Although a vegetable farming business can yield a return in its first year, planning ahead will ensure you maximise the hard work you put in. What you grow, where your market is, and the scale you plan to run your farm at will all change your obligations and considerations for success. This article will cover some of the topics that should be considered before your start.
Business Structure
Business structure can have a large impact on cashflow, start up costs, tax liability and growth options in the future. In Australia you can structure your business in 4 ways:
- Sole Trader
- Partnership
- Company
- Trust
There can be a lot to take in and it can often look like several structures may work for your circumstances. Its a requirement that you have an ABN if you choose to run your business as a company or partnership. If you choose sole trader or a trust you usually don’t need to get an ABN until the income of the business is greater than $75,000. Find out more about ABN requirements for sole traders.
Although it can be simpler to decide on a structure for the long term it is possible to change down the track. This could be to reduce start up costs in a business that may take couple of years to start expanding. A small business lawyer can help clarify what could work best for your needs.
Location
Overall Approach
How you will farm will define the space you need. Will you use conventional methods, no-till, hydroponic or something else? How will you manage the soil? Will you be starting plants from seed or buying seedlings?
Zoning and Land Use
Whether you purchase or lease land it’s important to know what you are allowed to do under the zone of the land you are looking to grow on. Some councils have quite a diversity of zones and its important to be compliant in terms of your land use and any structures you may need to build. Zoning and planning are a combination of state government and council. Its quite easy to find information on the property you intend to use through each state mapping service:
- NSW ePlanning Spatial Viewer
- Queensland’s Planning Framework
- Vicplan
- South Australian Property and Planning Atlas
- Plan WA
- LISTmap TAS
- NT Atlas
- ACT mapi
How large will your operation be? To know the full uses for the zone its important to consult the relevant planning legislation and plan for the council the land falls within. The acceptable uses for the zone will be contained in that piece of legislation. If you want to make any changes to the property or the land you may also need to get development approval. For example putting up a shed, building a dam, changing from one type of farming to another and adding new beds for crops may all attract the need for development approval.
Equipment
Think about the equipment you may need in your vegetable farming business:
- Greenhouse
- Insect exclusion netting
- Cleaning and packing areas
- Scales for packaging and weighing
- Irrigation
- Storage
- Produce trays and bins
- Refrigeration – cool room or insulated room with an air conditioner
How will those needs affect the space you require and any building you need to do?
Know Your Climate
Will your need to protect your crops from weather or pests? Is the area prone to flooding or bushfires? Was there heavy industry in the area previously? If you are growing in ground or raised beds. Soil testing for PH and composition. Sandy loam soil is ideal for growing vegetables but if you don’t have that kind of soil it can be fixed by adding compost or bringing in soil.
Choose Your Market
Where are you going to sell? Options include farmer’s markets, independent green grocers, supermarkets, wholesale markets, direct to consumer and community supported agriculture (CSA). Are there people in your area who want to buy what you will grow? Where are the people who want to buy your produce? How can you get it to them? How does your produce store? Cost and convenience will be your main considerations and factoring these into your decision on location can ease the reality of running a vegetable farm. Focusing on one kind of market will and being closer to your buyers will always make life easier in a vegetable farming business.
What Will You Grow?
High value fast growing, high yield per square meter crops are better suited to an urban setting with limited space such as microgreens, salad mix, cherry tomatoes, etc. Rural areas with a lower cost on space open up the viability of more space hungry crops like pumpkins and melons. Ultimately it is important to grow what you can sell.
Will You Buy or Rent?
Sometimes you can’t afford to buy where the market for what you will grow is. It may be better to rent a space better suited to what you will be doing. Renting can also provides some flexibility in changing markets, crops or setups. You may start out farming on the residential land your live on or seek a separate commercial space for farming.
Hiring Employees
Depending on the scale of your operation you may need to hire employees up front or down the track. You may need full time, part time or casual employees at different times of the year. You may even need to hire contractors instead to keep costs down. Find out more about your requirements and obligations in this 2021 update to Hiring An Employee.
Marketing
A website and social media are a fast and affordable way to communicate what you do to your market. Using search engine optimisation (SEA) is a great way to maximise that investment. Note that if you want to have a ‘.au’ designation on your website, you will need to have an ABN as part of the domain name registration process.
The name your vegetable farming business operates under is the first step in branding and developing goodwill in the market. if your business name will be anything other than your legal name your should register your business name. Find out more about the difference between legal and business names.
You may want to protect your goodwill further, especially if you are selling to consumers you. Investing in a trademark is vital to protecting the goodwill you may build in your business to the exclusion of other businesses. Trade marks can protect business name and products. It can be a bit complicated, you can find out more here.
Finally
Having a business plan to map all of these considerations and more is a great way to structure and organise yourself. It also makes it easy to refer back to your vision when things get a bit hectic.
