How to Start a Profitable Small Produce Garden Written by Annette Dunlap, MBA Extension Associate Business Management/Value-Added and Alternative Agriculture NC State University This information packet contains: A suggested list of equipment and supplies A guideline to developing goals for your business A recommended Action Plan to start your business A budget outline Introduction: A small produce garden offers you an opportunity to grow plants as a profitable enterprise. Planting and nurturing vegetables, herbs, fruit and/or ornamentals (flowers), you begin to understand the relationship of the soil to plant growth and development. The decisions that you make about your business help you understand the challenges that larger producers face. Finally, your self-motivation and sense of responsibility can offer you a tangible reward: the money earned from your hard work! Part I: Equipment and Supplies What you will need: (a) (b) (c) (d) (e) (f) (g) (h) (i) Land Access to water Equipment Seed Fertilizer Customer Prospect Lists or Sales Location Business Cards Start-up capital Business plan
(a) Land Before you select an available piece of land, outline your plans regarding vegetables and/or flowers that you plan to grow. This will help you to determine how much land you will need. Crops that grow vertically, such as peppers, tomatoes, corn and certain types of green beans and peas, require less space than plants that are bushy, such as squash, cantaloupe, watermelon and cucumbers. Cucumbers can be trellised to reduce the amount of land required. For more information on vegetables use the following reference from NC Cooperative Extension: http://www.ces.ncsu.edu/depts/hort/hil/pdf/hil-8103.pdf.
How to Start a Profitable Small Produce Garden It is a good idea to soil sample the land you select. What kind of soil do you have? How many nutrients are in the soil? What is the pH? Your cooperative extension agent can assist you in obtaining soil samples, sending them to the state laboratory run by NCDA&CS and helping you to interpret the results. The types of soils vary dramatically across the state and understanding them will enable you to provide proper management for your plants. In what ways might you improve your soil? The addition of organic matter can increase fertility, improve soil texture and water holding capacity. Be careful, however, about the use of compost to enrich your soil. Good Agricultural Practices (GAPs) suggest that composted material be thermally treated to reduce the danger of containing microbes that can cause foodborne illness in produce crops that will be consumed raw. Talk to your extension agent about testing compost for the absence of disease-bearing bacteria. (b) Water Access to water is essential to a successful growing season. Because much of your produce will be consumed raw, the water you use should come from a potable (safe-to-drink) source. If possible, find a way to spray your water onto your crops (clean hose with a sprayer nozzle). If you are carrying the water in buckets to the field, make sure your buckets are clean. It is especially important that you use the cleanest possible water within two weeks of harvesting your garden (c) Equipment Tiller or small tractor (depending on size of plot) Hoe Mulch for moisture retention and weed control (optional) Spade and/or shovel Garden hose(s) Buckets Pruners Baskets or containers to place harvested produce Signs (to display product name/price) Table(s) to display produce Transportation to market – preferably a truck What other equipment might be useful for your venture?
(d) Starting to Grow Work with your cooperative extension agent to identify the optimal mix of crops for your garden plot. Some things to consider as you plan are: Prepared by Annette Dunlap, MBA Extension Associate, Value-Added & Alternative Agriculture, NCSU 2007 Page - 2
How to Start a Profitable Small Produce Garden Space requirements for certain types of vegetables or fruits Typical yields for each crop Planting of heirloom varieties to increase your product offerings Specialty crops like cut flowers or herbs Revenue potential for various crops (for example, tomatoes typically are sold by the pound and earn more revenue than cucumbers, which are sold by the piece; also tomatoes take less land, whereas cucumbers spread out unless they are trained to a trellis)
(e) Plant Nutrition and Plant Problems Talk with your cooperative extension agent about the need to use fertilizer to improve the yield of your garden. Fertilizer is a combination of three elements necessary for plant growth and development: nitrogen, phosphorus and potassium. So, a bag that says “10-10-10” means that there is an equal amount of each of the three nutrients. In a 100 pound bag of fertilizer, a 10-10-10 analysis means that there are 10 pounds each of Nitrogen, Phosphorous and Potassium. Your soil analysis will tell you the appropriate fertilizer to purchase to improve your yields. If you choose to use compost as your fertility source, follow Good Agricultural Practices in the application and incorporation of the organic matter into your soil. You will also want to discuss the advisability of how to control insect pests, weeds and disease. What are the most sustainable ways to produce your product? You may consider using commercially available chemicals for weed, disease and/or insect control. The possibility of biological control agents can limit the number of certain garden pests. Different mulches, including wood chips, plastic, and pine needles reduces weeds and the need for chemical weed control. There are additional integrated pest management practices that can minimize your need for chemical pest control. Talk to your extension agent about the opportunities to use these methods to reduce your operating costs limit your exposure, and the exposure of your crops, to chemical pesticides. (f) Customer Prospect List or Sales Location Your profit will come from the sale of your produce, and so it is important that you develop a customer base and/or a highly visible sales location, along with a strong promotional effort. Do you have a local farm market that you could rent a booth? Would a roadside stand be a better alternative? As soon as you have planned your garden, begin to talk about it with friends and family members. Consider creating and making copies of a flyer or brochure that tells about your garden, what you have planted and when the various vegetables will be available. It is important that you designate specific days of the week and times of the day and stick to that schedule weekly. People are creatures of habit, and they plan Prepared by Annette Dunlap, MBA Extension Associate, Value-Added & Alternative Agriculture, NCSU 2007 Page - 3
