how to start farm business plan

If you haven’t got the capital to start your farm, you may be eligible to apply for a grant or loan . Here are a few examples:

• The Small Business Innovation Research grants
• The Northeast Sustainable Agriculture Research and Education Program
• USDA Value-Added Producer Grants

You will need to research whether your planned operation is acceptable with your local ordinances. Ideally, your property and land have to be zoned for agriculture . In Pennsylvania, the Municipalities Planning Code of 1968 controls zoning.

Machinery and equipment play a key role in agricultural enterprises. Good machinery management is required if you want to provide a reliable service for your agricultural enterprise at the lowest cost.

Farm Management Basics

Farm management is a collective term for various management strategies and methods you’ll need to keep your farm productive and profitable. You can use the methods regardless of the size of the farm you're starting .

Diversification is a way for you to increase your income or extend your farming season. Understanding how to set your prices is a crucial skill to learn.

Before you start your food for-profit business , you need a clear business plan . The business plan helps you define your reasons for entering the food business, the type of enterprise you want to run, and the goals you want to achieve. A business plan is fundamental for effective business management .

Penn State Extension has published a Farm Management Handbook to help you learn how to manage your farm successfully. You can use Quickbooks to help you manage your farm business.

You will have to purchase crop insurance to protect against the loss of your crops due to natural disasters or revenue loss due to declines in agricultural commodities’ prices. In the US, the federal government subsidizes premiums.

Access to reliable legal advice is helpful when making major business decisions, such as buying or transferring land. Free legal services for farmers are available through Penn State Law.

Raising Livestock and Growing Crops

Agriculture is the art and science of cultivating the soil, growing crops, and raising livestock . You can choose to specialize in agronomy , horticulture , livestock, or a combination of all three. There’s a lot involved whichever branch of agriculture you choose. But don’t worry because plenty of information is available, such as the Penn State Extension beginning farmer project .

If you want to raise beef cattle , you need to understand nutrition, health, breeds, and marketing. Proper nutrition and herd management are essential for generating income on a dairy farm . To be a successful sheep or goat farmer , you also have to manage various resources, including land, labor, capital, feed, and management.

If you want to raise hogs , your farm will require a good infrastructure, constant water and feed, and good fencing. Small poultry flocks , on the other hand, require a sound knowledge of the costs and potential income. This information is valuable when you make future decisions.

For those looking at crop production, soil management is critical. Once the soil’s quality is optimized, you can look at how best to grow your seeds and seedlings . A vital step in producing a successful crop of vegetables is stand establishment . This means your crop gets off to a quick, healthy, and unform start in the field.

If you want your fruit growing to be more than a hobby, creating a marketing plan for fruit crops is essential. Site planning and preparation are also necessary for the success of a tree fruit farm. You can expect a commercial apple orchard to be productive for at least 20 years, so long-term plans are crucial. Investment in a peach orchard may also be spread over a long period.

• Exploring Farming 48
• Starting a Business 81
• Introduction to Agronomy 5
• Introduction to Horticulture 96
• Introduction to Livestock 37
• See All Starting a Farm 265
• Conferences
• Online Courses
• Guides and Publications
• Tools and Apps
• Penn State on Twitter

You May Also Be Interested In...

An official website of the United States government Here’s how you know

• Translated Resources |
• Service Centers |
• Local Dashboard

Farmers.gov is not optimized for this browser. Please use the latest versions of Chrome, Edge, or Safari for the best experience. Dismiss

Find your state/county's agriculture data and USDA resources on your farmers.gov Local Dashboard !

How to Start a Farm: Build Your Business

Lean on USDA and others to equip yourself with the business knowledge to build your operation. After your USDA Service Center visit, establish your operation by registering your business and obtaining licenses, permits, and a tax ID number. You should also consider educational opportunities, business management components, and insurance. 

Keep reading about establishing your business below, get an overview of the beginning farmer's journey , or jump to a different section of the farmer's journey.

On This Page

Grow your business knowledge.

Attend field days, workshops, courses, or formal education programs to build necessary skills to ensure you can successfully produce your selected farm products and/or services. Many local and regional agricultural organizations, including USDA and Cooperative Extension, offer training to beginning farmers.

• Cooperative Extension  offices address common issues faced by agricultural producers, and conduct workshops and educational events for the agricultural community.
• extension.org is an online community for the Cooperative Extension program where you can find publications and ask experts for advice.
• SCORE offers free mentoring, workshops, and online resources for entrepreneurs, small business owners, farmers, ranchers, and agribusiness.

Determine the Legal Structure of Your Business

A business structure refers to how a business is legally organized and can affect how a business is regulated, taxed , and more. Deciding the best structure for your business is one of the most important decisions you will make.

Decide which form of business ownership is best for you:

• sole proprietorship,
• partnership,
• Limited Liability Company (LLC),
• corporation,
• S corporation,
• cooperative.

The structure of farm business you choose may affect eligibility for certain USDA programs and will determine how and where you will need to register your business and which taxes you must pay.

The Sustainable Agriculture Research and Education (SARE) program provides guidance to help farmers decide which legal structure is best for your farm operation as well as detailed information about the characteristics and requirements of each legal structure. Review SARE's Farmers' Guide to Business Structures to learn more about business structures for farm operations.

Register Your Farm Business

Once you determine your business structure, you will need to obtain the necessary federal and state tax identification numbers to register your business . Registering your business and becoming familiar with your federal and state tax responsibilities will help you file your taxes accurately, make payments on time, and avoid potential penalties.

USDA has financial information and resources related to USDA program payments, asset protection, and the important relationships between federal and state income taxes and USDA farm programs.

Federal Tax ID Number (EIN)

As a beginning farmer you will need a federal tax ID number , also known as an Employer Identification Number (EIN). An EIN is used to identify a business entity, hire employees, apply for business licenses, permits, and more. The EIN is necessary for reporting to the IRS. You may apply for an EIN online .

The IRS provides an Agricultural Tax Center with numerous useful documents, including the Farmer’s Tax Guide that explains how the federal tax laws apply to farming.

State Tax ID Number

Tax requirements vary by state. Visit the SBA website to learn about your state’s laws regarding taxes and for specific steps on how to get a state tax ID number.

Obtain Business Licenses and Permits

Obtain the federal, state, and local licenses and permits required for your business. Licenses, permits, and other types of registrations vary by state and locality. Licenses and permits needed may also vary depending on the farm business activity and how those activities are regulated at a federal or state level. Review SBA’s Apply for licenses and permits page for more information. It’s also a good idea to contact your State Department of Agriculture to ask which licenses and permits may apply to them.

Purchase the Insurance You Need

Agriculture is an inherently risky business. Some risks are everyday business risks; some risks are brought on by natural disasters. Producers need to regularly manage for financial, marketing, production, human resource, and legal risks.

There are many types of insurance to consider for the business, employees, and the crops and livestock you may be producing. The following examples are some types of insurance to consider, but not all operations might need these. For example, if there are no employees in their business, they won’t need workers’ compensation insurance. Additionally, the laws requiring insurance vary by state so you will need to check your state website for any additional insurance you might need.

Liability insurance protects against claims resulting from injuries and damage to other people or property. Liability insurance policies cover any legal costs and payouts from the insured producer if they are found legally responsible.

Property insurance provides financial reimbursement to the landowner or renter of a structure and its contents in case of damage, theft or if someone else is injured on the property.

Crop insurance provides financial protection against losses due to adverse events including drought, excess moisture, damaging freezes, hail, wind, disease, and price fluctuations.

Workers' Compensation and Unemployment and Disability Insurance is required by the federal government for every business that has employees.

