Whether you’re a commercial farmer or an organic home grower, excessive produce can quickly turn a profitable business model into a cash flow nightmare. It’s estimated that around 30% to 40% of produce goes to waste in the U.S. every year, which amounts to around $161.6 billion. For home growers hoping to transition from self-sustaining gardeners to a profitable farm, it helps to know the business side of things.

Scale At A Comfortable Level 

It’s hard to determine just how much land you must dedicate to cucumber and tomatoes, and whether it’s worth investing in hydroponics, a large-scale greenhouse, or other pricey items that can quickly drain your cash resources. The best way to enter the market if you’re not sure of the numbers is by setting up a stall at a farmer’s market. If the leap still seems a bit much, try starting out with a roadside stand or city produce stand. This will quickly provide you with insight to your biggest sellers, your target market, and whether you should invest in better infrastructure for certain items. Starting small also means that you can gradually grow your business without too much risk.

Get Your Documents In Order 

While it may seem more of a hassle than it’s worth, you will be happy that your documents are ready from the get-go. This includes registering for all the licenses and permits your state requires. It’s also important to look into the various types of business insurances, especially when you employ staff. For home growers and organic farmers, worker’s comp insurance for your food and beverage business will protect both your business and staff. You will also need to look into crop protection and insurance to cover the land and building. Registering your business with the local business registries and authorities will go a long way to securing business from the formal sector. This is also a good time to look into proper shipping and handling to ensure produce gets to the end-user in a fit state.

Market Your Unique Selling Point 

If you have a passion for micro greens or have developed a harvesting cycle that guarantees optimal taste and freshness, it’s important to make these known to your potential clients. It’s also important to set up the marketing to reach the destined target market. Take care of the branding as these elements will all be important when it’s time to approach local restaurants and greengrocers. It’s also important to have a look at what the competitors are offering and whether your products will add value or you will simply enter a price war. Your homegrown goodness might also offer a unique selling point in the way it is grown, such as sustainable and eco-friendly farming practices which are trending across the globe. For sustainable restaurants and shop owners, this will be an important factor.

Home farming can be a lucrative and rewarding business if done right. By learning how to position your organic farm as a business, it’ll be a smooth transition from home farming for your own pantry to earning a profit.

Author: Jenny Holt

Jennifer Holt is a freelance writer and mother of two, who loves nothing more than to play, “where has the cat hidden itself now.”