Business of Farming

Every Friday night, my husband and I park ourselves in front of the television to enjoy our favorite show, “Shark Tank.” If you have not seen the series let me tell you a little about it.

Entrepreneurs from across the country pitch their business ideas to four or five successful businessmen and women. These budding entrepreneurs explain the concepts of their business or newly invented item in hopes that one of the wealthy investors will take them on. Most of the ideas are just that, ideas and will never come to fruition. Others are clever concepts that leave you wondering, why didn’t I think of that? One thing can be said for all the characters that go on “Shark Tank,” they think outside the box.

As a specialty crop grower or agritourism business owner, thinking outside the box is a must. Just like the “Shark Tank” entrepreneurs, fruit and vegetable farmers need to invest time in planning. From before the seed goes in the ground to the moment it is served on a plate, thoughtful planning is a must.

Creating a business plan is the first essential step for any successful business. A business plan is a document that entails all the planned goals, inputs and outputs for the year. Set your goals for the business, but be sure you know the dollar value of those goals. This process creates a picture of what the business needs to do in order to be successful. In other words, it helps you know your business’ capacity. Knowing your

capacity and inputs for each crop will help set a price point for market and make other purchasing decisions down the road.

Fruit and vegetable producers have to create or locate markets to sell products. Before taking on the world with the idea of selling fresh fruits and vegetables, it is important that you know the markets that are available for selling products. One of the first steps is to know who your customer is. Is your customer the end user at the farmers market or the Piggly Wiggly down the street? Here are just a few helpful questions to ask about your target audience:

• What is the age range of customers? • What percentage are male or female? • Educational level? • Where do your customers live and work and play? • What is your customer’s income?

You may also want to ask, what are my customers’ needs and goals? Why would customers buy from me? Asking these questions will help you align with your customer and identify which marketing avenue is best for your business.

Farmers markets are a great outlet for selling produce, but there are some important factors to consider when choosing farmers markets as a main means of distribution. Find out how far the market is from your farm and the time the market starts. Determine how far is too far. Most farmers use a 100-150-mile range as a cutoff. Do the math and figure out how far you can travel before cutting into your bottom line. You can use the federal travel rate to estimate cost. Look at the time the markets starts. You may have to factor in staying overnight or traveling during the early morning hours if traveling over 100 miles for a market that starts at 6 a.m.

Another consideration is the day of the market. There are numerous farmers markets that are the same day. So, it is possible if the distance is not too far and the time of the day is right, you could have multiple markets during the week.

Try to find out the number of farmers at the market that are selling the same products as you. Some markets may not allow multiple vendors to sell the same products. Offering nontraditional crops may help customers gravitate to your farm’s booth. Most markets have an application cost along with a vendor cost. Make sure you can supply enough merchandise to cover all costs of the market, which includes employees working the booth.

A larger market to consider is grocery stores. Many big chains like Walmart, Publix and Kroger require produce safety certifications that can be costly to small growers, but there are some local stores that will purchase locally grown without the requirement. The best option is to talk to the produce manager at the store and see if there are any food safety certification requirements. Sometimes, selling to chain stores may require contracts. Be sure you will be able to meet the requirements of the contract and know the stipulations if for some reason those obligations cannot be met.

Selling direct to consumer is also a great way to connect with your community. Agritourism and roadside stands bring customers to the farm or location set up by the farmer. These direct market options allow for more flexibility in pricing products because there is not as much competition. However, comparing prices with similar businesses nearby is a good idea.

An advertising and marketing plan is essential when operating a direct-to-consumer market. Develop a brand that helps customers recognize you. Some successful advertising strategies are: designing a logo, using social media platforms, developing a website, running radio and newspaper ads, and installing road signage. Using these strategies successfully can really make your farm stand out.

Some other markets to consider for specialty crop production are community supported agriculture, online sales and food hubs. Many producers find that a combination of markets is the best avenue for their farm sales. Do not feel you have to limit yourself to just one. Evaluate your farm’s situation and take the best course of action from there.

Whatever marketing strategy you choose, remember to be innovative and find creative ways to grab potential customers’ interests. Here is where you can have your big “Shark Tank” idea. Develop a strategy that will make people want to invest in your products.

Share farm videos that tell customers about you and the farm. Adding a personal touch helps customers relate to you and strengthens your brand. Post daily on multiple social media outlets to keep customers updated on what is happening, where you are selling that week and what is available. Be sure to reply to customers’ questions or comments in a timely manner. A best practice is to set aside a few minutes during the day to manage social media. Most importantly, have fun with it and stay true to yourself and your business’ mission.

The Alabama Cooperative Extension System has resources for farm budgeting, food safety and marketing available on its website, www.aces.edu or call your local Extension agent. They will be happy to answer any questions on farming and marketing produce.