Health insurance can be purchased for yourself, family members, or as part of a benefits package for your employees. HealthCare.gov and USA.gov make available tools to help you understand what you need to know about new insurance options and other health care changes to help you find health-care related resources.

Life insurance can help protect your farm and help keep it in the family by providing money to pay for various farm expenses, from livestock to crops to new facilities.

USDA Crop Insurance

USDA’s Risk Management Agency (RMA) offers crop insurance to help you manage risk across your operation. Crop insurance helps mitigate production and revenue risks and supports a healthy rural economy. There are many types of insurance products available for a wide variety of production practices, including organic and sustainable agriculture. Beginning farmers and ranchers are also eligible for certain benefits designed to help as you start your operation.

Use RMA’s Agent Locator to find a crop insurance agent near you. Crop insurance may be required to receive loans.

Insurance is required when applying for a loan with FSA. Additional insurance and coverage period may differ depending on the type of loan.

Understand Employer Responsibilities

If you plan to hire employees for your farm operation, you will need to understand employer responsibilities and learn the legal steps you will need to take to hire employees. Then, you should establish a farm work plan to hire and schedule farm labor.

The US Department of Labor administers laws that protect several types of farm workers, including:

• Fair Labor Standards Act
• Migrant and Seasonal Agricultural Worker Protection Act

There may also be relevant state-based laws. For more information, visit your State Department of Agriculture .

H-2A Visa Program

The H-2A provisions of the Immigration and Nationality Act (INA) authorize the lawful entry into the United States of temporary, non-immigrant workers (H-2A workers) to perform agricultural labor or agricultural services of a temporary or seasonal nature. Learn about hiring agricultural workers through the H-2A Visa Program .

Occupational Health and Safety

The Occupational Safety and Health (OSH) Act is administered by the Occupational Safety and Health Administration (OSHA). Employers covered by the OSH Act must comply with the regulations and the safety and health standards promulgated by OSHA. Employers also have a general duty under the OSH Act to provide their employees with work and a workplace free from recognized, serious hazards. OSHA enforces the Act through workplace inspections and investigations. Compliance assistance and other cooperative programs are also available.

Find health and safety requirements and resources for employees on the Occupational Safety and Health Administration’s website . Be sure to also check your state-based laws.

An Agricultural Guide to Federal Labor Law

This video guides agricultural employers and advocates through compliance requirements under the applicable laws, and provides real world examples of compliant and non-compliant employment conditions and practices.

Video: Cultivating Compliance - An Agricultural Guide to Federal Labor Law

Once you have set up your business, it’s time to start producing your products and growing your business. USDA has tools to help producers grow their businesses and build new markets for their products both at home and abroad.

5. Sell your farm products

How to Start a Farm with USDA

Get an  overview of the beginning farmer's journey  or jump to a specific page below.

Find Your Local Service Center

USDA Service Centers are locations where you can connect with Farm Service Agency, Natural Resources Conservation Service, or Rural Development employees for your business needs. Enter your state and county below to find your local service center and agency offices. If this locator does not work in your browser, please visit offices.usda.gov.

Learn more about our Urban Service Centers . Visit the Risk Management Agency website to find a regional or compliance office  or to find an insurance agent near you.

•  1-800-815-8559
•  Locations
•  Enroll in Online Banking
•  Online Banking Login

20 Tips You Should Consider When Creating Your AG Business Plan

by FCSC | May 28, 2024 | FCSC Blog , Industry Insights

Embarking on an agricultural venture, whether it’s running a beef ranch out East or managing a large produce business, is both thrilling and daunting at the same time. Creating an effective, sustainable, and profitable business plan from which to run your entire company appears overwhelming at first glance. However, our Farm Credit of Southern Colorado team is here to help you create a solid business plan or recreate one you already have in place to improve upon. We fully understand the myriad considerations of starting or enhancing your agricultural enterprise. From navigating legal structures to defining your goals and objectives, establishing governance strategies, and making crucial decisions, we’ve got you covered every step of the way.

Let us make the development of this critical document easier for you! We’ve put together a guide that walks you through all the intricacies of organizing a new plan and ensures your journey toward viability is smooth sailing.

How to Create a Helpful Business Plan for Your Farm

A well-crafted business plan is one of the most important foundational pieces of planning for success in the agricultural realm. Whether you’re drafting your very first business plan or revamping an existing one, it’s essential to cover all your bases to be well-prepared for all situations. Here are some key points to consider covering within your plan:

1. Operational Plan: Map out your vision, your mission, and the strategies you will use to achieve your goals. A clear roadmap will guide your actions and keep you focused on your goals.

3. Set Goals and Budgets: Creating a business growth strategy can be more manageable when you start from where you would like your business. Goals give you focus, create budgets, and help you understand if your plan is reasonable. They can also validate whether you’re on the right growth path.

4. Licenses and Certifications: While every farming operation’s certification and license will differ depending on the type of product they produce, it’s crucial to complete your research and ensure you are fully certified and licensed where you need to be. Ensure there is a yearly check-in for reestablishments of all documentation as well.

5. Company History: Record all the pivotal moments in your business from its origins to the present day to organize milestones, accomplishments, and the work of influential figures into a cohesive narrative. It is helpful to record your farm’s progress and story.

6. Inventory: Markup a consistent monthly or quarterly game plan to check in and count your farming inventory. Make sure to include physical count, spot checking, cycle counting, and new product ordering, amongst any other item nuances you may have in your operation.

7. Establish Sales and Distribution Channels: Identify the most suitable sales and distribution channels for your agricultural products to calculate your potential net profit. Explore options such as direct business-to-consumer, partnerships and networks with distributors, and growth paths to get into larger markets and supply chains.

8. Financing Opportunities: Find ways to obtain financing, grants, or loans to further your growth and expansion. Identify potential sources of income and create a comprehensive budget to support your business goals, including forward acquisitions and other growth options.

9. Emergency Protocols: A guide that includes roles, responsibilities, relevant contact information, and resources available in the case of emergency. This plan should consist of assessing damage, protecting property, minimizing damage or business disruptions, and determining the appropriate actions after the incident.

10. File Records: Keep proper records of finances, transactions, inventories, and other vital information to track progress and make informed decisions. Accurate recordkeeping is critical for compliance, financial analysis, and strategic planning.

11. Risk Management: Identify potential risks and develop strategies to mitigate them, protecting your business from unexpected challenges. Engaging and managing risks will help protect your assets and business continuity.

13. Mental Health: Prioritize self-care and well-being to ensure resilience and sustainability. Farm work can be demanding, and maintaining mental and emotional well-being is essential to long-term success.

14. Field Transition Plan: Define follow-up procedures and plans to ensure a smooth transition of ownership and operations. Succession planning is essential to preserve the legacy of your business and ensure its continuity across generations.

15. Environmental Stewardship: Create a map to implement sustainable farming practices, conserve natural resources, and promote biodiversity. A solid hold on your business’ sustainable operations is crucial to appeal to the current customer market in this greener age.

16. Environmental Preparedness: Due to weather and environmental factors like droughts, freezing temperatures, hail, pests, and diseases, you must be prepared to plan and react to each. Adapting to climate change and reducing environmental risks requires careful planning and adaptation that fits your personal business needs.

17. Knowledge Expansion: Ensure you have a game plan encouraging you and your employees to expand their knowledge bases and improve their expertise constantly. Focusing on further education is the steppingstone to sustainability and diversification within your organization.

18. Growth Strategy: Conduct a detailed outline that lists your actions to expand operations, increase revenue, and boost market reach. You’ll want to evaluate the financial, market, and industry positions to establish clear objectives to help your business develop over time.

19. Labor and Workload: Farming can be physically demanding and labor intensive, requiring long hours, especially during critical periods such as planting or harvesting. Managing and coordinating workers’ energy can be difficult, especially in large operations.

