Seven Questions to ask if you’re ready for Entrepreneurship
Most people dream of running their own business: following their passion, being their own boss and having control of their time. It sounds glorious! The reality of entrepreneurship (and farming) is far less glamourous. In addition to the actual farming you love, you need to market, sell and deliver your product, do bookkeeping, manage seed inventory and harvest schedules, repair and maintain equipment, and so on. And if you don’t do all these things yourself, then you also hire staff, delegate and manage. If you spend 50% of your time actually farming, then consider yourself lucky!
Before investing your life savings or taking a loan you can or cannot afford, ask yourself a few questions to make sure you’re ready for entrepreneurship. Because, let’s face it, when you start your own business, you are no longer a practitioner (farmer), you’re a business owner and entrepreneur.
The overarching question is: Do you believe you have all the skills, energy, money, people and knowledge to start a business? The following questions are not meant to deter you, rather to ensure that you go into this with your eyes wide open to the realities of entrepreneurship.
1. How much experience do you have farming?
Can you make a crop plan? Do you know what types of soil you need for the crops you want to grow? If you don’t, consider getting an apprenticeship.
2. How strong are your business skills?
Can you manage people and money? Do you like working with people and selling?
3. If you don’t have all the skills you need, what resources can you access to round out the business?
Do you need a business partner who understands the business side of the operation while you focus on the farming?
Can you connect with your local agriculture agency? Do you have an accountant to help with bookkeeping and taxes? What other resources can you tap?
4. What’s your suckatation ratio?
As they say, “Everything sucks some of the time.” This couldn’t be more true for farming and entrepreneurship. Can you stand doing things you don’t like for 50% of your day?
5. Are you willing to work as many as 90 hours a week?
Unlike many industries, there’s immediacy to farming. The irrigation needs to be set up today; it can’t wait until tomorrow or your crops will wilt. The cucumbers need to be harvested today, or they will be too big and bitter. The chickens need to be fed today; they can’t wait until the weekend, when you’re catching up on chores.
On top of that, all sorts of unexpected things will not go according to plan. I can’t tell you what they will be, but I can assure you it will happen. All your plans for an organized day, with a balance of work and life, will seem like fantasyland after a few months of running your own businesses.
All of this adds up to many more hours a week of working than you anticipate, especially in the first years of business while you’re getting your systems in place. To be sure, you will not work at this pace 52 weeks a year, but it can be the norm and not the exception.
How hard are you willing to work?
6. Can you afford to not earn money for the first 6 to 12 months of business?
As the owner of a business, you are the last person paid. Your vendors, suppliers and employees need to be paid before you can take a draw. During the lean times, you may not be able to pay yourself at all.
Do you have enough savings? Do you have a spouse who can support you?
To that end, if you’re applying for a loan, the bankers will want to know that you are not putting yourself in financial jeopardy in taking the loan. If you get evicted from your apartment because you’ve fallen behind on rent, then there’s an increased chance that you will fall behind on your loan payments, too.
In general terms, it’s always a good idea to have 6 to 8 months of savings in case you lose a job. The same is true for starting your own business.
Make sure you have enough savings to carry you through the lean times. Chances are you won’t have the time during the growing season for a second job if you’re short on cash.
7. What is your tolerance for risk and uncertainty?
In addition to bolstering your savings to support yourself during the start-up phase, you will likely need to borrow money to start your own farm, whether it’s to purchase land, equipment or a greenhouse. Some people don’t like borrowing money, and that’s okay. It means you need to plan and save more. If you use your own money, are you okay losing everything you put into the businesses? I’m not suggesting that you will, but it’s always a possibility. And as they say, plan for the worst and hope for the best.
If you decide to borrow money, the business planning process will help you figure out what you can afford to borrow and what you need to borrow to launch your business. Often, it can be a loan amount that exceeds anything you’ve borrowed before, and it can feel scary. Are you comfortable borrowing money? And are you willing to put your credit at risk if things don’t work out?
