Starting and managing a farm business in Australia

If you're interested in starting a farm as a supplemental or sole source of income, you will be faced with many more decisions than what type of farmer you'll be. A wise approach to farming is to treat it like a business.

Steps to start a farm business in Australia
Careful planning and research are required to start your dream of owning and operating a farm.

1. Research
Begin by researching the types of agricultural products you could produce. A helpful resource for discovering the major types of farm products is the Department of Agriculture, Water and Environment's (AWE) Snapshot of Australian Agriculture 2022.

2. Budget
Once you have an agricultural product in mind, start researching what costs are associated with that type of farm. Are you going to specialise in lavender or raise livestock and grow a crop? To determine your initial budget, ask yourself:

• What equipment is needed?
• How much land and what type will you need?
• What professional services will you need?
• What personnel costs are involved?

3. Purchase
The next step is buying land. Your farm's product and market will determine the size and location of the farmland required. According to AWE, farming uses 55% of Australia's landmass. You need land with resources including access water, soil type, climate and nearby markets that meet your specific business goals.

You may want to consider buying an existing farm and investing in capital improvements. Search sites like Farmstyle.com with sales listings for small farms or contact the office of the minister of agriculture in the area you desire. Before purchasing, make sure you review the farm's financials:

• Profit and Loss.
• Cash flow.
• Balance sheet.
• Bank statements.
• Tax records.

4. Finance
You'll need to put your finances together. Whether you're buying a farm or building from scratch, start-up capital will be critical to your future success. Lenders will ask to see the same financials mentioned above.

Talk with experienced farmers in your chosen area about the risks. This insight will be helpful when you make budget projections.

5. Learn
Throughout the journey of starting a farm business in Australia, there's a lot to learn. Topics like farm management, developments in horticulture, food systems and compliance for farm businesses. Thankfully, the State of Victoria offers online courses. Should you need professional advice and assistance with managing your farm business, there is help available.

WMC Accounting has a wide array of business services that help small businesses grow and prosper. Contact us today to learn more about how we can help with your farm business financial management.