20. Marketing: Create a comprehensive marketing strategy to promote your product or service, reach your target audience, and generate sales. Effective marketing strategies will help you build brand awareness, attract customers, and generate revenue. Utilize social media platforms to target your audience directly.

With Farm Credit of Southern Colorado by your side, you’ll be equipped with the knowledge, resources, and support you need to thrive in the competitive agricultural landscape. Our team is here to help not only with the ag financial and ag insurance side of things but also with your farm’s business planning and operational logistics. We take pride in also being an educational resource for our customer-owners, so never hesitate to ask for assistance ! Let’s embark on this journey together and pave the way for your local agricultural venture’s success.

How to Start a Small Farm Business

• Swarthmore College

Treehugger / Lexie Doehner

• Urban Farms
• Planting Guides
• Indoor Gardening

If you want to start a small farm business, you may be wondering what step to take first. You might not even have land yet, but you are still thinking and planning for the time when you will make your move. And finding farmland is one important step in farming - one that you'll want to take after considering some other factors.

Learn About Farming

You can't go wrong starting with this step. If you're new to farming, learn everything you can about it within the time you have. But be reasonable, too. You can't know everything there is to know. Some learning will have to be on the job, and trial and error is messy, time-consuming and sometimes costly. Yet it's inevitable with farming, so embrace the process. But learn some, too. Balance.

If you can find a mentor - someone you can learn from directly, perhaps in your community now or where you hope to farm - it can be extremely helpful. If you haven't already, work on a farm. Volunteer. Gain experience before you begin.

Design and Plan Your Farm

An important part of starting your farm business is defining what it will be. Do you want to have a micro-scale vegetable farm? Do you plan to grow acres of hay for other farmers? Maybe you want to have a diversified farm - a small-scale operation that grows a variety of animals and crops. You might even be wondering how to start an ecotourism farm, where people will come to stay to see the workings of your farm and perhaps even participate in farm chores.

Write a Business Plan

You may wonder if you need a business plan . The short answer: if you want to start a business, you will need a business plan.   In the writing of the business plan, you will consider markets, supply and demand, as well as anything and everything that pertains to your farm operations, management structure, financial analysis, products, and price points. You may cycle between this step and the previous one, designing and planning because they are interconnected. But a business plan is a significant enough part of starting a business to take up an entire step. It's where you take your dreams and brainstorms and make them a reality.

Find Grants and Loans

You might not have all the capital you need to start farming on the scale that you'd like. You can start small, dip a toe in the water and see how you enjoy farming on a micro scale, using whatever you can glean from your monthly household budget to invest in the farm. But it might take a long time to get anywhere using this method, as you may not be able to invest a significant amount, enough to bring product to market. Grants and loans aimed at young and beginning farmers are out there! Help is available for established farmers, too. Programs offer subsidized equipment like high tunnels, assistance in certifying organic, and more. ​

Get Business Licenses and Permits

Your local and state law may vary when it comes to the requirements for establishing a small farm business.   But the basics are the same: you will probably need to register your business name, purchase a business license, get an employer identification number, and carry product liability insurance.

Set Up Finances

You will also need to decide on your business structure. Will this be a sole proprietorship, an LLC or something else? Contact an accountant to get information specific to your situation. Financial planning should be in your business plan. It's very important to set up a system for bookkeeping and accounting from the start of your small farm business.

“ First Steps .” U.S. Department of Agriculture.

“ Growing Opportunity: A Guide to USDA Sustainable Farming Programs .” U.S. Department of Agriculture.

• How to Start an Egg Business
• Details of a Small Farm Business Plan
• How to Buy Land for a Homestead or Small Farm
• Tips for Converting Small Farms to Organic Production
• Starting Your Small Farm from Scratch
• Invaluable Tips for the Beginning Homesteader
• How to Keep Farm Records
• How to Buy Goats for Your Small Farm
• How to Start a Small Farm
• 10 Tips for Starting a Plant-Based Diet
• Best Urban Farming Certifications
• How to Start a Hobby Farm
• Raising Pullets for Your Small Farm or Backyard Coop
• Small Farm Grants and Financial Assistance
• No-Dig Gardening Tips For Small Farms and Gardens
• Should You Raise Turkeys?

How to Start Livestock Farming: A Comprehensive Guide

Livestock farming, also known as animal husbandry, is a crucial component of the agricultural industry. It involves raising domesticated animals for various purposes, including meat, dairy, eggs, fiber, and other animal-derived products.

With the growing demand for animal-based products and the increasing emphasis on sustainable food production, starting a livestock farm can be a rewarding and lucrative venture.

Whether you’re a seasoned farmer looking to diversify your operations or a novice seeking to embark on a new agricultural endeavor, this blog post guide will provide you with valuable insights and practical steps to help you navigate the journey of starting a successful livestock farming business.

Understanding the Livestock Farming Industry

Table of Contents

Before diving into the specifics of starting a livestock farm, it’s essential to gain a comprehensive understanding of the industry. Livestock farming encompasses a wide range of animals, including cattle, poultry, sheep, goats, pigs, and others. Each species has its unique requirements, production cycles, and market demands.

Additionally, the livestock farming industry is governed by various regulations and guidelines related to animal welfare, food safety, environmental impact, and sustainable practices.

Familiarizing yourself with these regulations will help you make informed decisions and ensure compliance from the outset.

Determining Your Livestock Farming Goals

The first step in starting a livestock farm is to clearly define your goals and objectives. Are you aiming to produce meat, dairy products, eggs, or a combination of these? Do you intend to sell your products locally, regionally, or nationally? Will you be targeting niche markets, such as organic or grass-fed livestock?

Answering these questions will help you determine the type of livestock you should raise, the scale of your operation, and the resources required. It’s also essential to consider your personal interests, skills, and resources, as well as the market demand in your area.

Conducting Market Research

Conducting thorough market research is crucial for the success of any business venture, and livestock farming is no exception. Start by analyzing the local and regional demand for the products you intend to produce. Identify potential customers, such as grocery stores, restaurants, farmers’ markets, or direct consumers.

Additionally, research your competition and understand their pricing strategies, marketing approaches, and unique selling points. This information will help you position your farm competitively and identify potential gaps or opportunities in the market.

Selecting the Right Livestock

Once you have a clear understanding of your goals and the market demand, it’s time to select the type of livestock you will raise. Consider the following factors:

• Climate and environment : Different livestock species have varying environmental requirements, such as temperature, humidity, and terrain. Ensure that your farm’s climate and location are suitable for the livestock you intend to raise.
• Housing and infrastructure : Each type of livestock requires specific housing and infrastructure, such as barns, coops, fencing, and feeding systems. Evaluate the initial and ongoing costs associated with these requirements.
• Feed and water resources : Livestock require a consistent supply of high-quality feed and clean water . Assess the availability and cost of these resources in your area, as well as the potential for growing your own livestock feed.
• Breeding and reproduction : Determine whether you will start with young stock or breeding animals. Consider the costs and logistics of acquiring and maintaining breeding stock or partnering with breeders.
• Market demand and profitability : Research the current and projected market demand for the livestock products you intend to produce. Evaluate the potential profitability based on production costs, market prices, and your projected output.

Developing a Livestock Farming Business Plan

A well-crafted business plan is essential for the success of any livestock farming operation. It should outline your goals, strategies, financial projections, and operational plans. Here are some key components to include in your business plan:

1. Executive Summary

Provide a concise overview of your livestock farming business, including your mission, objectives, and unique selling proposition.

2. Market Analysis

Present your research on the current market trends, competition, and target customers for your livestock products.