How to Start a Profitable Small Produce Garden their shopping trips around where they want to go and when they know produce is available. Use attractive and easy-to-read signs to identify your garden, each produce item available for sale and the pricing (per unit, per pound, per dozen, etc.). Dress neatly – you are on the job! Remember that good customer service is part of the product you are selling, so be polite, offer to be helpful and be knowledgeable about your products. People respond favorably to politeness – courtesy is a great sales tool! (g) Business Cards Create business cards to leave with your customers and prospects (can be printed on the computer). (h) Start-up Capital Talk to your Cooperative Extension Agent about possible start-up capital. (i) Business Plan Your business plan should include: (examples are below) A budget A list of goals An action plan
Prepared by Annette Dunlap, MBA Extension Associate, Value-Added & Alternative Agriculture, NCSU 2007
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How to Start a Profitable Small Produce Garden Part II: Recommended Action Plan: 1. Make up a list of products that you are willing to offer to people. Will you be growing vegetables, flowers, herbs, fruit, potted plants? Think about the length of the growing season and how you might maximize the sale of produce seasonally. Consider offering vegetables like greens and peas in the spring and in the summer focusing on squash, tomatoes, eggplant, following in the fall with winter squash, more greens and other suitable plants. How might you add value to your products? Think about ideas like cut flowers arranged in bouquets, shelled butter beans or perhaps herbal soaps? Look at your school and activity schedule – block out those times and clearly identify the days and times you are available for work Inventory already existing equipment and supplies at home that you can use for your business (be sure to get an okay from your parents). Identify what you need to purchase to complete your equipment and supply needs. Get prices by visiting at least two different stores. Create a budget that shows what it will cost you to start up your business; the cost for each job and what you need to charge in order to make a profit (a sample budget is attached). Make up a customer prospect list of people who might be interested in purchasing produce from you. Call the people on this list and find out if they are interested and when they might like to buy. Establish operational hours. Find out from your local government what the permit requirements needed to sell at a local farm market or roadside stand. Contact your extension agent for further assistance. Create a business card with your name, your address and your contact information (you can do this attractively and inexpensively with desktop publishing software, such as Microsoft Publisher). Leave two cards with every new customer: one for the customer to keep and one to give as a referral. Visit a couple of farm market vendors to get prices on their produce. Keep this list handy when you are talking to customers, so that they will know that you are serious about your business and that you can save them time by having already obtained useful information. Keep records of the amount of produce you harvest, sell and donate. Use a spreadsheet program or create a table by hand, these records will help you more efficiently manage your project next year. (See budget guide below.)
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Prepared by Annette Dunlap, MBA Extension Associate, Value-Added & Alternative Agriculture, NCSU 2007
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How to Start a Profitable Small Produce Garden 10. Get started by doing small, easy-to-fulfill projects and build your reputation and your cash that way. Manage your cash by taking into account the seasonality of your business. You can expect your business to stop between the end of October and the beginning of March.
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Part III: Goals It is a good idea to set goals to help guide the decisions about your business. Goals help you focus on the most important details of operating your business, and goals help you distinguish between what is important and unimportant with regard to decisions. An acronym to remember when developing your goals is SMART. This stands for: Specific Measurable Achievable Realistic Timebound Here are some suggested ideas for goals that you can “fine tune” to meet your specific plans for your business: The total number of customers you want to acquire and serve The date you want to start your business The amount of money you want to earn in a season The plans you have for the money you earn
Notice that each of these goals can have a date or numeric value assigned to it, making each both specific and measurable. Note that the proposed start date of your business makes it “timebound”. You, perhaps with your parents or 4-H Advisor, can determine what is both achievable and realistic, given your other time demands and your available capital. The purpose of goals is not to create pressure or anxiety. Instead, properly established goals can serve as a good road map to help you move from the starting point of your business to the first of many steps toward successful entrepreneurship.
Prepared by Annette Dunlap, MBA Extension Associate, Value-Added & Alternative Agriculture, NCSU 2007
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How to Start a Profitable Small Produce Garden Part IV: Budget Equipment (list below any equipment or one-time purchase supplies; include the cost of signs, business cards, bags or other nonproduction related expenses)
Total, Equipment/Supplies Production Expenses: Seed Fertility Expense Fuel Expenses: (a) Tractor/tiller (b) Vehicle Farmers’ market stall fees Equipment repair costs Related vehicle expenses
Total production expenses Income Date (identify each date you make a sale) Month 1 Month 2 Month 3
Monthly Totals Total Revenues (all of your income) Total Costs (all of your expenses) Net income (Revenues – Costs) Prepared by Annette Dunlap, MBA Extension Associate, Value-Added & Alternative Agriculture, NCSU 2007 Page - 7