Home » Farm Management » Business Planning » 10 Keys for Small Farm Success

10 Keys for Small Farm Success

By Bob and Bonnie Gregson

Here are the ten most identifiable keys to our small farm success. You may be able to finesse one or more of the points. But beware; glossing over any with unrealistic bravado may shower the dream with burning arrows. Our original farm business plan certainly suffered from some arrow holes, as described earlier, but these ten major under lying conditions were either directly met or readily adaptable.


As one considers what to do to make a living on such a two-acre parcel, there are major factors to consider, a screen through which one’s dreams must pass.

The ten key factors we have identified, and discussion of each, follow:

  1. Like-minded partners — mutual support is crucial.
  2. Organic growing — ethics and economics happily coincide.
  3. Keeping it small — a few acres are enough.
  4. A passion for growing — small farms are a labor of love.
  5. Physical ability — are you a willing worker?
  6. Ongoing education — knowledge is the key.
  7. Direct marketing — cut out the middlemen.
  8. Location close to consumers — nearby population is an asset.
  9. Value-added product(s) — two plus two can equal five.
  10. Off-season work options — have a backup skill.
Bob and Bonnie Gregson 10 keys to small farm success
Bob and Bonnie Gregson on their farm.

1. Like-minded Partners

We believe it takes two like-minded, very supportive people to make most start-up enterprises work. And a small farm, like any small business, is indeed intense during the early years! It will require all the focus the partners can give.

That is not to say that it is impossible to do this with a family or one partner’s career and its related needs — but the partners must mutually understand, appreciate and fully support the motivation involved in operating the farm, and be prepared to sacrifice most other outside activities during the early years.

It is obvious to us that our coherent interests are in large measure responsible for our success. To be blunt with a personal subject, it is also obvious that this would not have been the case with our prior spouses; neither of our prior marriages would have withstood this activity level because the spouses did not have the same passion for walking/talking/working/reading about and thinking about growing things, and, quite understandably, could not have supported or substantially contributed to the overall effort. And neither of us could likewise contribute to their passionate endeavors.

Remember, we said that this is a great life and very fulfilling, but probably only if this is where your passion lies. It is crucial to identify personal life passions in advance. Dragging a partner into an intense field of endeavor into which he/she does not fit may be fatal to the relationship.

2. Organic Growing

Small farms should grow crops organically. The more we read and discover, the more we see the long-term disaster that chemical farming is, both for the consumer and especially the farmer, and we also see how feasible it is to grow mixed crops better organically. (We have closely followed the debate on this topic for many years, and have experienced it ourselves, so do not make the previous statement lightly.)

Over 70,000 chemical poisons have reportedly been used in recent years in various phases of agriculture; most are still in use. No one knows how any of the 70,000 or their by products interact with each other in the various soil-groundwater-air combinations, let alone how they impact the 100,000 or more living entities found in each teaspoon of topsoil. Or what impacts chemical combinations have on humans. There is no way a rational, dispassionate observer can assume toxic agricultural chemistry is benign to humans; after all, it is designed to kill living entities.

Farm workers and farm families have many horror stories about their personal experiences with those toxic chemicals. Many such persons are killed and damaged around the world every year.

Those poisons plus synthetic chemical fertilizers are also a huge expense to farmers.Fortunately, they can be replaced by much cheaper homemade items, especially on the small farm where chickens and other farm animals can play a substantial role.

Save Money and Build Healthy Soil

So why would anyone use expensive products that are undeniably dangerous to the applicator, to the eater of the produce, and to all nature, if they are not necessary?

Because well established multi-billion-dollar financial and bureaucratic institutions are dependent on their sales and use, that’s why. They have created a dependency and a mindset that seemed to make sense for awhile after World War II, but is now known to be dangerous and unnecessary in almost all cases. And they focus on symptoms instead of the real problems.

These powerful institutions are stridently promoting their chemicals and “silver bullet” procedures at all levels, and have the financial power to strongly influence the political and educational system.