3. Operational Plan

Describe your livestock production processes, including breeding, housing, feeding, and health management . Detail the equipment, infrastructure, and labor requirements.

4. Marketing and Sales Strategy

Outline your marketing strategies for attracting and retaining customers, as well as your sales channels (e.g., direct sales, wholesalers, retailers).

5. Financial Projections

Include detailed financial projections, such as start-up costs, operating expenses, revenue estimates, and break-even analysis.

6. Management and Organization

Describe the management team and their respective roles and responsibilities, as well as any additional staffing needs.

7. Risk Management

Identify potential risks associated with livestock farming, such as disease outbreaks, weather events, and market fluctuations, and outline strategies to mitigate these risks.

Securing Necessary Licenses and Permits

Livestock farming operations are subject to various regulations and laws, which may vary depending on your location. Before starting your farm, research and obtain the necessary licenses and permits, such as:

• Zoning and land-use permits
• Environmental permits (e.g., waste management, water usage)
• Animal welfare and health certifications
• Food safety and processing licenses (if applicable)

Consulting with local authorities and seeking guidance from experienced farmers or agricultural organizations can help ensure compliance with all relevant regulations.

Financing Your Livestock Farming Business

Starting a livestock farming business requires significant upfront investment in land, infrastructure, equipment, and livestock. Consider the following financing options:

• Personal savings or investments : Use your own funds to finance the initial start-up costs.
• Small business loans : Explore loan options from banks, credit unions, or government-backed programs designed for agricultural businesses.
• Grants and subsidies : Research available grants and subsidies for livestock farming, particularly those promoting sustainable practices or supporting new farmers.
• Crowdfunding : Consider crowdfunding platforms to raise funds from interested individuals or investors.

Remember to develop a detailed financial plan and projections to demonstrate the viability of your business to potential lenders or investors.

Implementing Best Practices for Livestock Farming

Successful livestock farming requires adherence to best practices in animal husbandry, sustainability, and ethical principles. Here are some key considerations:

1. Animal Welfare

Prioritize the well-being of your livestock by providing appropriate housing, nutrition, health care, and humane handling practices. Adhere to industry standards and regulations related to animal welfare.

2. Biosecurity

Implement strict biosecurity measures to prevent the introduction and spread of diseases on your farm. This includes proper sanitation, quarantine procedures, and controlling access to your livestock facilities.

3. Sustainable Practices

Adopt sustainable farming practices that minimize the environmental impact of your operations. This may include implementing waste management systems, responsible water usage, and regenerative grazing practices.

4. Record-Keeping

Maintain accurate and comprehensive records of your livestock, including breeding, health, feed, and production data. This information is essential for making informed management decisions and ensuring compliance with regulations.

5. Continuous Learning and Improvement

Stay up-to-date with the latest research, best practices, and technological advancements in livestock farming. Seek educational opportunities, attend workshops or conferences, and collaborate with other farmers to continuously improve your operations.

Marketing and Sales Strategies

Effective marketing and sales strategies are crucial for the success of your livestock farming business. Consider the following approaches:

• Direct Sales : Sell your products directly to consumers through on-farm sales, farmers’ markets, or community-supported agriculture (CSA) programs.
• Wholesale Markets : Establish relationships with wholesalers, distributors, or retailers to sell your livestock products on a larger scale.
• Online Sales : Leverage e-commerce platforms and social media to reach a wider customer base and sell your products online.
• Agritourism : Offer farm tours, educational programs, or on-farm experiences to generate additional revenue streams and promote your livestock farming operation.
• Branding and Marketing : Develop a strong brand identity and marketing strategy that highlights the unique qualities of your products, such as sustainable practices, animal welfare standards, or local sourcing.

Remember, building a loyal customer base and maintaining strong relationships with buyers or distributors is essential for long-term success.

Embracing Technology and Innovation

The livestock farming industry is continuously evolving, with new technologies and innovations emerging to enhance efficiency, productivity, and sustainability. Embrace these advancements to stay competitive and improve your operations:

• Precision Livestock Farming : Implement technologies such as sensors, cameras, and automated systems to monitor and optimize animal health, behavior, and environmental conditions.
• Genetics and Breeding Techniques : Explore advanced breeding techniques, such as artificial insemination, embryo transfer, or genetic selection, to improve livestock traits and productivity.
• Sustainable Energy Sources : Investigate renewable energy sources, such as solar, wind, or biogas, to power your livestock farming operations and reduce your carbon footprint.
• Automation and Robotics : Implement automation and robotic systems for tasks such as feeding, milking, or waste management to increase efficiency and reduce labor costs.
• Data Analytics : Leverage data analytics tools to analyze production data, optimize resource allocation, and make data-driven decisions for continuous improvement.

By embracing technology and innovation, you can enhance productivity, reduce costs, and improve the overall sustainability and profitability of your livestock farming business.

Building a Strong Support Network

Starting and running a successful livestock farming operation can be challenging, especially for new farmers. Building a strong support network can provide invaluable guidance, resources, and opportunities for collaboration. Consider the following:

• Local Farming Communities : Connect with other farmers in your area through local agricultural organizations, cooperatives, or extension services. Share knowledge, resources, and best practices.
• Mentorship Programs : Seek out experienced livestock farmers who can serve as mentors and provide guidance, advice, and hands-on training.
• Educational Resources : Utilize resources from agricultural universities, research institutions, and government agencies to access educational materials, workshops, and training programs.
• Industry Associations : Join relevant livestock farming associations or organizations to stay informed about industry trends, regulations, and networking opportunities.
• Online Communities : Engage with online forums, social media groups, or discussion boards dedicated to livestock farming. Share experiences, ask questions, and learn from others in the industry.

By building a strong support network, you can leverage the collective knowledge and resources of the livestock farming community, which can be invaluable for overcoming challenges and achieving long-term success.

Preparing for Challenges and Contingencies

While livestock farming can be a rewarding endeavor, it is not without its challenges. Preparing for potential obstacles and having contingency plans in place is crucial for mitigating risks and ensuring the resilience of your operation. Some common challenges to anticipate include:

• Disease Outbreaks : Develop biosecurity protocols and have emergency response plans in place to address potential disease outbreaks among your livestock.
• Weather Events and Natural Disasters : Implement measures to protect your livestock, infrastructure, and feed supplies from extreme weather conditions, such as drought, floods, or severe storms.
• Market Fluctuations : Diversify your product offerings and explore alternative markets to mitigate the impact of market fluctuations or changes in consumer demand.
• Labor Shortages : Develop strategies for attracting and retaining skilled labor, and consider implementing automation or labor-saving technologies when feasible.
• Regulatory Changes : Stay informed about potential changes in regulations related to animal welfare, food safety, or environmental standards, and adapt your practices accordingly.

By proactively addressing these challenges and having contingency plans in place, you can increase the resilience and long-term sustainability of your livestock farming business.

Key Metrics and Performance Indicators

To effectively manage and optimize your livestock farming operation, it’s essential to track key performance indicators (KPIs) and metrics. These metrics provide valuable insights into the health and productivity of your livestock, as well as the overall profitability and efficiency of your business. Here are some important metrics to consider:

By regularly monitoring these metrics and tracking performance over time, you can identify areas for improvement, optimize resource allocation, and make data-driven decisions to enhance the overall productivity and profitability of your livestock farming business.

Starting a livestock farming business is a rewarding but challenging endeavor that requires careful planning, dedication, and a commitment to best practices. By following the steps outlined in this comprehensive guide, you can navigate the process of establishing a successful livestock farming operation.

Remember to conduct thorough market research, develop a solid business plan, secure necessary licenses and permits, implement sustainable and ethical practices, and embrace technology and innovation. Building a strong support network and preparing for potential challenges will also contribute to the long-term resilience and success of your livestock farming business.

