Agriculture plays a big role in every society. It is the main industry that provides the necessary supplies for a society to survive and thrive for many years. Its impact in nations like the United States is undeniable because the US agricultural sector is responsible for a fraction of its overall gross domestic product (GDP). In 2019, it had a 5% share of the country’s overall GDP. This amounts to a staggering $1.1 trillion.
This share is growing every year as more agribusinesses join the industry. These numbers might allure you to join the agricultural industry in the US, but despite its significant size and revenue, starting a business in agriculture is challenging as starting any business in other sectors. If you’re planning to start an agribusiness, here’s what you need to know.
Starter Pack
The agribusiness deals in everything related to agriculture. This includes livestock, machinery, farming, and the chemicals needed for farming. As a future entrepreneur in agribusiness, you’ll have to give each part of the sector a try. Thankfully, you don’t need to dip your toes too deep into this ocean of choices. There are various starters you can try for yourself.
For example, you can purchase various farming seeds and see how you can grow them yourselves. You can even do this in the comfort of your apartment with robust hydroponic systems for vertical farming. You can take care of your plants with minimal effort. Once you get the hang of things, it’s time for you to transition to a much bigger simulation. Various farms can offer livestock and seeds to help you get started. This requires little investment but offers minimal returns as well. But it’ll help you understand and get into the agribusiness life.
Get a View of the Agribusiness Life Through Your Local Co-op
If you live outside the city or have connections outside the city, you can get a prime opportunity to view the agribusiness life with your own eyes. Just ask for a farm tour that local co-ops tend to do every week. These tours can give you a good look into what you need for your agribusiness. Seminars can even help teach you current agribusiness trends as well.
Choose Your Sub-sector
The agribusiness sector is huge and has many sub-sectors you can join. This is one of the many luxuries that the agricultural sector has when compared to other industries. Once you’ve tried out each one of them, it’s time for you to choose which one you think you can do best. This doesn’t necessarily mean that you have to do the hard labor either. Many agricultural tasks are automated, which means that it depends more on how much money you invest than your overall manpower. Some of the biggest sub-sectors are machinery, livestock, and farming.
Finding the Right Land for Your Business
Regardless of the sub-sector you choose, you’re going to need land for your agribusiness to function. You can either lease or purchase farmland. Farmland can cost between $2,100 to $3,100 per acre, depending on the region you purchase the land. Many expensive regions sell farmlands for $6,000 per acre. When starting, it’s good to have five acres of farmland, but three will also suffice. This will be enough space for livestock, farming equipment, and crops to grow in your field.
Financing
We suggest you save your savings for later and get a commercial loan instead. Before entering this market, you should have at least $25,000 to $50,000 in savings because this will ensure that your farm will be in operation if you do reach the red. Look for a bank that offers farm credits because they are your best bet when it comes to starting an agribusiness. It’s either that or you look for an experienced investor in the industry. It might be tough to find someone willing to invest in someone new in the industry, but if you do get one, don’t ever let go. Do your best to get their investment and expertise because it’s a sure way to succeed in the industry.
Get the Necessary Licenses
Every business in the agricultural sector must have the necessary licenses to operate. It’s the same as any business in your state. You can ask for these licenses in the Secretary of the State’s office. These licenses’ price varies by state, so make sure you have enough funds for them, but they don’t usually cost above $500.
Here are the necessary things you need to do when starting an agribusiness. An agribusiness is a simple and humble business if you compare it to other business models out there. But it is also one that has stood against the test of time. It’s worth giving a shot if you’ve saved a hefty amount of money for yourself. You can always invest in other farmers in the industry to see if this business model is for you.