If the buggy whip industry had enjoyed equivalent financial power early in this century, during the transition from horses to automobiles, it is not unreasonable to believe that every new car would still have a federally-mandated buggy whip as standard equipment!

Many farms, both large and small, have decades of successful organic production of a wide array of crops. Good crop rotations, feeding the soil with natural amendments and compost, and good choice of varieties replace toxic chemistry and serve everyone better in the long run.

Productivity of Organic Farms

It is sometimes said, even recently, that chemical farming is dramatically more productive than organic. That is utterly false. For a two-year sample study of twenty eight farms see the article by Klepper et al in the February 1977 American Journal of Agricultural Economics, showing approximately equal performance in Midwestern commodity crops.

Another myth alleges that organic produce is usually small, ugly and blemished. It can be — but won’t if well grown and properly cared for. Another myth is that pests run rampant through organic fields. The truth is that healthy soil grows healthy, pest-resistant plants, and encourages a natural balance of so-called pest and predator.

Some organically grown produce actually tastes better, too, especially carrots, beets, potatoes and walnuts. Good organic farmers grow beautiful, high-yielding, tasty produce.

If you need further reasons for using the best of the old-fashioned ways, consider this: organic produce is also a market niche commanding a higher price and increased consumer interest/loyalty.

Chickens and Other Farm Animals Belong in the Scheme

As a corollary, we think organic farming almost has to include raising truly free-range chickens, birds that have complete access to varied outdoor areas.

True free-ranging chickens convert various leftovers, crop residue, general forage, and purchased feed into terrific input for the compost pile; they devour most weeds, weed seeds and bugs they find; they aerate and till the soil in a healthy way (as long as they aren’t left in the same place too long); and they provide eggs, or meat, that, again, is notably better than what you can find at the grocery store.

Our eggs are a real draw to our farmstand because they are so fresh, with an orange, upright yolk that tastes appreciably better than the “factory” eggs from stressed, caged chickens. It is usually impossible to find grocery store eggs from free-running chickens, despite the clever — but meaningless — marketing words like “range,” “ranch,” “naturally nested,” and “freerange” that adorn many commercial egg cartons. Farm stand eggs will be, at most, several days old; those in the grocery store may be several months old.

Ethical Considerations

People are also beginning to have ethical concerns about how production animals are treated; many like to know they are patronizing a farm that lets chickens and other farm animals freely run in a congenial setting.

Final Note About Organics

Replacing synthesized agricultural inputs with meticulously defined organic inputs is a huge step in the right direction. But it is only one step. We firmly believe that it is equally important to use diversity, intercropping, companion planting, “friend strips” (habitat left for insects), cover cropping, crop rotations, wind breaks, runoff collection, and integrated livestock techniques to achieve the robust balance of life in and above the soil that enhances all agricultural activity. People and communities also count in the equation: ethical, caring attitudes should be a hallmark of everything we do when we call ourselves “organic growers.”

3. Keeping It Small

Two acres, or just a few more, are desirable. More than that requires substantially more capital and more labor than two people can provide in an intensive-growing situation.

Most of our income — not counting egg production — comes from 3,400 square feet of raised beds plus about 27,000 square feet of general growing area. That is less than three-quarters of an acre. And we are not nearly as “intensive” in that area as we could be with ever better planning and implementation.

We’ve already noted our conclusion that two supportive partner beginners can make more money on small acreage than can be made hiring help and using more land. Each situation might unfold differently, but, for starters, we think it is best to limit production activities to one-half acre.

“Acreage Creep” is One of the Downfalls of the American Family Farm

It is most seductive to think that cropping a few more acres will justify purchase of a machine that will do things faster. That’s probably true, the part about the machine doing it faster. But machines are expensive, need shelter, insurance, maintenance, and fuel and usually only relate to a few crops. Extra acres and their necessary machines mean more debt. They also automatically mean the farmer will not be able to pay as much detailed attention to each growing area, so quality will diminish as time demands increase. The larger size may not be at all justified in the overall sense.

Everything we see tells us that economically successful farming is easiest on the very small or very large farm. We know about other newcomers like us who have expanded with more acres, machines, and employees, but seem to have a great many more headaches — and working hours — without any more net income, and perhaps less, than provided by our few producing acres.