With hard work, perseverance, and a passion for animal husbandry, you can turn your dream of starting a livestock farm into a thriving and sustainable reality.

Related posts:

How to Start a Cattle Farm

Starting a cattle farming business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful cattle farm.

Importantly, a critical step in starting a cattle farm is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

14 Steps To Start a Cattle Farm :

• Choose the Name for Your Cattle Farm
• Develop Your Cattle Farm Business Plan
• Choose the Legal Structure for Your Cattle Farm
• Secure Startup Funding for Your Cattle Farm (If Needed)
• Secure a Location for Your Business
• Register Your Cattle Farm with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Cattle Farm
• Buy or Lease the Right Cattle Farm Equipment
• Develop Your Cattle Farm Marketing Materials
• Purchase and Setup the Software Needed to Run Your Cattle Farm
• Open for Business

1. Choose the Name for Your Cattle Farm

The first step to starting a cattle farm is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your cattle farm:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your cattle farm.

2. Develop Your Cattle Farm Business Plan

One of the most important steps in starting a cattle farm is to develop your cattle farm business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your cattle farm.
• Company Overview – this section tells the reader about the history of your cattle farm and what type of cattle farm you operate. For example, are you a beef, calf, or a dairy cattle farm?
• Industry Analysis – here you will document key information about the cattle industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your cattle farm? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your cattle farm make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

3. Choose the Legal Structure for Your Cattle Farm

Next you need to choose a legal structure for your cattle farm and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the cattle farm and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a cattle farm together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a cattle farm include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a cattle farm is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your cattle farm, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

Incorporate Your Business at the Guaranteed Lowest Price

We are proud to have partnered with Business Rocket to help you incorporate your business at the lowest price, guaranteed.

Not only does BusinessRocket have a 4.9 out of 5 rating on TrustPilot (with over 1,000 reviews) because of their amazing quality…but they also guarantee the most affordable incorporation packages and the fastest processing time in the industry.

4. Secure Startup Funding for Your Cattle Farm (If Needed)

In developing your cattle farm business plan , you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for a cattle farm to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a cattle farm that they believe has high potential for growth.

5. Secure a Location for Your Business

The best way to find a location for your cattle farm is to consider the climate, soil type, and availability of water. You’ll also want to find a place with enough space to accommodate your herd and infrastructure like fencing and barns.  

6. Register Your Cattle Farm with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your cattle farm’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

Finish Your Business Plan Today!

8. get a business credit card.

You should get a business credit card for your cattle farm to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

A cattle farm requires a number of licenses and permits to legally operate. These include a business license, zoning permit, health certificate for the animals, and a license to operate a slaughterhouse.

10. Get Business Insurance for Your Cattle Farm

The type of insurance you need to operate a cattle farm will vary depending on the location and scope of your operation. 

Some business insurance policies you should consider for your cattle farm include:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance : If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
• Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance : This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs. 

11. Buy or Lease the Right Cattle Farm Equipment

The equipment you will need for raising cattle will depend on the size of your farm, the type of cattle, and the facilities. Some basic equipment you will need includes a cattle prod, feed troughs, water troughs, and fencing to keep your cattle from wandering off the property. 

12. Develop Your Cattle Farm Marketing Materials

Marketing materials will be required to attract and retain customers to your cattle farm.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your cattle farm. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional cattle farm website provides potential customers with information about the products you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your cattle farm.

13. Purchase and Setup the Software Needed to Run Your Cattle Farm

To run a cattle business, you will need software to track the animals and their movements. You will also need software to manage the finances of the farm. This software can help you keep records of sales and expenses, and make projections for the future. Finally, you may want software that can aid in marketing your cattle products.

14. Open for Business

You are now ready to open your cattle farm. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

How to Finish Your Cattle Farm Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your cattle farm business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

How to Start a Cattle Farm FAQs

Is it hard to start a cattle farm.

Raising beef cattle or other cattle farms is not difficult . In fact, there are many government programs and resources available to help you get started. The most important thing is to do some research and develop a plan that fits your goals and the needs of your cattle.

How can I start a cattle farm with no experience?

There are a few ways that you can start a cattle farm business with no experience. One way is to look for a mentor who can help you get started. Another way is to read books or articles about cattle farming, and apply what you've learned. Finally, you can watch videos or attend workshops about cattle farming.

What type of cattle farm is most profitable?

A successful cattle farmer that is the most profitable is one that specializes in beef cattle. To be profitable, this type of cattle farm needs to produce a high quality product that can be sold at a premium price. Additionally, this type of cattle farm is able to take advantage of economies of scale, which allows them to produce a larger quantity of beef cattle and dairy cattle while still maintaining a low cost per unit.

How much does it cost to start a cattle farm?

The cost of starting a cattle ranch varies depending on the size and scale of the operation. Generally, startup costs will range from $10,000 to $50,000. Some of the major expenses include land or pasture fees, livestock purchases, fencing, and feed.

What are the ongoing expenses for a cattle farm?

There are a few ongoing expenses necessary for a cattle ranch. One of the main expenses is feed for the cows. This can be in the form of hay, silage, or grains. Another expense is veterinary care. Cows need to be vaccinated against various diseases, and may need to be treated for parasites or other health issues as well. Other ongoing expenses can include fencing, water, and electricity.

How does a cattle farm make money?

Cattle ranchers can make money in a few different ways. One way is by selling the cattle to meat processors. Another way is by renting out the cows to other farmers for milk production. Finally, some cattle farmers sell their bulls to other farmers for breeding purposes.

Is owning a cattle farm profitable?

Yes, owning a cattle farming business can be profitable because the demand for beef is high, and people are willing to pay a good price for it. Additionally, cows can be raised to slaughter weight relatively quickly, so the farmer can bring in a good profit fairly soon after starting the operation. Finally, dairy cows are able to graze on pasture land, which is relatively cheap and easy to come by. This means that the farmer can keep costs low while still bringing in a good profit.

Why do cattle farms fail?

Cattle farm businesses can fail for a variety of reasons, such as a lack of planning, poor management, inadequate capitalization, or unrealistic expectations. Other common causes of failure include the high cost of feed and fuel, drought, disease, and pests.

Other Helpful Business Plan Articles & Templates

Manfredxy/iStock/Getty Images Plus via Getty Images

How to Start a Farm from Scratch

Embarking on a Rewarding Journey - Starting a Farm from Scratch

by Ray Douglas

August 29, 2023

Undertaking the venture of starting a farm from scratch might seem overwhelming, but the rewards are immense.  FCC recently provided some excellent advice.  If you're contemplating this path, there are several steps you can take to enhance your chances of success.

1. Craft a Solid Business Plan: A well-structured business plan is your roadmap to success. It helps define your objectives, formulate strategies, and make informed decisions. Your plan should cover your target market, products/services, marketing strategy, and financial forecasts.

2. Research Your Local Market: Understanding your local market is crucial. Research demand for your offerings and analyze your competition. Engage potential customers, attend trade events, and conduct online research to gain insights.

3. Embrace Community Involvement: Getting involved in your community establishes vital connections. Volunteer, participate in local events, and support community initiatives. Building relationships with potential customers and partners can significantly benefit your farm.

4. Network with Fellow Farmers: Networking with experienced farmers provides valuable insights and support. Attend industry gatherings, participate in online forums, and read relevant publications to tap into the collective knowledge of the farming community.

5. Cultivate Patience and Perseverance: Starting a farm requires dedication and time. Don't be disheartened by slow progress. Stay committed and persistent, knowing that hard work eventually yields results.

