| Walla
Walla Agriculture EVALUATING
YOUR GOALS & LIFESTYLES
“For Farm entrepreneurs, the opportunities for a farm family
business have never been greater.” (Joel Salatin, You
Can Farm, Polyface, Inc 1998)
Are you thinking of starting a farm based enterprise? Maybe a
pastured poultry operation, a market garden, or a home bakery? The
times are changing and many are saying it’s time to make a
change. Whatever the enterprise, there are questions to be asked,
and pitfalls to be navigated to develop a vision and see it succeed.
These are questions best asked and answered by the whole family
and everyone involved.
This fact sheet will provide you with a brief overview of the business
and production aspects to consider, and the types of questions to
ask before you begin the venture. More detailed information may
be found in the resources listed at the end.
Personal and Family Considerations
So you have a dream of farming. What does it look like? Where do
you want to be? Does your family share your enthusiasm? Does it
mean moving? Making lifestyle changes? Do you have the training,
skills, and the experience necessary to be successful? After your
new enterprise is established, what amount of family living income
would you like the new enterprise to contribute annually? What special
features does the family want the enterprise to possess? (level
of risk, labor requirements, seasons, use of special skills or resources,
etc.) Evaluating these questions ahead of time will go a long way
towards maintaining your quality of life.
Identifying Alternatives
What opportunities show promise for your situation? The first step
in the process of identifying alternatives is doing a resource inventory.
The purpose of a resource inventory is to show the limitations and
opportunities presented by your current situation. A complete inventory
includes five areas, and a set of questions to consider for each
area:
- Physical Resources: (their quantity, quality,
limitations, are they underutilized?)
- Buildings
- Tillable land
- Pasture
- Woodlot
- Machinery/equipment
- Marketing Resources: (their capacity, distance,
limitations, potential)
- Processing
- Wholesalers
- Directmarkets
- On-farm sales
- Slaughterhouse
- Nearest town(s)
- Population with 30 mile radius
- Management and Labor Resources: (seasons available,
hrs/wk, skills, underutilized)
- Management
- On-farm potential labor pool
- Benefits you can offer employees
- By-Product Resources: (their quantity, quality,
limitations, potential uses?)
- Animal by-products
- Crop by-products
- Chemical wastes
- Processing by-products
- Machinery and tires
- Financial Resources: (source, amount, details?)
- Cash
- Saving
- Family credit
- Commercial credit
As a general rule, successful enterprises avoid resources that
you don’t have and take advantage of un-used or under-used
resources. Evaluating these areas beforehand will save a lot of
time in missteps and will point out opportunities that were unnoticed
before.
Production (Can
it be done?)
By evaluating an enterprise you see what the production aspects
are and where they overlap with your resources. Production requirements
to evaluate include:
Climate
Soil
Water
Buildings and facilities
Machinery and equipment
Management and labor
Additional production requirements
Some decisions that need to be made regarding production are: quality,
production rate and business size and last but not least,
regulations and liability factors. What are they?
And how will you deal with them?
Sources of production information include: Extension
production budgets and publications, trade organizations and producers,
and government offices.
You should now have a clear idea whether your requirements match
your resources. If your available resources cannot adequately support
the enterprise, development may not be feasible. However, many production
problems can be overcome by hard work, capital inputs, or ingenuity.
Profitability (Will
it make money?)
To project whether the new enterprise will be profitable, the farm
manager should complete an income statement. An income statement
lists projected receipts and expenses, and then yields a value for
net farm income. After the income statement is completed, a sensitivity
analysis can measure the effects of changes in key factors, such
as yields, prices, and profitability. For instance if you raise
or lower the price of carrots 5 cents/lb., how will that affect
the quantity you would have to grow to make the same profit?
Financial Feasibility
If you establish the new enterprise, will you have enough cash
to cover operating expenses, family living needs, and debt payments?
To answer this question you will need to complete a cash flow statement.