Income Expectations From Those Few Acres

Let’s be a little more specific about income. In our King County, which includes Seattle, the median household income (half are above this, and half below) is about $54,000. Use that as a benchmark for adjusting the following table to economics of your area. And note that you should net about 75% of the gross sales.

Don’t expect the farm to totally support you during the first several years. Our experience, and that of other growers, suggest the following (1995 dollars):

Small farm income chart

Our largest expense, by far, is about $3,500 annually for . . . chicken feed (300 chickens)! . . . the next biggest is about $400 for seeds. Both can be greatly reduced by better farming techniques such as seed-saving and better use of the orchard floor (growing food crops there for the chickens).

For the two-acre, general-purpose farm model operated by two people, there appears to be a practical limit in the $40-50,000 net income range. Interestingly, that latter figure will probably put them in the top 5% of all U.S. farms, and they will make a better living than most farms much bigger and busier.

Our thinking and practices evolve as we gain experience: we currently see some new ways of doings things that will move us toward that income range within several years. And there are plenty of examples of people who have found very specialized niches like ginseng, baby vegetables, specialty flowers, or houseplants, that can generate a great deal more money and profit on several acres. “Windows of opportunity” open with experience.

Income Comparisons

Comparing $30-40,000 to what we jointly made at corporate jobs years ago, and what salary ranges are in the corporate world today, this farm income is indeed modest for two workers! And there are no medical/dental or retirement or vacation benefits, and that amount won’t service much of a mortgage.

But — we’re talking about a seven- or eight-month program per year in this climate zone.

Taken in that light, it’s not so bad. And, what dollar value can be assigned to holding a job you love, in a wonderful environment, with someone you love to be around, while providing a valuable service to your community? Add in unlimited continuing education in all subjects from botany to plumbing, ever-changing challenges, much time to widely think and contemplate while performing quiet tasks, lots of exercise and fresh air, the best food available anywhere on the planet, a 30-second commute, no “dress for success” costs, and the responsible flexibility that comes with being in charge of your own activity. This kind of farming can even be considered a privilege.

Biologically Sound, Productive Farming Begets True Wealth

Speaking of wealth, is rich topsoil a prerequisite for a farm site? No. Good biological farming soon begets top-notch soil.

Your two acres does not have to start with rich topsoil. Ours certainly did not. It would be helpful, but not essential, except for a fast startup.

Soil can and must be built over time; a lot can be accomplished in three or four years. The “lay of the land,” length of growing season, and immediate microclimate are crucial. It is advisable to discuss these issues early on with knowledgeable locals. Those issues will establish what you can best grow, and where, and when.

Farmers and observant gardeners know that there are substantial climatic ranges in a locality, and even within a smallish garden. Close observation will tell what each little zone is like under various weather circumstances, and, thus what type of plant will grow best in each “microclimate.”

4. A Passion for Growing

Potential farmers need a burning desire to grow things, a labor from the heart. Life on a small farm can be intense, wearying, and sometimes boring or frustrating. One has to have the internal fire that stays lit despite setbacks. It is essential to honestly ask oneself hard questions about personal strengths/weaknesses. Am I willing to carefully plan? Do I organize well? Do I work well under time pressure? Do I work well on my own? Do I focus and complete projects?

Neither of us had seriously explored the possibility of making a living in agriculture. Sure, we knew great happiness and satisfaction came from working in the garden — our own gardens — but no connection with a livelihood in our own gardens was obvious. Mid-life crises apparently jarred each of our synapses enough to complete the “why not try this?” circuit.

It seems that the internal “growing” fire is often lit by grandparents long ago, particularly by nature-conscious grandmothers, and may lie smoldering for many years before it becomes obvious and acted upon. That was true for both of us.

The test for this, or any other potential life passion, lies in the answer to the question,“What activity would I most often enjoy doing if it was totally up to me to decide?” Most of us do not consciously know the answer to that important question and do not consider relating it to our professional lives. That is a tragedy on a grand scale!

