If you have a large waiting list of customers that want to purchase your product, why not have them sign up, CSA style? They would pay you up front for a years worth of milk (or even two years worth of milk), and you would get the capital to expand your operation.
I have had customers approach me about expanding certain part of my farm operation, and have offered up payment in advance to enable the capital investment that would be necessary. It seems like a business concept that is well understood and accepted. Just a thought, from another small dairy farmer.
Thank you for taking the time to respond. Running a CSA version sounds great. However I cannot seem to figure this out exactly. Especially if I do not have a goat already lined up for them. I can't just go to the store and buy a goat when people are ready. I do know of some milkers coming up for sale after they kid. Do you have an outline I could follow?
Location: 6200' westen slope of colorado, zone 6
posted 5 years ago
Angela Rothweiler wrote:Do you have an outline I could follow?
What I would do is figure out how much a gallon of goat milk would cost a customer for the season. For my dairy, which operates seasonally from April to December, one gallon per week for the season would cost roughly $430.
I would then contact all the people on your waiting list (you have a big waiting list, right?), and let them know that if they pay now for the season, that you would have goat milk for them. Explain that you are expanding your operation to make it possible to serve more customers, so you need to raise capital up front. Offer your customers a discount for paying in advance. For $400, you will provide them with one gallon of goat milk for the season.
With this system, you can raise your capital in advance, use the funds to expand your goat herd and buy your milking machine, and then provide milk to a larger customer base this year. You would get people to send in money now, and you could then coordinate with other farmers to purchase milk goats when the time is right. Good communication is essential, but very doable.
I see how doing a kickstarter essentially gets you free money. You use the donations to build your infrastructure, and then still charge customers for product as the farm season goes. Seems great to me, but maybe a bit unrealistic from a business standpoint.
The CSA model is a little more balanced, where you are asking for payment up front, like a magazine subscription, but people are only paying for what they are actually getting. I plan to do this with my pork operation this year. I want customers to pay in advance, so that I can buy piglets and feed without taking on debt. With a proven customer base that trusts you, this should not be too hard to sell.