Sep 032013

Financing your farm dreams

Oftentimes, when thinking about owning a hobby farm we dream of beautiful rows of gorgeous crops, a quaint barn and hordes of customers waiting for our farm gates to open.  This dream is real and can come to fruition. However, there is some proactive work that needs to be done before you can accomplish this dream.  One of the first, and possibly the most important action, is taking stock of your financial resources.  Depending on your dream and the size of your property, your cost estimate to start your farm enterprise is very important to know.  Take out a sheet of paper or open up an excel spreadsheet and lets think of the bare essentials you will need to pay for.

Land, seedlings or animals, fertilizer, a barn or shed to store equipment or animals, equipment (i.e. tractor, rakes, hoes, shovels, hoses, drip system or sprinklers, wheelbarrows, gloves, etc.), marketing supplies, computer, and an accountant and bookkeeper are all things that you should consider when you are thinking about opening up a farm. These are just the tip of the iceberg, but when added up they can be quite eye opening. It is important for you to write down all the necessary things you will need to start up and pay for until your farm goods are ready to sell.  Knowing this number will help you decide how to pay for the investment in your dream.

Now that you have an estimate of how much money resources it will take to start your endeavor, let’s talk about how to raise that money. There are a variety of ways to raise the capital you need for your dream farm.  One way is to save any extra money out of your household funds and put it into a bank account or investment that will earn you interest.  Another alternative is to ask for a loan from family members or a bank. You could ask for friends and family members to invest in your dream with the explicit intention to give them their investment back with some type of return. The third major option you have is to look into grants.

First let’s say the income that you have at the moment is already allocated to running your family household and that there is not much extra.  How can you save for your dream?  Many beginning entrepreneurs do not have a good grasp of the amount of money they need to start their business and how much they truly need in order to have it bring in the income they so desire. This is where researching the cost and materials going gung-ho is going to pay off.  It will help you prepare a timeline of your finances and give you an idea of what to expect in the future. Also, when you are ready to begin building your farm, have a source of outside income coming in while you are learning the ropes of beginning your farm.  This allows you a buffer if something does not go as smoothly as planned.

If you are comfortable with the idea, loans can be a great way to get your farm up and running fairly quickly.  The most common type of loans are usually given by the bank, but loans from family or friends can also be an interesting and if need be flexible alternative can work only if there is a written agreement as to how the loan will be repaid and what type of return will be given. Remember to create a timeline of repayment that is reasonable for the lender as well as for you. It may take you awhile to learn the ropes of selling your crops quickly (for more details on how to do this go to  While a loan from friends and family can be flexible if things don’t go the way you anticipate a loan from the bank will not usually have that flexibility.  However a loan from the bank is not emotionally charged like a loan from friends and family and could allow you to borrow larger amounts of money. Knowing that you must succeed in order to make the payments or ruin your credit history can sometimes be a beneficial motivator when times get tough and can catapult you to success with your business.

Something to consider as a way to aquire income to start your farm dream is Grants.  The beauty of grants is that you don’t have to pay them back.  Its free money.  Finding the right grant or grants can be like finding a needle in the haystack.  There are many websites out there who claim they can help you find the right grant but they want money upfront and there is usually no guarantee of acceptance.  I suggest you go right to the source of most grants, the United States government.  A good place to start is .  From there you can follow links to other options for government grants and there are many of them. is another website with loads of resources to get you started.

Your entrepreneurial farming dream is just around the corner.  Can you feel it? See it?  Proactive planning and education will get you there.  Start by writing down what you will need to get started then look at ways to garner the finances necessary to start.  Don’t forget that following in the footsteps of someone who has been there and done that can actually get you a head start and save you money.  Go to my website  for more information on how you can make your farm successful.  I wish you and your dreams the best start possible.

 Posted by at 12:39 am

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