What would be the effect on the collective mental and spiritual health of our culture if even one of every ten adults was passionately, lovingly pursuing a career he/she felt was his/her special calling?

5. Physical Ability

Ability — and the willingness — to work long and hard physically is also crucial. These two items are a bit different from each other and should be scrutinized accordingly.

Bob Gregson throwing hay 10 keys to small farm success
Bob Gregson throwing hay.

Ability to Work

The work required on a very small farm is within the capability of most people, male or female, large or small.

The two of us led relatively sedentary prior lives up to our mid-40s so it took some time, and painful experiences, to adapt to a steady diet of physical exercise. Our biggest physical problem in the early farming years was that we did not quit doing something when it started to hurt.

Long periods of repetitive motion were the most dangerous. Bob spent nearly three incapacitated weeks after three days of steady dirt shoveling. His left shoulder sort of burned after the first day, then hurt continuously as he dug the next two days, then hurt enough by the end of the third day to stop almost all motion. Yes, of course that sounds dumb, and it was. He was still thinking about how he could do things 20 years before, with no after effects.

Bob learned two main things from this experience: how to temporarily function with only one arm; and, not to trust the “work through the pain” ideas so dear to some of his more macho Army experiences years ago. It’s not the same body!

Willingness to Work

Willingness of the mind may be a different matter. We, for example, typically and (usually) cheerfully each work 80-hour weeks throughout the growing season. Even at that there is always a backlog of unfinished business. Those with small children or other time-consuming interests might find that routine unacceptable.

And sometimes, as noted earlier, the work is hard, boring, tedious, frustrating, painful, or all of the above. Sometimes it is glorious, beautiful, spiritual, joyous. Regardless of what may prevail at any given time, the totality is immensely rewarding to those tuned to the right frequency, and well worth the labor of love. But that labor is relatively unceasing; one cannot expect to be financially successful “dabbling” in small-scale agriculture.

6. Ongoing Education

The 80-hour weeks mentioned above can be minimized through improved techniques and timing. Some of that comes from personal experience; better yet, and usually much cheaper and less frustrating, is to capitalize on others’ experience.

Read. Listen. Read. Ask questions. Read some more. You get the idea.

Read Books

Most of our successful activities and techniques come from books we’ve read. After all, several thousand years of cumulative agricultural experience rests in society’s collective memory, including the written word. Just a few decades ago, one could find all kinds of books full of wise farming observations, or look just about anywhere in this country and find an old, experienced farmer, and tap into a fairly consistent ancient knowledge. Reading is important; getting wise personal advice is also important, but hard to come by.

(Editor’s Note: Find the book this article is excerpted from, and many more, including audio and video, at the Acres U.S.A. bookstore.)

Good Advice is Hard to Find

First, it’s hard to find any farmers nowadays. There aren’t many left.

Second, the experienced farmer of the late 20th century is a product of post-World War II chemical farming practices. He/she knows all about operating large equipment on a large expanse of land, using procedures developed by and, in effect, dictated by the chemical companies, the federal government, and his/her banker. That may sound overly simplistic. It isn’t really, when you consider the long-term interaction of corporate grant money with the agricultural universities, corporate money in politics, and the revolving job door among public agricultural officials, agribusiness and agri-education.

This is the new collective knowledge: how to deal with government programs, how to use high-tech equipment, how to negotiate with marketing middlemen, and how to work with a distant banker. Even the fertility and pest control program, and crop choices, are often in the hands of those same outsiders or hired consultants (who work for the very firms that will sell and/or automatically apply the remedies they prescribe).

Our modern farmer is minimally aware of the complexities of the living soil, spends little time with hands or feet on the soil, and observes few of the many nuances of plants and soil so prominent to his ancestors. Farm family “farming” skills have been replaced by reliance on technocrats and bureaucrats.

Some farmers understand this; some resent it; to most it is just a fact of life.

