Dear Aggie

I want to transition from hobby farm to small business, what are some of the things I should consider first?

Whether you’re already selling a few agricultural products or you’re starting from scratch, taking the steps into a bon-a-fide business can be daunting but also exciting! You’re already on the right track by trying to do some research and asking questions before you dive too deep. My biggest piece of advice – PLAN. Make a plan of attack before you just start buying supplies, or worse, land. Often times, people consider things like the name of the business or what they might sell, but don’t think about other really important business aspects like taxes, financing, scalability, pricing, and ownership. All of these topics, and so much more, are vital to the success of your business and it will be extremely beneficial to your long-term success if you take a little bit of time to plan beforehand.

The first thing you should consider is what you want to do and where you’ll do it. This is the logistical aspect of starting an agricultural business that really determines if you can even be a business or not. For example, say you’ve decided you want to raise beef cattle – where are you going to do that? Do you have the appropriate land and infrastructure to care for the animals? You can find part of this information by seeing if your land is zoned as “agricultural land” on the Jefferson County NY Agricultural District Map. You can also contact your towns zoning board for more information on what’s allowed on your land. If you’re growing any crop, you’ll want to do a soil sample and make sure the ground is viable for the crop you want. You’ll also want to make sure you have proper access to infrastructure like water and electricity to support the product you want to raise and the quantity you’ll need to raise to make a profit.

Once you know for sure it is logistically possible to grow the amount you want, you’ll need to consider some financial and business factors. Talk with your family about the investment you’re willing to make to pay for the start-up costs. For guidance on these financial matters or help with mediating family communications, contact NY FarmNet for free, confidential services at www.nyfarmnet.org. Plan ahead and consider the fact that most small businesses don’t find profit for years after starting.

With starting a business there are also tax implications to consider. You’ll want to speak to a financial advisor, accountant, or a tax professional to understand how these decisions will impact your tax liability at the end of the year. These professionals can also help you make a plan for recordkeeping and set you up for success when it comes to the business management portion of selling products. You should also consider getting additional education on business matters or more direct education on the products you plan to sell. Contact the Cornell Cooperative Extension of Jefferson County at 315-788-8450 or at www.ccejefferson.com to learn about one-on-one technical assistance and courses being offered.

Last updated October 9, 2024