Additional Tips for Starting a Farm:

• Obtain Necessary Permits and Licenses: Ensure you have the required legal permissions to operate your farm.
• Invest in Equipment and Supplies: Choose the right tools and resources for your farm's specific needs.
• Build a Skilled Team: Employ qualified individuals who share your vision and passion.
• Manage Finances Diligently: Keep a close watch on your finances to sustain and grow your operations.
• Expect Challenges: Be prepared to handle unforeseen obstacles that may arise along the way.

Lessons from First-Time Farm Operators:

• Have a Clear Plan: Establish realistic expectations and a well-defined plan for your farm's growth.
• Know Your Market: Tailor your offerings to meet your target market's needs and devise effective marketing strategies.
• Community Engagement: Community involvement strengthens your brand and builds a loyal customer base.
• Network with Fellow Farmers: Learning from experienced peers accelerates your learning curve and provides invaluable insights.
• Persistence and Patience: These traits are essential for overcoming challenges and achieving long-term success.

Starting a farm from scratch is an immense undertaking, but with passion, determination, and a solid strategy, you can turn your dream into reality. Remember that every step, every challenge, and every success contributes to your growth as a farmer and as a business owner.

• Small Business
• How to Start a Business

How to Start a Business: A Comprehensive Guide and Essential Steps

Building an effective business launch plan

• Search Search Please fill out this field.

Conducting Market Research

Crafting a business plan, reviewing funding options, understanding legal requirements, implementing marketing strategies, the bottom line.

• How to Start a Business: A Comprehensive Guide and Essential Steps CURRENT ARTICLE
• How to Do Market Research, Types, and Example
• Marketing Strategy: What It Is, How It Works, How To Create One
• Marketing in Business: Strategies and Types Explained
• What Is a Marketing Plan? Types and How to Write One
• Business Development: Definition, Strategies, Steps & Skills
• Business Plan: What It Is, What's Included, and How to Write One
• Small Business Development Center (SBDC): Meaning, Types, Impact
• How to Write a Business Plan for a Loan
• Business Startup Costs: It’s in the Details
• Startup Capital Definition, Types, and Risks
• Bootstrapping Definition, Strategies, and Pros/Cons
• Crowdfunding: What It Is, How It Works, and Popular Websites
• Starting a Business with No Money: How to Begin
• A Comprehensive Guide to Establishing Business Credit
• Equity Financing: What It Is, How It Works, Pros and Cons
• Best Startup Business Loans
• Sole Proprietorship: What It Is, Pros & Cons, and Differences From an LLC
• Partnership: Definition, How It Works, Taxation, and Types
• What is an LLC? Limited Liability Company Structure and Benefits Defined
• Corporation: What It Is and How to Form One
• Starting a Small Business: Your Complete How-to Guide
• Starting an Online Business: A Step-by-Step Guide
• How to Start Your Own Bookkeeping Business: Essential Tips
• How to Start a Successful Dropshipping Business: A Comprehensive Guide

Starting a business in the United States involves a number of different steps spanning legal considerations, market research, creating a business plan, securing funding, and developing a marketing strategy. It also requires decisions about a business’ location, structure, name, taxation, and registration. Here are the key steps involved in starting a business, as well as important aspects of the process for entrepreneurs to consider.

Key Takeaways

• Entrepreneurs should start by conducting market research to understand their industry space, competition, and target customers.
• The next step is to write a comprehensive business plan, outlining the company’s structure, vision, and strategy.
• Securing funding in the form of grants, loans, venture capital, and/or crowdfunded money is crucial if you’re not self-funding.
• When choosing a venue, be aware of local regulations and requirements.
• Design your business structure with an eye to legal aspects, such as taxation and registration.
• Make a strategic marketing plan that addresses the specifics of the business, industry, and target market.

Before starting a business, entrepreneurs should conduct market research to determine their target audience, competition, and market trends. The U.S. Small Business Administration (SBA) breaks down common market considerations as follows:

• Demand : Is there a need for this product or service?
• Market size : How many people might be interested?
• Economic indicators : What are the income, employment rate, and spending habits of potential customers?
• Location : Are the target market and business well situated for each other?
• Competition : What is the market saturation ? Who and how many are you going up against?
• Pricing : What might a customer be willing to pay?

Market research should also include an analysis of market opportunities, barriers to market entry, and industry trends, as well as the competition’s strengths, weaknesses, and market share .

There are various methods for conducting market research, and these will vary depending on the nature of the industry and potential business. Data can come from a variety of places, including statistical agencies, economic and financial institutions, and industry sources, as well as direct consumer research through focus groups, interviews, surveys, and questionnaires.

A comprehensive business plan is like a blueprint. It lays the foundation for business development and affects decision-making, day-to-day operations, and growth. Potential investors or partners may want to review and assess it in advance of agreeing to work together. Financial institutions often request business plans as part of an application for a loan or other forms of capital. 

Business plans will differ according to the needs and nature of the company and should only include what makes sense for the business in question. As such, they can vary in length and structure. They can generally be divided into two formats: traditional and lean start-up. The latter is less common and more useful for simple businesses or those that expect to rework their traditional business plan frequently. It provides a vivid snapshot of the company through a small number of elements.

The process of funding a business depends on its needs and the vision and financial situation of its owner.  The first step is to calculate the start-up costs . Identify a list of expenses and put a dollar amount to each of them through research and requesting quotes. The SBA has a start-up costs calculator for small businesses that includes common types of business expenses.  

The next step is to determine how to get the money. Common methods include:

• Self-funding , also known as “ bootstrapping ”
• Finding investors willing to contribute to your venture capital
• Raising money online by crowdfunding
• Securing a business loan from a bank, an online lender, or a credit union
• Winning a business grant from a donor, usually a government, foundation, charity, or corporation

Different methods suit different businesses, and it’s important to consider the obligations associated with any avenue of funding. For example, investors generally want a degree of control for their money, while self-funding puts business owners fully in charge. Of course, investors also mitigate risk; self-funding does not.

Availability is another consideration. Loans are easier to get than grants, which don’t have to be paid back. Additionally, the federal government doesn’t provide grants for the purposes of starting or growing a business, although private organizations may. However, the SBA does guarantee several categories of loans , accessing capital that may not be available through traditional lenders. No matter the funding method(s), it’s essential to detail how the money will be used and lay out a future financial plan for the business, including sales projections and loan repayments . 

Businesses operating in the U.S. are legally subject to regulations at the local, county, state, and federal level involving taxation, business IDs, registrations, and permits.

Choosing a Business Location

Where a business operates will dictate such things as taxes, zoning laws (for brick-and-mortar locations), licenses, and permits. Other considerations when choosing a location might include:

• Human factors : These include target audience and the preferences of business owners and partners regarding convenience, knowledge of the area, and commuting distance.
• Regulations : Government at every level will assert its authority.
• Regionally specific expenses : Examples are average salaries (including required minimum wages), property or rental prices, insurance rates, utilities, and government fees and licensing.
• The tax and financial environment : Tax types include income, sales, corporate, and property, as well as tax credits; available investment incentives and loan programs may also be geographically determined.

Picking a Business Structure

The structure of a business should reflect the desired number of owners, liability characteristics, and tax status. Because these have legal and tax compliance implications , it’s important to understand them fully. If necessary, consult a business counselor, a lawyer, and/or an accountant.

Common business structures include:

• Sole proprietorship : A sole proprietorship is an unincorporated business that has just one owner, who pays personal income tax on its profits.
• Partnership : Partnership options include a limited partnership (LP) and a limited liability partnership (LLP) .
• Limited liability company (LLC) : An LLC protects its owners from personal responsibility for the company’s debts and liabilities.
• Corporation : The different types of corporations include C corp , S corp , B corp , closed corporation , and nonprofit .