All of this is just a long way to say that there is not much next-door help available to any of us as we work to resuscitate the best of the time-honored farming skills. Fortunately, many old books offer valuable information and there are some terrific new books. Those at the top of our list include:

  • The New Organic Grower, by Eliot Coleman and Backyard Market Gardening, by Andy Lee. These provide excellent details about small mixed crop operations. They both seem to be widely available at book stores.
  • The Organic Method Primer, by Bargyla and Gylver Rateaver. This is the ultimate book about how to grow any food crop organically. It is expensive but is worth every penny.
  • Salad Bar Beef, Pastured Poultry Profits, You Can Farm and Family Friendly Farming, by Joel Salatin.
  • The several basic texts about “Permaculture,” by Bill Mollison. These cover the concepts of farm layout in the broadest sense, insuring that everything fits together in a multipurpose, mutually supportive sort of way.

Read Periodicals

We subscribe to, and thoroughly read, about a dozen somewhat specialized periodicals, plus others of general agricultural interest.

(Learn more about print and digital subscriptions to the monthly Acres U.S.A. magazine here.)

7. Direct Marketing

A small farm must primarily sell directly to the consumer. To make a living on a small farm, we must cut out the middlemen who today make virtually all the profit between farm harvest and ultimate sale to the consumer. Subscription farming and good use of a farmstand allow the farmer to sell produce for substantially more than the normal wholesale price.

Example: If we grew summer squash on a large scale, early in the season it would sell in bulk for about 35 cents per pound to a local wholesale warehouse. Or we could sell lesser quantities at about 55 cents per pound direct to a few organic-friendly local grocery stores who would price it to the consumer at about $1.00 per pound. Or we could sell even smaller quantities directly to consumers at our farmstand for about 75 cents per pound. The latter is clearly “price optimal” for us and the consumer, cutting the consumer’s produce cost by 25% while raising the farmer’s gross by 36 to 114%. Those are big numbers in aggregate.

Advantages of Direct Sales

The farmer makes more money, while the consumer spends less money. That was clear in the example.

But there are other factors not so readily obvious: food travels the 100 feet from the field to our farmstand in several minutes, with much less handling than during its four or more days from a faraway farm to a wholesaler to a grocer and then to the consumer.

That means our model provides much fresher (translated as more nutritious) food with less wear and tear on the interstate highway system, less fuels burned to transport, handle and preserve the produce, less cultural stress on our social system since two-person farms are not dependent on migrant workers, encourages use of more interesting varieties (not just bred for easy transportability) within plant families to protect genetic diversity, reduces the need for energy-intensive food storage facilities with attendant chemical preservatives, and keeps more dollars in the immediate local economy.

Those add up to a huge plus for the taxpayer/consumer.

Disadvantages

There are really two main drawbacks to direct sales: first, it takes time and effort to establish/maintain sales facilities; and, second, the quantities that can be sold by the farmer are much less than from wholesale opportunities.

Time and effort are the principal inputs on a small farm, so we have to be careful that we don’t overextend our human hours. The farmstand at our Island Meadow Farm is self-service and only one hundred feet from our house, yet it still requires 20-30 minutes per day for restocking, sign-making, checking status of change on hand, and so on. And building a pleasant, attractive facility takes time and resources. Our little stand cost about $500, and the 800-foot driveway plus parking area requires about $200 worth of new gravel each year, but these are well worth the expense.

Quantity of Product Available for Direct Sale is a Real Issue

For example, it is not reasonable to even consider selling truckloads of wheat from a farmstand. Nor will one normally sell thousands of pounds of any one thing. So the small farmer realizes that along with the higher selling prices possible through direct sales comes a smaller sales volume potential. The clever farmer plans accordingly, ideally growing enough of each crop to just saturate the highest price market available (the farmstand customer group), with maybe a little left over to sell to the next-highest price buyer (usually a local grocery store or restaurant.)

8. Locate Close to Consumers

A small farm should be within a reasonable distance of potential customers. Towns offer wide varieties of food consumers in a rather dense cluster. Since everyone’s time is at a premium, logic dictates farming within a short distance of a city or town where one can quickly deliver to the consumers or they can easily come to pick up produce and see the farm.

