Selecting New Enterprises for Your Farm
Choosing new enterprises for the farm is one of the most important decisions most farmers make, especially if the new endeavor is not one of the traditional crop or livestock enterprises. Ongoing uncertainty about tobacco has led many KY farmers to investigate new products for their farm enterprise mix. Analyzing the production practices, the economics, and the marketing of a new enterprise can be a challenging task. Production information, budgets, and market sources may not be readily available.
A PRIMER for Selecting New Enterprises for Your Farm is the name of a publication released by the Agricultural Economics Department at the University of Kentucky. PRIMER is an acronym that represents six important factors to remember when investigating any new enterprise. The six factors are Profitability, Resources, Information, Marketing, Enthusiasm, and Risk. The PRIMER publication includes worksheets for each of the factors that users can complete to help with their analysis.
The Profitability worksheets can help develop an enterprise budget along with annual and long run cash flow estimates. The Resources worksheet asks for an inventory of physical assets as well as managerial and labor resources. New enterprises have new activities schedules and labor demands. The Resources worksheet asks for a labor flow which may be as important as cash flow.
The Information worksheet is to help put together the knowledge base that new opportunities require. Remember, the more unusual the enterprise, the harder information will be to find. Marketing is the key to success or failure of any new business endeavor. To address this key issue the PRIMER publication has four worksheets devoted to market identification and development. In the past we sold farm products. In the future we will market them.
Enthusiasm is the next letter in PRIMER. Perhaps it should be first. Without enthusiasm and a set of specific, measurable, attainable goals the new enterprise is likely to fail.
The PRIMER is not a substitute for a full blown business or marketing plan. It is a good place to start. It won't answer all the questions, but it will make sure you ask them.
A PRIMER for Selecting New Enterprises for Your Farm is available at county extension offices or on the Web at www.uky.edu/Ag/AgEcon/pubs/ext_aec/ext2000-13.pdf.
For More Information
For additional information about the A PRIMER for Selecting New Enterprises for Your Farm, please contact, Steve Isaacs or Tim Woods.