Getting a Tax ID Number

A tax ID number is the equivalent of a Social Security number for a business. Whether or not a state and/or federal tax ID number is required will depend on the nature of the business and the location in which it’s registered.

A federal tax ID, also known as an employer identification number (EIN) , is required if a business:

• Operates as a corporation or partnership
• Pays federal taxes
• Has employees
• Files employment, excise, alcohol, tobacco, or firearms tax returns
• Has a Keogh plan
• Withholds taxes on non-wage income to nonresident aliens
• Is involved with certain types of organizations, including trusts, estates, real estate mortgage investment conduits, nonprofits, farmers’ cooperatives, and plan administrators

An EIN can also be useful if you want to open a business bank account, offer an employer-sponsored retirement plan, or apply for federal business licenses and permits. You can get one online from the Internal Revenue Service (IRS) . State websites will do the same for a state tax ID.

Registering a Business

How you register a business will depend on its location, nature, size, and business structure.  For example, a small business may not require any steps beyond registering its business name with local and state governments, and business owners whose business name is their own legal name might not need to register at all.

That said, registration can provide personal liability protection, tax-exempt status, and trademark protection, so it can be beneficial even if it’s not strictly required. Overall registration requirements, costs, and documentation will vary depending on the governing jurisdictions and business structure.  

Most LLCs, corporations, partnerships, and nonprofits are required to register at the state level and will need a registered agent to file on their behalf. Determining which state to register with can depend on factors such as:

• Whether the business has a physical presence in the state
• If the business often conducts in-person client meetings in the state
• If a large portion of business revenue comes from the state
• Whether the business has employees working in the state

If a business operates in more than one state, it may need to file for foreign qualification in other states in which it conducts business. In this case the business would register in the state in which it was formed (this would be considered the domestic state) and file for foreign qualification in any additional states.

Obtaining Permits

Filing for the applicable government licenses and permits will depend on the industry and nature of the business and might include submitting an application to a federal agency, state, county, and/or city. The SBA lists federally regulated business activities alongside the corresponding license-issuing agency, while state, county, and city regulations can be found on the official government websites for each region.

Every business should have a marketing plan that outlines an overall strategy and the day-to-day tactics used to execute it. A successful marketing plan will lay out tactics for how to connect with customers and convince them to buy what the company is selling. 

Marketing plans will vary according to the specifics of the industry, target market, and business, but they should aim to include descriptions of and strategies for the following:

• A target customer : Including market size, demographics, traits, and relevant trends
• Value propositions or business differentiators : An overview of the company’s competitive advantage with regard to employees, certifications, and offerings
• A sales and marketing plan : Including methods, channels, and a customer’s journey through interacting with the business
• Goals : Should cover different aspects of the marketing and sales strategy, such as social media follower growth, public relations opportunities, and sales targets
• An execution plan : Should detail tactics and break down higher-level goals into specific actions
• A budget : Detailing how much different marketing projects and activities will cost

How Much Does It Cost to Start a Business?

Business start-up costs will vary depending on the industry, business activity, and product or service offered. Home-based online businesses will usually cost less than those that require an office setting to meet with customers. The estimated cost can be calculated by first identifying a list of expenses and then researching and requesting quotes for each one. Use the SBA’s start-up costs calculator for common types of expenses associated with starting a small business.

What Should I Do Before Starting a Business?

Entrepreneurs seeking to start their own business should fully research and understand all the legal and funding considerations involved, conduct market research, and create marketing and business plans. They will also need to secure any necessary permits, licenses, funding, and business bank accounts.

What Types of Funding Are Available to Start a Business?

Start-up capital can come in the form of loans, grants, crowdfunding, venture capital, or self-funding. Note that the federal government does not provide grant funding for the purposes of starting a business, although some private sources do.

Do You Need to Write a Business Plan?

Business plans are comprehensive documents that lay out the most important information about a business. They reference its growth, development, and decision-making processes, and financial institutions and potential investors and partners generally request to review them in advance of agreeing to provide funding or to collaborate.

Starting a business is no easy feat, but research and preparation can help smooth the way. Having a firm understanding of your target market, competition, industry, goals, company structure, funding requirements, legal regulations, and marketing strategy, as well as conducting research and consulting experts where necessary, are all things that entrepreneurs can do to set themselves up for success.

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

U.S. Small Business Administration. “ Write Your Business Plan .”

U.S. Small Business Administration. " Calculate Your Startup Costs ."

U.S. Small Business Administration. “ Fund Your Business .”

U.S. Small Business Administration. “ Grants .”

U.S. Small Business Administration. “ Loans .”

U.S. Small Business Administration. “ Pick Your Business Location .”

U.S. Small Business Administration. “ Choose a Business Structure .”

Internal Revenue Service. “ Do You Need an EIN? ”

U.S. Small Business Administration. “ Get Federal and State Tax ID Numbers .”

U.S. Small Business Administration. “ Register Your Business .”

U.S. Small Business Administration. “ Apply for Licenses and Permits .”

U.S. Small Business Administration. “ Marketing and Sales .”

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

Money blog: 'Stealth tax' on Britons' incomes to stay until 2028

A squeeze on people's incomes due to frozen tax thresholds will continue until 2028, with the Tories and Labour confirming they wouldn't end the "stealth tax". Read this and the rest of today's consumer and personal finance news below, and leave your thoughts in the comments box.

Thursday 30 May 2024 23:11, UK

• 'Stealth tax' on incomes to remain until 2028, Hunt says
• Energy prices 'will be high for a decade'
• Think twice before buying clothes from Zara before your holiday
• Scotland to introduce tourist taxes

Essential reads

• Savings account that could bag you a free £8,500 in five years  
• Chef at UK's best gastropub shares favourite cheap pasta recipe
• Women in Business : 'A truck unloaded a £600 car that her son bought on eBay thinking it was a toy' - the schoolgate stories that led to GoHenry
• Money Problem : 'My mortgage lender is ending my two-year fix and I haven't been in the house for two years - can they do this?'
• Best of the Money blog - an archive

Ask a question or make a comment

Energy prices are expected to rise again in the autumn and last week's announcement of a cut in the cap from July should not be taken as a "sign of stability", the head of the Energy Saving Trust has said.

"Confirmation that energy prices are coming down for the next quarter is very welcome," Mike Thornton said.

"However, no one should take this lower price cap as a sign of stability."

He added: "Forecasts show that energy prices are set to rise again this autumn and will be staying high overall for the next decade."

He urged the next UK government - to be decided in the general election on 4 July - to focus on policies that "support people to use less energy and install cost-effective energy efficiency improvements in their homes".

The cap will fall to £1,568 a year from 1 July - a drop of £122 from the previous quarter. 

McDonald's customers have taken to social media to complain about a "naughty" detail in one of its new deals. 

The fast food giant started a new mix and match deal this week - which allows shoppers to pick up three items for just £3 in store.

However, those ordering online have found the price increase to £4 for the same deal. 

Writing in the Extreme Couponing and Bargains UK group, one user shared a screenshot of her My McDoanld's app, writing: "It's gone from 3 for £3 to 3 for £4. Which is odd, or is that cause it's on the app."

Another branded the price difference "naughty". 

McDonald’s has since confirmed that this price is correct on app.

The increase is due to delivery fees charged by couriers like Uber Eats, Deliveroo and Just Eat - and is fairly standard across the industry. 

Sony Music is reportedly in talks to purchase the entirety of rock band Queen's music catalogue in a deal mooted to be worth some $1bn (around £800m). 

Bloomberg reports  the company has partnered with another anonymous investor to engage Brian May, Roger Taylor, John Deacon and the estate of Freddie Mercury over a sale that would be the largest of its kind.