If one out of every 20 families would participate in your farm program, it only requires a population base of 2,000 families to make that program successful. About 100 cars come down our driveway to the produce stand each week, probably representing 100 families.

Your customers will come to consider you “their farmer.” Most will love the opportunity to see — and have their children see — where their food comes from.

9. Value-Added Products

A small farm must feature at least one frequently-used value-added product. “Value-added” means adding labor to a basic item in such a way that the end result is worth more than the beginning raw material. Apples, for example, may be worth 50 cents per pound raw, but much more as dried fruit or after conversion to fancy vinegar and packaged/bottled in an attractive way.

Many don’t understand this concept. For example, our four-state agriculture newspaper ran a January 1996 article titled, “California Economist Debunks Value-Added.” This “marketing expert” went on to say that the popular new salad mixes in grocery stores weren’t really successful because they weren’t increasing sales of lettuce. Let’s hope she was misunderstood:

The point of value-added is to add two dollars worth of product to two dollars worth of labor and then sell the new product for five dollars instead of the traditional four dollars.

No farmer should be in the business of “selling more lettuce”; he/she is in the business of growing and selling things in the most creative way to maximize profitability. Selling a good salad mix is much more profitable than just selling more lettuce.

The keystone of small operations is that through personal attention one can grow beautiful produce, but this will, by definition, be in fairly small quantities. Therefore one must carefully choose those products that make the most economic sense.

Choosing Produce to Grow

We focus on higher-value items for the farmstand: tomatoes, winter squash, raspberries, broccoli, pole beans, and our value-added specialty, a 60- to 90-ingredient gourmet salad mix.

That list might be quite different were we in another area or climate zone.

Sure, we grow enough of everything else under the sun to keep it interesting for our subscription customers, but there is no way we would consider growing corn for sale at our farmstand where we would have to price it at eight or more ears for a dollar to be locally competitive. Nor would we grow radishes or something that takes substantial labor and space, yet sells for pennies per bunch.

The salad, on the other hand, is a way to make good money from humble components. It is highly popular because it’s fresh, includes interesting different tastes, and is ready to eat out of the bag. We add value by picking it leaf by leaf, tearing leaves to bite sizes as needed, mixing 60-90 ingredients together, double or triple washing the mix, and ensuring a variety of colors, tastes and textures in each bag. At ten dollars per pound, it sells on a continuous basis to a large group of year-round loyal customers who say they are now “addicted.” It accounts for nearly 30% of our yearly gross revenue.

Beware of Fads

Is our salad mix a fad? It probably was to some extent when the edible flowers were considered the essence of its marketability. Our customers now tell us — and we listen closely for this type of feedback — that they like our salad because it is obviously fresh/healthy, tastes so much better than the iceberg and — in adventurous families — romaine lettuce salads they grew up on, changes seasonally, and is ready to eat direct from the bag.

Flavor, interesting variability, healthiness, and “ready to eat” are factors that will only become more important as our go-go world keeps going faster.

There are other farm products that have come and gone in our regional popularity polls. Some kinds of “cutesy” things are especially vulnerable, items that are not eaten or frequently used, like dried flower crafted arrangements, some herbal products, and edible fresh flowers.

Rule of thumb: if you start reading about a trendy new non-staple product in your regional lifestyle magazines, the product market base is already saturated — you’re too late. Find or create some other niche.

10. Off-Season Work

Lastly, it is a time-honored tradition for small farmers to have an offseason way to make money. This is important as a financial supplement during the start-up years and a refreshing change of pace, if desired, later on.

Bonnie bought a small upholstery business and learned the trade from the prior owner before we bought the farm. It’s a congenial, warm and dry business we can operate at one end of the shop building during the cold winter months. By mid-October we are ready to shift gears from the growing season, and yet stay productive; by early February we are eager to start growing again. It’s a nice combination. Here again, one must be creative to identify skills that can be tapped for an on-farm job. Skills like carpentry, jewelry-making, various crafts and computer based talents are good candidates. The Amish people represent good models; read about what they do.

Source: Rebirth of the Small Family Farm