Farmers are the key to any economy of a country and its gross domestic product. However, it is not always profitable because of laws in place that vary from state to state and competition. As a small-scale private farmer, generating profits enough to sustain the expenses and earn a living for a family can become a challenging thing at times. So, simply having a farm is not enough to have a profitable farm business.
Here, we discuss a few tips that you can employ to help yourself in the farming business or farm business. Kindly note that this does not necessarily mean agriculture, but farming animals like fish and poultry, or giving away the farm space for recreational activities as well. So, if you are into any of such businesses, kindly bear till the end of the article.
Profits from Just 1-Acre Land
Because it is a farm or agri-business, your profit comes from what you grow and sell from the land itself. Therefore, the area is the key. So, what type of activities or things you can do on an acre of land? Below are some profitable things you can try.
- Growing medicinal herbs like gourmet mushrooms.
- Using the field as a campsite for tourists.
- Snail farming is a good idea too.
- Renting the barn for gatherings and meetings.
- Fish farming like tilapia etc regionally in demand.
- Raising worms to sell as baits for fishing.
- Creating bed and breakfast for travelers, tourists, etc.
So, there are several numbers of things and a very diverse set of activities you can use your small 1-Acre farm for. And there is money to be made in each of the following solutions. Because, it totally depends on your labor, experience, and geographical location, you can choose either of them. Or, come up with something of your own.
Starting a small farm business is different from growing your farm business because the first step is always one that requires patience and investment. The profits and growing the business comes next, sometimes a year later or so. There are bigger things that you have to take care of first, like below.
Your regional agri-farm laws may permit for some and may not for others, so you need to take these things into account as well, for example, in growing medicinal or recreational herbs. Or, gathering the labor for the farm may not be that easy because of the production cycle and effort it requires. In that case, you may need Agri Labour recruitment as well.
Increasing Farm Profits
Because this article is about increasing profits, we assume that you already have a farm set up with some business, and we take the generic route to discuss the various factors you must consider. That is, finding the true cost of production, thinking practically rather than emotionally, measuring the market and determining the correct inventory, and so on.
- Knowing the True Cost of Production or TCOP
This is a subject where you should think about the policies and why it matters. The cost of the entire process from procurement, labor, to the final product, must go into this calculation if you want to see profits. Try to find out how to calculate the TCOP for your specific farm business. Seek help from experts in this business and use your experience.
- Think Outside the Box and be Practical
This is important because emotions can often lead to bad decisions. You must start with a viable market plan that is profitable from the first step and not ignore this factor. If you don’t consider the profit margin right from the beginning, you cannot come up with a correct plan. This will help y in determining the inventory, logistics, and market demand.
When you do these two things in a repetitive cycle, you can understand that one drives the other. A good practical business plan drives profits, and good profit helps keep the production costs tolerable. For example, you can even reduce the TCOP by buying equipment rather than renting, and so on.
Profitability in Competition: 9 Tips
To increase profits in a competitive environment is a challenging task when you cannot invest a lot and do not have land as well. Thus, farmers need a deeper understanding of the technical factors that drive the business.
- Many notice that price is the biggest factor and reduces their profits. In some cases, a 10 % increase in price and production can result in 2x profit.
- But, amidst the competition, how much is sustainable? So understanding the resilience and flexibility of your business is important because these offer management opportunities.
- If you know your financial capacity beforehand, you can help maximize the profit.
- Additional debt or loans can lead to bankruptcy as well.
- Sometimes, making numerous small changes is a better policy at raking up the prices. That way, you can avoid debts and stay afloat.
- The most important factor is to sell more and produce more.
- If you can meet the rise in demands, and help create demands, you will make big profits very soon.
- Slightly increasing the prices can help in the short-term.
- Choose from the above list of profitable farm businesses.
Different production scenarios, farm business, and markets with competition affect sales and profits. If the sales are good, then you can invest in increasing production and managing small things to reduce production costs. Profit means long-term business, rather than a short-term benefit.