Have you decided to start your farm?
Whether you come from a family of farmers or breeders, chose this path out of passion during your studies, or on the occasion of professional retraining, the launch of your farm is a long-term journey.
To help you see the steps to make your project a reality, we see here in detail how to draw up a solid and reliable farming business plan, a necessary prerequisite for starting your activity and guaranteeing its success.
On the menu: market research, choice of legal status, and search for financing
Carry out agricultural market research
Farming: an entity to be reconsidered
We all have this figure: nearly one in three farmers earns less than 400 euros per month ( BFM ).
But we all also know that eating better or eating well is a growing concern for the French. So it is difficult to miss the monumental rise of organic farming, Bio, which should be invited a little more on school canteen trays, at least that's what candidate Emmanuel Macron had promised: 50% of products from organic farming at school.
The Estates General on Food (EGA), held from July to December 2017, also made it possible to rethink the role and purpose of the farmer in the agri-food sector.
In this context, the AMAPs (Association for the Maintenance of Peasant Agriculture) and other cooperatives are flourishing, intended to offer products from organic or sustainable agriculture at fair prices for the operator.
On the retail side, the Carrefour brand offers milk cartons from the brand "Who is the patron?" At a price that allows you to reimburse the producer at the right cost.
As we can see, the agricultural sector is undergoing a metamorphosis, strongly influenced by societal trends that affect the entire agri-food sector and militate for agriculture and livestock farming that is more respectful of the environment, often favoring short circuits to minimize the carbon footprint and better understand and indemnify the operator's work.
Carrying out the market study of a farm: the information to be gathered
Carrying out a complete market study of the agricultural sector will prove invaluable when choosing your concept and your geographical location.
You will have to gather all the information relating to the functioning and news of the sector: its basic trends, its regulatory changes, etc.
The market study should allow you to have a global vision of the sector and fully understand the French habits regarding consuming products from farms.
You will then have to take an interest in the existing offer. The idea is to establish a precise map of the farms located near the location you are considering:
- How many are there? Where are they located?
- What type of activity is it?
- To whom do they resell their products (directly to consumers on the markets, to manufacturers, or too large retailers)?
Are you also interested in the sector's turnover: how much does it represent altogether? Is it on the rise? Increasing? Steady? Does it vary in volume (more or fewer products sold) or value (more or less expensive products sold)?
Finally, ask yourself which farms see their turnover increase? Where are they located, and what type of operation is it? Ditto for farms in difficulty, which see their turnover drop.
In both cases, try to identify the factors contributing to these farms' good or bad health to reproduce good practices and avoid bad ones.
Opening a farm: choosing the concept
The next step in starting a farm is to choose the type of product you plan to sell.
First of all, you choose between a farming operation focused on crops or livestock unless you opt for a mixed procedure.
You will also have to choose the type of crop or animal farming you want to practice. Again, be careful; however, this choice depends on the place you will set up, the soil characteristics, and the climate.
In the cultivation case, note that you cannot cultivate the same plant indefinitely on the same plot. Allowing the soil to rejuvenate is essential. Therefore, it is advisable to diversify the sowing over the years.
Finally, you will need to choose your operating concept. Between the intensive and gigantic farm, like a plateau of a thousand cows, or the minimalist and organic farm, which turns into an educational farm on weekends, there is a wide range here from which you will have to choose a concept that you like and will allow you to be proud of your work.
Organic seems to be a buoyant sector that cannot meet demand due to a lack of good farms. But be careful; the transition from conventional agriculture to organic agriculture is very expensive. In addition, you do not immediately benefit from the Organic Label, which allows you to sell your products at a higher price.
It should make an impression that the elements to be taken into account in the choice of the concept are:
- Support for this project and the pleasure you will derive from dedicating yourself to this project
- The response to the expectations of a target: your offer must respond to a demand that is little or not satisfied
- Possibly, standing out from the competition and offering a unique or uncommon concept
With what legal status to create a farm?
Even if you are not overly enthusiastic about choosing and defining the legal status of your farm, you will still need to devote some of your time to this step.
More than a simple administrative formality, the choice of status directly impacts many aspects of your company's daily management.
The legal Form of the company influences, in particular, the mode of taxation, the responsibility of the directors vis-à-vis the debts of the company, and the governance of the company (votes, number of partners, role of legal representatives).
Therefore, it is advisable not to take decisions lightly and be well informed about the particularities of the many options that exist: sole proprietorship, limited liability or not, micro-enterprise regime, simplified joint-stock company, liability company limited, cooperative, or association.
Also, check your legal status by the type of operation you want to create. For example, an organic farm that wishes to distribute its products via short circuits can choose the quality of cooperation and become a social and solidarity economy player.
The process is complicated because many parameters come into play. Therefore, it is better to have all the cards in hand to choose the most suitable solution for your project. To guide you towards one status rather than another and make an informed choice, consult our guide to legal situations.
Make a farm business plan.
A business plan is an important document to have when starting a farm.
In a simplified way, an agricultural business plan is a document composed of a written part presenting the advantages of the project in a reasoned way and a financial forecast highlighting the need for financing and the potential profitability of your project Operating.
An agricultural business plan, therefore, fulfills a dual function. It allows:
- the entrepreneur to assess the financial viability of his professional project
- the financial partners to learn about the professional project and decide whether or not to finance it
As it is this document that you will communicate to your potential financial partners (banks, associates, etc.) when seeking funding to present your project to them, it goes without saying that your business plan must be irreproachable both in substance.
If you're not sure where to start or if you're stuck, never done a business plan, you can choose to turn to online business plan software.
Using specialized software has several advantages:
- You are guided in writing by detailed instructions and examples for each part of the plan
- You can draw inspiration from business plan templates already written
- You easily make your financial forecast by letting the software take care of the accounting aspects for you
- You get a professional document, formatted and ready to be sent to your banker
If you are interested in this tool, you can try our software for free by clicking here.
The search for agricultural financing
The investments to start one's farm are substantial: equipment, sheds, seedlings, fertilizer, livestock, etc. There is no shortage of expenditure items, and the equipment prices are sometimes very high.
Fortunately, financing solutions exist to help you raise funds needed to set up your farm.
First, assess your equity, that is to say, the amount of money you can raise immediately without going into debt (your savings and potentially those of your partners).
Then you can also take out a bank loan. It will be a professional loan taken out with a banking establishment. File your file with several banks and compete to obtain credit at the most advantageous rate.
Donation crowdfunding is also an avenue to explore: offer people to support you financially in exchange for something that will interest them: a cow or a sheep in their name, an assortment of goat's cheese as a gift, a visit to the farm, one night in the guest room that you have set up on your farm.
Finally, do not disdain State aid, whether territorial or national, intended for business creators and buyers, farmers and breeders in particular.
You can, of course, combine these different means of financing your farm.
You can find more information on the means mentioned above in our guide to financing a project.
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