Every enterprising farmer dreams of scaling their farm and establishing a bigger business. Thinking about a farm expansion signals that you might be ready to take things to the next level. But there’s more to running a larger farm than simply thinking about how to finance the change. So, before enticing thoughts of higher revenues lure you in, here are seven less-obvious questions you should ask yourself before expanding the farm.
1. Do I have neighbors to consider?
Think about whether expanding your farm will impact your neighbors in any way. If the answer is yes, it’s always best to inform them of your intentions as early as possible.
2. Am I ready to hire and train new employees?
A bigger farm may or may not require additional hands, depending on the scale of your expansion. You might think that you can simply hire new people to help you out, but take into consideration the fact that you might need to allocate some time and other resources to train new employees and provide them with all the necessary safety materials.
3. Would I need to install extra security after the farm expansion?
Your farm is home to a bunch of assets and resources. However, note that a bigger farm may be a lot harder to monitor and protect from theft or burglary. Ask yourself, will your current security system still cut it after you expand? If not, start thinking about how you can upgrade it to match the needs of your bigger business.
4. Should I create a new contingency plan?
Would the expansion necessitate updating your current contingency plan? You probably have backup suppliers or other emergency resources should your farm suffer a setback. But will they still be enough to get you covered once your farm—and your needs—get bigger?
5. Have I reviewed my farm’s insurance?
If you’re planning to expand significantly, your farm’s current insurance policy may no longer be enough. This holds even more true if you’re planning to delve into new types of farming.
6. Can I afford to replace all my equipment sooner?
If the expansion you’re eyeing isn’t too massive, chances are you’re planning to keep on using the equipment you already have. This, of course, is completely acceptable especially if your tractor and other equipment are rated for farms that are bigger than what you already have.
However, keep in mind that using them to work on a bigger piece of land will lead you to consume their lifespan faster. A tractor that you estimate can still last for 3 to 5 years might need to be replaced a lot sooner. And when it does, can you afford to do so?
7. Will I get better returns if I focused on improving my current farm instead?
More often than not, improving what’s already there can be more rewarding than tackling a new or bigger venture. Consider whether it’ll be more profitable for you to get better at what you’re doing instead of getting bigger. If so, delay the planned farm expansion until you’ve already optimized your farm as it is.