Even if you’ve been selling farm-fresh products to your neighbors for years, transitioning to a full-fledged, money-making operation is tough.
After navigating food safety regulations and legally establishing your business, you have to set profitable prices, find new customers, and learn how to run your farm-to-consumer business at scale.
But these challenges are worth it. Seven Sons in Indiana, Polyface Farms in Virginia, and White Oak Pastures in Georgia have used the following strategies to become industry leaders in the farm-to-fork space — and you can, too.
In this blog, we’ll explore six steps to create a farm-to-consumer business plan to help you lay the foundation for your farm store, ensure smooth day-to-day operations, and grow your earnings.
Let’s get started!
What do all successful small businesses have in common? Strong value propositions that highlight the unique ways they meet customers’ needs.
Your farm-to-consumer business is no different. Customers could easily choose to stock up on fresh steaks and ground sausage at the supermarket down the road, which is why you need to give them a specific reason to buy from you instead.
Let’s look at an example of a value proposition:
We offer grass-fed beef and lamb raised on regenerative pastures. We’re transparent about our ranching and processing methods, which means you can feel good about every purchase you make.
This is an effective value proposition because it highlights a specific group (customers who care about where their food comes from and how it’s produced) and how they plan to meet this group’s needs.
Now, let’s talk about how to create your farm’s unique value proposition (UVP).
Not every customer is willing to seek out and pay more for farm-fresh goods, so identifying your target market is crucial.
If you’re already making low-volume sales through word of mouth or at farmers markets, consult with your current customers. Why do they rely on your farm to stock up on steaks and seasonal produce?
Whether your target demographic is health-conscious families, eco-friendly consumers, or people who simply care about their communities, you can use this information to shape your value proposition.
Next, it’s time to size up the competition. Your value proposition should set your farm-to-fork business apart from other food producers in your area.
Differentiating yourself from big-box grocery stores is easy, but things get tough when there’s a zero-waste grocery store or farm-to-fork butcher shop nearby.
In this case, try to offer customers something they can’t find anywhere else — whether that’s curated subscription boxes filled with delicious steaks, tried-and-true recipes featuring seasonal farm products, or convenient pickup and delivery options.
You have a strong concept — now it’s time to establish your farm-to-fork business officially. The first steps include:
Filing this essential business paperwork can take time, so we recommend starting as early as possible to avoid delays.
Since you’re selling perishable goods like meat and produce, you also need to follow federal, state, and local regulations regarding food safety. A few examples of these rules include:
You may also have to get a specific permit to handle and sell products like fresh meat. For example, North Carolina requires you to apply for a Meat and Poultry Handler’s Registration.
A thriving, loyal group of enthusiastic customers is the most important ingredient for farm-to-consumer success — but cultivating this community takes time.
That’s why we recommend marketing your farm-to-consumer business long before you’re ready to make your first sale. Here’s how:
Creating a relationship with customers before you start selling to them is the foundation for success.
Pro tip: Early marketing is especially important if you plan to offer delivery services or start a buying club. Handling delivery logistics is expensive, but a waiting list of excited customers makes these first trips more profitable.
How will customers interact with your farm? Your farm-to-consumer business plan should outline every aspect of the customer experience, from product display to payment processing.
Your farm store shopping experience will vary significantly depending on whether you sell in person, online, or both, so let’s take a closer look at the different business models.
[H3] On-Farm Stores
When it comes to in-person farm sales, first impressions are everything. Your on-farm store should win over customers from the second they drive onto your property, highlighting your unique products and your small business story.
Here are some key factors to get right when designing your farm store:
Perfecting these elements of your in-store farm shopping experience will boost customer satisfaction and drive sales.
Related Read: How To Open a Farm Store: 5 Key Steps
Selling online is a powerful way to expand your reach and grow your sales potential, but you need a well-designed website that offers all the right options.
Here’s what to focus on:
E-commerce can be a game-changer for your farm, as long as you follow these tips and best practices.
Bonus Resource: How To Build a High-Converting Farm Store Website in 7 Simple Steps
Farm-to-consumer success depends on a solid financial plan, especially as you scale your operations.
Too often, farmers focus on bringing in revenue rather than turning a profit, which depends on controlling their operating costs and setting the right prices.
Most likely, you already have an estimate of your farming expenses. You know how much it costs to maintain equipment, hire seasonal farmhands, purchase new livestock, and work with meat processors.
However, it’s easy to overlook the cost of running a direct sales operation. Make sure you’re including these line items in your calculations:
Don’t forget to update your expense tracking as your business grows! Adding more livestock to your herd or expanding your farm store’s hours can result in more sales opportunities — but it also raises your operating costs.
Pricing is one of the challenging parts of creating your farm-to-consumer business plan.
Too often, farmers undercharge for their products, hoping these low prices will appeal to more customers, but this strategy makes it difficult to become profitable later on.
Your early customers won’t want to pay higher prices, and you’ll be left struggling to recoup your business expenses.
Instead, take a data-driven approach to pricing. Calculate exactly how much it costs to produce one pound of beef or sausage, then add your desired profit margin.
Remember: Customers buy from your farm because they support your regenerative farming mission — not because they’re looking for the lowest price.
Related Read: How To Price Your Farm Products: A Quick Guide for Farm Stores
Where do you hope your farm will be in one, five, or 10 years? Your farm-to-consumer business plan should answer this question and explain how you’ll achieve your goals.
Let’s look at a few examples of next steps for your farm:
These are just a few ways to keep customers engaged and excited about buying from your farm.
Congratulations! You’re ready to build your farm-to-consumer business plan and bring it to life.
Starting a direct sales operation can be intimidating, but you don’t have to do it alone.
GrazeCart is an all-in-one website builder, POS solution, and farm management software designed to help you launch, manage, and grow your business. Whether you’re hoping to sell online, in person, or both, we’ve got you covered.
See how GrazeCart fits into your plan by exploring our flexible pricing options.