Ready to start your own farm but lacking major funds? Farmer Mbali Nwoko advises new farmers to start small and gradually grow. Being frugal and putting a lot of work into planning helps you manage the risks and can mean the difference between making a success and losing all the money you invested into your business.
When I began my farming journey, I invested about R50 000 towards the business. I had to ensure that R50 000 could carry me for the next two, three to four months, in paying for my operation’s expenses before I made my first sale from the crops that I had planted.
Even if you don’t have enough capital, perhaps you also have R50 000 saved up, just like I did, or maybe you have much less. Whatever the amount at your disposal, it is important that you can stretch this capital to last you a couple of months. This capital needs to keep you going so you can pay whatever operational costs that might arise.
It is vitally important at this stage in your new farming venture to keep these operating costs as low as possible by considering strategies like leasing, rather than buying farming land or expensive agricultural equipment, and by getting your hands dirty to decrease the costs associated with hiring workers. Basically, you need to keep your expenses as low as possible while ensuring that you’re producing the best possible produce.
However, don’t confuse being frugal with shooting yourself in the foot by failing to secure experience and help if needed. If you’re new to farming, a good investment will be to hire someone with more experience. Alternatively, joining local farming community groups or asking surrounding farmers to share their experiences will prove invaluable.
When it comes to managing your finances, it certainly pays to plan. Establish the growing time of the crops you have in mind, the cost of seeds or how much livestock you’ll buy and then work backwards to estimate how soon you’ll begin making money.
‘Learn from those who know the land.’
Whether new farmers apply for a loan or simply use their savings, having a business plan is vital. This will help you to determine what you’re farming, when it will be ready for sale, who your customers are and how you plan to market and sell your products. Plan for different phases of growth, so you know where you’re going.
Take small steps in the beginning, stay focused on your first goal and, as your cash flow increases, move to the next phase of your plan. In the long run, this also helps you manage your risks much better instead of investing large sums of money from the on-set and having to lose your entire investment due to unforeseen circumstances.