Queen Productions Ltd, of which the bandmates and Mercury's estate are equal shareholders, recorded revenues of $52m in the year that ended in September 2022. 

This comes after the catalogue of Bruce Springsteen was acquired by Sony in 2021, while rival Warner Music bought David Bowie's songbook for around $250m in 2022, as industry giants battle to invest in songwriting catalogues. 

They are seen by many as attractive investments as the music can be used in future films, advertisements and on the radio - which all produce royalties for the rights owners. 

A squeeze on people's incomes due to frozen tax thresholds will continue until 2028 under Tory plans, Jeremy Hunt has confirmed.

Rishi Sunak introduced a freeze on tax-free personal allowance thresholds (the amount you can earn before you start paying tax) when he was chancellor back in 2021. In his autumn 2022 budget, Mr Hunt extended the time it would need to be in place from 2026 to 2028.

The frozen rates mean many have failed to feel the benefit of a the national insurance cut which kicked in this year.

The Office for Budget Responsibility also estimates the static rates will drag an additional four million people into paying tax by 2028 and push three million into a higher tax bracket. This is because wages will go up alongside inflation but the threshold won't. 

The policy is often referred to as a "stealth tax".

Mr Hunt told BBC Radio 4's Today programme today: "The tax rises that happened as a result of the pandemic and the energy shock, these two giant shocks, will stay for their allotted time period."

But he reiterated the Conservatives' pledge to end the freeze after 2028, saying: "I can absolutely undertake that the threshold freeze that we introduced until 2028 will not continue after that."

The Tories have said they will unfreeze the thresholds for pensioners if they win the election.

Labour has also refused to commit to unfreezing overall tax thresholds.

Sir Keir Starmer said earlier that he believed the tax burden on working people was "too high" but that his party was not going to "make commitments that we cannot afford".

"Therefore I'm very clear about the tax that will remain and will be locked and where we cannot make those commitments," he said.

What are the tax thresholds and what do they mean?

The personal tax allowance is frozen at £12,570. You don't pay income tax on anything you earn below that - anything above is taxed at the 20% base rate. At the same time, the higher rate has been frozen at £50,271 - anything above that is taxed at 40%.

Tom Selby, director of public policy at AJ Bell, said the personal allowance, if it had been inflation-linked since 2021-22, would be forecast to rise to £15,989 by 2028 - nearly £3,500 higher than the frozen threshold.

Tourists headed to Scotland for holidays will face a tourist tax for hotels, bed and breakfasts and holiday lets.

The Scottish Parliament passed the Visitor Levy (Scotland) Bill two days ago, meaning local authorities can set a charge for overnight accommodation.

According to the bill, the fee will be a percentage of the cost of a hotel or other room.

For instance, a 1% levy on a £200 booking means a visitor would pay £2 in tourist tax.

However, any charges or levies will not come into effect until spring 2026, as councils will first have to consult local businesses before carrying out an 18-month implementation period.

Those receiving disability benefits will not pay any charges, with children and young people also exempt.

Ministers will also have the power to set a cap on the number of nights where a levy would apply.

It will also be up to councils if they want to put a charge in place - but with Holyrood research suggesting 17 of Scotland's 32 councils backing the plans, it is likely some visitors will be hit by charges.

Scotland's employment and investment minister Tom Arthur said on Tuesday the charge would be a " force for good", suggesting it "has the potential to be an important tool enabling investment in the local economy, and supporting an important industry".

However, Scottish Conservatives argued there needed to be a more "robust" exemption scheme, with housing spokesman Miles Briggs saying: "Scots will be pretty unhappy when they realise that they will have to pay a 10% tax to stay in a hotel when their house is flooded."

The new law means Scotland joins Manchester, Bournemouth, Christchurch and Poole in charging tourists to stay the night.

Manchester's £1-a-night City Visitor Charge was introduced last April, and is estimated to have raised around £2.8m in its first year.

European hotspots like Barcelona and Venice have also introduced tourist taxes, with the Spanish city charging visitors €3.25 if they're staying in official accommodation.

Workers posing as Disney favourites such as Mickey Mouse, Minnie Mouse and Snow White in California have formed a union - Magic United.

There are roughly 1,700 performers and assistants who help to bring popular characters to life at Disneyland near Los Angeles.

Disney has faced allegations of not paying them a living wage, despite many facing exorbitant housing costs and commuting long distances.

Parade performers and character actors earn a base pay of $24.15 (£19) an hour, up from $20 (£15.75) before January.

Read on here... 

Nike is celebrating a partial victory over rival brand Adidas in court, as it has been permitted to put three stripes on some of its clothing designs in Germany.

The decision came during a second appeal hearing between the two sportswear brands at a regional court in Dusseldorf.

The court previously barred Nike from using two or three stripes on five trouser designs due to a lawsuit filed by Adidas in 2022, which is on a mission to protect its trademark three-stripe design.

Following the appeal, Nike can now use the stripes on four disputed trouser designs, while a ban for one is still in place.

Adidas has filed dozens of lawsuits and signed hundreds of settlement agreements related to its three-tripe design since 2008.

The Conservatives and Labour have ruled out VAT hikes if either party wins the election.

Jeremy Hunt, the chancellor, said tax rises on products and services would "hammer families' finances", while shadow chancellor Rachel Reeves said Labour did not plan to raise tax, national insurance or VAT.

The pledges come after the Institute for Fiscal Studies said the next UK government would face the toughest fiscal inheritance in 70 years.

Ms Reeves said: "I want taxes on working people to be lower, not higher."

New tax rises were restricted to those policies already announced, such as a plan to charge 20% VAT on private school fees, she said.

Writing in The Telegraph, Mr Hunt said: "We won't increase the main rate of VAT for the duration of the next Parliament."

He continued: "A VAT increase will hammer families' finances and push inflation back up."

He urged Labour leader Sir Keir Starmer to make a similar commitment "on camera".

Follow all the latest election campaign news live in the Politics Hub ...

People who bank with TSB have had trouble getting into the mobile app this morning.

Many took to social media to report difficulty logging in to their accounts.

The official X account of TSB, responding to several complaints about the app being down earlier, said: "We're aware that customers are experiencing issues with our digital services. We're sorry for any inconvenience and are working hard to resolve it."

One customer reported that the app had remained down overnight:

In an updated statement, the bank said the issue has now been resolved.

"We're sorry for any inconvenience it caused," it said.

By Daniel Binns, business reporter

Shares in Auto Trader have rocketed more than 13% to a record high this morning.

It comes after the company reported a bumper set of results for the 2023/24 financial year - including a 26% rise in group operating profits.

The online car marketplace says recent demand has been strong - and it expects its performance to continue.

Dr Martens is also up on the FTSE 250 index - despite revealing it suffered an almost 43% fall in pre-tax profits during the 12 months to March (read more below...)

Its shares climbed more than 9% at one point earlier this morning, but have since eased back to almost 6%.

The British footwear brand has said it is "confident" it can revive its fortunes and says it plans to make savings of up to £25m to turn things around.

Elsewhere, the FTSE 100 is pretty flat - it opened 0.2% down but is currently up by a tiny 0.03%.

Mining firm Anglo American is among the companies hit by falls this morning.

Its shares have dropped by just over 1% after its rival BHP Group walked away from a proposed £38.5bn takeover of the company.

On the currency markets, £1 buys $1.27 US or €1.17 (or €1.1753, to be precise).

It comes after the pound reached a 19-month high against the Euro at one point yesterday - with £1 equalling €1.1784 - before later dropping back down.

The cost of a barrel of benchmark Brent crude has dipped slightly compared to yesterday. The price is $83 (£65).

Be the first to get Breaking News

Install the Sky News app for free