of your own pocket or with a grant or with money from friends and family (I do not recommend this because they won’t get a very good profit off of your endeavors, if you pay them back at all). So here is the reality - you better have very cheap or free land and a very good source of cheap water. However, this may be changing, as more and more investors are now taking on projects that they believe in, meaning that if you can position yourself as a mission-driven opportunity, you can stand out. While some farmers can turn to equity investments, these are difficult to get and often targeted toward large firms if you need to raise anywhere from several hundred thousand to several million dollars, or even less, your options are limited. Department of Agriculture offers loans to farmers, but they are optimized for land and row crop farmers, rather than urban agriculture. Financing: Farming, whether traditional, in a greenhouse, or on a rooftop, can require a significant amount of capital to get started, and the outdated agriculture financing system in the United States only makes matters worse. Like with any business, there is basic math involved based on your size and production rates. It is also important to know the potential revenues and profits of a small farm - mainly, that they won't help you get rich quick. While knowing how to grow produce is the first step, starting a business requires a basic understanding of financing, administration, crop types, business models, finding customers, labor, and harvesting and packing. Urban Farming Education can help with this process and has firsthand knowledge that can help an organization avoid many potential points of failure, since we have been there ourselves. That is because you don’t want to invest too much money before understanding the magnitude of the project you are taking on - which requires more than just a knowledge of farming, but also accounting and marketing to be successful. With that said, we suggest that if you are considering making your farm profit-oriented, try running the operation as a hobby first to learn about the tasks and skills needed. Moreover, I didn't focus much of my attention on the Community Garden because of its small scale, since I had a much larger and ultimately profitable landscape business to manage. In retrospect, the cost of building the infrastructure for Agave Farms was too high, as were our labor costs our farm manager did not have enough experience, and neither did the people we hired to build and maintain the farm. That means marketing products well, being extremely efficient, prioritizing your bottom line, and taking meticulous records that you can later analyze to make changes. However, farming on a small scale can be successful, as long as you approach farming as a business and not a passion project. Others run into difficulties because they follow their hearts and approach farming as a lifestyle rather than a business - planting crops without a specific market for them, taking on too much land at once, or not planting densely enough. However, small farms can grow a higher-quality organic product that is more nutritious and delicious and can command higher prices for the discerning buyer.įarmers often struggle to make a living off of farming alone recent USDA data show that most rely on off-farm income, mainly due to the high cost of land and equipment and the lack of an efficient distribution system for small farmers. What we found is that small farms cannot compete price-wise with large commercial conventional farms, which do things at a larger scale with expensive equipment and chemicals. We thought it could be just one of many types of services we could deliver at our venue. ![]() We had some idealistic passion, but not a pragmatic business plan for a for-profit business. We did have a business plan, but it did not include the due diligence it needed to be executed well. We never researched the market before we started growing and didn’t have much knowledge of farming for a profit. Like many urban farmers, we started Agave Farms at too large a scale, grew too many varieties of produce, and tried to do too many things at once, incorporating a retail and wholesale nursery as well as a community event space. However, if you decide that you want to run your farm as a business, you suddenly have an entirely new host of considerations to keep in mind. Urban farming can potentially be a profitable enterprise, as it benefits from easy access to markets, low start-up and overhead costs (if you don’t buy the land), better growing conditions (due to the urban heat island effect), easy access to water and less competition from native plants. Urban Farming for Profit and the Small Farm Movement Written by Mike McMahon, Founder of Urban Farming Education
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