Completion of a cash flow statement will enable
you to determine the amount of capital needed to finance the business,
as well as the repayment ability of the business if money is borrowed.
If necessary, sources of financing should be identified. Once potential
lending sources are identified, develop a loan proposal,
which includes a business description, marketing plan, production
methods, service summary, income statement , cash flow analysis,
net worth statement, resume, and other supporting documents.
Making a Decision (Will you start
the new enterprise?)
If you have found an enterprise that seems feasible, it is time
to gather all family members, or others who will be affected by
the final decision, to fully review and discuss the results of the
evaluation. Ideally everyone will have been involved in the process,
but the person responsible for the research should present the findings
to the rest of the group. This presentation is good training for
applying for a loan. However you make the decision, consensus or
majority, everyone’s concerns need to be heard so that they
can continue to express needs and opinions in the future.
If you decide to go ahead with the enterprise, you can look forward
to a very exciting and challenging endeavor. You should now develop
an implementation plan, including a development timetable, production
schedules, marketing plan, management structure, and a financial
plan. Also think about how you will evaluate the progress of the
new enterprise.
For more information, contact WSU Extension, (509) 524-2685 or
email John Fouts at fouts@wsu.edu.
Resources
Farming Alternatives, Northeast Regional Agricultural Engineering
Service; phone: (607) 255-7654
You Can Farm, An entrepreneur’s guide to start and
succeed in a farm enterprise.1998. Joel Salatin,. Polyface, Inc.
Virginia. Acres USA; phone: (800)499-3201
Center for Holistic Management
1010 Tijeras NW, Albuquerque, NM 87102
Phone: (505)842-5252
Fax: (505)843-7900
http://www.holisticmanagement.org
center@holisticmanagement.org
Farmers Markets
Walla Walla Farmers Market 2006
Beginning Saturday mornings, May 6 & Thursday evenings, May
18
Thursday evening at Heritage Park on Main from 5:00 to 7:00 p.m.
Saturdays at Rose & North 4th Ave. from 9:00 a.m. to 1:00 p.m.
for more information write,
Walla Walla Farmers Market
5 South Colville
Walla Walla, WA 99362
Aimee McGuire, manager
manager@wwfarmersmarket.com
http://www.downtownwallawalla.com/promotions/farmersmarket.htm
Useful Publications
Growing for Market
http://www.growingformarket.com/frame2.html
PO Box 3747
Lawrence KS 66046
News and ideas for market gardeners
Small Farm Today
http://www.smallfarmtoday.com/
3903 W. Ridge Trail Rd.
Clark, MO 65243-9525
Phone: (800) 633-2535
Dedicated to the preservation and promotion of small farming, rural
living, sustainability, community and agripreneurship.
Business Assistance
Port of Walla Walla
Small Business Administration
310 A Street
Walla Walla, WA 99362
Counter services available by computer kiosk with toll-free phone
to speak with a customer service representative if needed.
For more information, contact Revel Paradis at (509) 454-3707.
Walla Walla Area Small Business Center
Rich Monacelli, Business Development Specialist
(509) 527-4681 or richard.monacelli@wwcc.edu
WSU Farm Family Support Network
FREE and CONFIDENTIAL
http://ffsn.wsu.edu
Peter V. Rodionoff, Coordinator, prodionoff@wsu.edu
1-800-469-2981
1-866-791-2293 ¡LLámanos para información!
United States Small Business Administration
Washington Branch Office
801 W Riverside Ave. Suite 200
Spokane WA 98101-1128
Phone: (509 )353-2811
Fax: (509) 353-2600
Mid-Columbia SCORE
1229 Columbia Park Trail, Suite A
Richland, WA 99352
Phone: (509) 375-3582
Email: jthornton_9@msn.com
http://www.score-wa.org/
Washington State Department of Agriculture
1111 Washington St.
Olympia, WA 98504-2560
Phone: (360)902-1915
Fax: (360) 902-2089
http://www.agr.wa.gov/Marketing/default.htm
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