Pre-Venture

Plenty of people would love to break into farming, but beginners’ number-one barrier is access to land. With so much farmland already claimed—by older farmers but also increasingly by investors, corporations, and developers—desirable acreage is hard to come by. Plus, the price of farmland in the U.S. is sky-high.

This guide covers a wide array of topics, such as regulations and licensing, selecting a food processing facility, developing products, buying equipment, labeling and packaging, marketing, insurance and liability issues, and concludes with potential exit strategies when the time comes to close or sell the business.

Food businesses should align their products and branding with their target consumers and should use market research to understand what the marketplace is asking for. Acquiring and keeping customers is what drives successful businesses and customer preferences must be met in order to have a financially viable business.

The single most important thing to do when starting a farm is to create a month-by-month cash flow projection. In the short term, cash flow is much more critical than profitability, because if cash flow is negative, the farm cannot survive once cash runs out. Profitability comes into play when the farmer is ready to retire or pass it on to the next generation.

Food businesses should know the role that online sales will play in their revenue stream and in their business model. Consumers are starting to become omnichannel in their food shopping expectations. Like most things in food entrepreneurship, it is best to let your customers lead the way, and if they expect to find you online, go online and conquer.

In a marketplace with rapidly changing food preferences, restrictions, diets and ethical concerns around food production, one of the biggest challenges is figuring out how to deliver a product that solves enough problems for the right customers while building a strong relationship with them.

These helpful templates help you build your financial projections, including, your sales and distribution forecast; cost of goods sold (COGS) and other expenses forecasts; capital expenditures forecasts; and your accounts receivable (AR), accounts payable (AP) and inventory forecasts. These projections can help inform your proforma financial statements.

Ted LeBow of Kitchen Table Consultants joins Tera to offer guidance for food and farm entrepreneurs affected by the coronavirus pandemic. They discuss the importance of staying calm, knowing your cashflow, prioritizing certain expenses to free up cash and communicating honestly with vendors, suppliers and banks.

Women found innovative food and farm businesses all the time, yet they still have a harder time landing investment than male entrepreneurs do. Part of the issue is decision-makers in the investment world are predominantly men. Regardless, it is still entirely possible for female founders to raise money successfully. Gaining financial literacy is the first step. They need to be exceptionally well-versed in their needs and numbers and go into investment discussions with confidence.

The food and beverage sector is a hotbed of innovation, a big reason why investors have flocked to it in recent years. Even now,...