Many farmers are more than happy with their small farm businesses that bring in enough profits for them to survive. But what if you could expand your modest farming enterprise and enjoy all the perks of a thriving enterprise?
If you’re in the farming business for the long haul, it is wise to consider widening your operations and focusing on expanding your business.
Before expanding your farming operation, here’s what you need to do to make the best of your farm land loans.
Research The Zoning Regulations In Your Area
You will need to research the local zoning ordinances to determine whether or not the area in question is zoned for agricultural production and whether or not your municipality permits the production of crops or animals at the location in question.
Before taking this step, ask the local township to determine which licenses, permits, and approvals are required. Also, check with your local Cooperative Extension or the township to see if they have any data about the land’s suitability as farmland and if it has adequate water supplies. Finally, find out if there are any limitations on selling your products at the location you are considering.
Consider The Environmental Impact Of Your Actions
Be a responsible steward of the land and consider how your expansion might affect the surrounding environment.
As your business expands, it’d be best to consult county engineers, the Department of Natural Resources (DNR), and the Department of Transportation (DOT) to find out how to safeguard the natural environment better.
Granted, some environmental practices might be costly, but they will give you better results in the long run. If funding is an issue, you can apply for farm land loans. Know all your options, then plan your move accordingly.
Start Hiring More People
You’ll need a bigger staff to cater to the growth and diversity of your farming enterprise. That’s because attempting to handle everything on your own will likely result in sloppy work.
So, if you’re planning to add more employees to your company, hire skilled people to assist with the increased workload and maintain product quality as you grow.
Moreover, follow OSHA guidelines if your company has more than 50 employees. Also, make sure to get adequate insurance to protect your employees and your business. It is important to remember to account for these expenses when looking into farm land loans. Put together a plan of action so you don’t get trapped in a compromising position.
Set Up A Contingency Plan
Running a small farm usually means selling your goods in the immediate area. But if you want to grow your enterprise and make more money, it’s time to broaden your reach.
You’ll need to find new customers in far-flung locations, sell more, and increase the awareness of your products. This is key to your company’s growth and guarantees a market for your surplus goods.
To meet this increased demand from your expanding customer base, you will need to make a preliminary investment in a production increase. Make sure you have enough resources and a proper contingency plan to execute if your original plan backfires. If you’re lacking funds, apply for a farm land loan beforehand so you don’t get stuck in the middle of operations.
Think About The Farms In Your Neighborhood
A typical farm in 2019 was no bigger than 444 acres, representing a slight increase of about one acre from the previous year.
Farms are growing bigger and better with time, but what does it mean for smaller businesses in this industry?
Will the expansion of your farming business impact the people who live nearby? If you have reason to believe that their resources and farming practices might suffer, inform them of your plans as soon as possible.
Also, while you expand, give some thought to purchasing the farms that are nearby. You might be able to do so with the assistance of a farm land loan. The acquisition of that additional land is the deciding factor in whether or not a farming operation will remain on the amateur level or advance to the professional level. If you have the necessary knowledge, you will have no trouble paying back the fees associated with any loan.
Ensure Finances To Back Up Modernization
Technology is a crucial factor in expanding a farming business. There is a lot of cutting-edge equipment on the market that can improve your productivity and automate tasks while cutting costs. However, if you don’t estimate the cost of modernizing your farm correctly, all investments can go to waste.
Moreover, you also need to decide on its running costs and the finances you’ll spend on the personnel to run it. While investing in cutting-edge tools like these is crucial to letting your company thrive, it is also critical to do your research before making any move.
Once you’re done calculating the amount of money it’ll take to modernize your farm, apply for a farm land loan to make your vision a reality. You will be able to make up for the payments on the loan with the increased revenue that your farm will generate as a result of the modernization.
Mitigate The Risk Of Increasing Traffic
When you invite the public onto your property, you open yourself up to a new set of liability concerns.
You will need to post signs to make visitors aware of any potential dangers that may be present. Is your company in compliance with the ADA? Where can people go to get their hands washed or use the restrooms? This also applies to the increased number of employees you will need to make plans.
Planning for liability insurance is always going to be something that is required of you. When expanding your business, the last thing you need is to be forced to pay for accidents out of your personal funds.
As a farmer, you likely do not shy away from new opportunities.
You may be currently thinking about ways to increase your company’s revenue. This expansion could take the form of commercial activities such as hauling the grain of other people, custom spraying, seed conditioning, agritourism, or even a farm stand.
However, there are a few things you need to take into consideration to ensure that you are not leading your company in the direction of an unsuccessful outcome. To summarize, it is essential to conduct adequate research and check to see if you have access to the necessary resources before moving forward with an expansion.