Start-up Costs & Funding

I’ve been farming long enough now (on other people’s farms) to have a pretty good idea of what kind of infrastructure and equipment I wanted.  I have seen how many farms create space for their CSA members, wash their produce, store their equipment, and select tools to manage their field operations.  Now, I know that many farmers follow the “boot-strap” method of finance - just buying the equipment and buildings they can pay for out of pocket, adding more as time goes on.  I decided to do it differently.

The more I thought about it, the more I came to believe that spending big and taking on debt was worth it, because it would allow me to operate my farm at a scale that would be economically viable, with a level of labor that I could handle.

So I made that giant list of everything I thought I needed, and put a price tag next to each one…...and it was big: $104,868.  And this didn’t include annual operating costs or working capital!  Was this did get me was: a pump set-up for the well, (2) 30’x96’ greenhouses, a 14’x24’ CSA shed, a 24’x24’ washing/storage shed, a fence, a tractor, a tiller, a chisel plow, a cultivator, a manure spreader, a lime spreader, a disk, a bed shaper, a mulch layer, and many, many more hand tools and supplies.

Now, I’d been saving money for many years as best I could.  But this amounted to just $33,000.  Still a long way to go.  Then, in a stroke of good fortune, I entered, competed in, and won one of the Grand Prizes in “Economic Fuel - The Humboldt Student Business Plan Competition”.  More on this later, perhaps, but this added another $25K!

I was still $47,000 shy of my start-up hard costs.  I also needed an additional ~25K to cover operating costs and keep me from going broke until my sales grew.  So I applied for loan funding.  With the help of an awesome non-profit called “California FarmLink”, I was able to apply for and receive loan funding from CalCoastal Rural Development Corporation - a financial development bank specializing  in ag loans.

So here I am today, with the funding I need.  The infrastructure is nearly complete, the major tools and supplies purchased.  Now it’s all about getting the word out: signing up members for awesome weekly harvests through my CSA, and exploring additional markets.

In a future post, I’ll share a nice long list of some of those actual costs.

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