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Farming homestead business plan...  RSS feed

 
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I became a member just to-day. I was intrigued by this business plan. I've three college degrees including a degree in Civil Engineering and two degrees in science. I do not understand any thing this person is saying. I forgot his name. So I'm sorry I'd not be able to refer to him by name. He starts by saying that he wants to make more than he is making now. So he wants to make $120,000. That is great. I understand that. But how does he come to 12 families of 4. Are all these 68 persons going to have to slave for him to make $120,000. I mean this is how I think about it. I want to make $120,000. I want to do it by buying dairy cows and milking them. All I'd have to decide is how many dairy cows would I need to make $120,000 in year. That is all there is to do to make $120,000. I know one thing. I can't do it by buying only seven cows and I won't need 12 families to do it. I'd have to start with just my family. My case is simple. I live alone. So there is only one person in my family. Not 48 persons in my family. And I know that I won't buy a cow that gives less than 60 pounds of milk a day. Probably I'd have to milk her four times a day to get that kind of milk and I'd have to milk her four times a day. What farmers do not know is that cows hoard a lot of milk. It is not that they do it intentionally. But they end up doing it because of a hormone that they need for the milk to come out of the tissue that composes the inside of the udder of the cow. The hormone releases the milk by causes a reaction like expansion and contraction of the tissue. If the hormone runs out the reaction stops and the milk gets soaked back in to the tissue. You can get more of the hormone by stimulating the udder a little after previous milking. Any way I could milk the cow four times a day and reduce the hoarding. Ideally I'd like cow that produces 100 pounds of milk daily. For the uninitiated there are 9 pounds in a gallon of milk. To buy a cow that yields 100 pounds of milk daily I'd have to spend twice as much as I would have to pay for buying a cow that gives only 60 pounds of milk daily. I believe I could make a profit of $1 per cow per day. To make a profit of $120,000 per year I'd have to make $300 worth of profit every day. So I'd need about 300 cows. I'd need a capital of about $600,000 for buying the cows alone. I do not think I'd need the acreage that our friend mentions. But I'd still need atleast 50 acres of farm land. I'd need to build a barn that I could do cheaply. Just a barn with a roof to shelter the cows from rain to keep them dry. But you still need a lot of columns to support a roof for such a barn. I'd need a milking parlor and a holding area where the cows wait to get milked. I'd need milking equipment. To cut the long story short I'd need $1,000,000 to produce a profit of $130,000 on it. It is only 8% pf the capital needed. I do not think I'd be able to get any body to invest in my venture. If I could show that my venture would make a profit of 30% over a year I might be able tget some body to invest in my venture because 30% is a good return on the money. There are a lot of greedy people in the world. I know I could find a greedy person who knows that I'd be able to make only 8% of profit. The 8% is just a guess. I might actually make a loss of 20% although I think I'd make a profit of 8%. I mean there are a lot of risk factors that would make it foolish for any body to go in to milk farming knowing that the business could make 8%. If I'd my own capital which I do not I could still go in to the business because of the subsidy that uncle sam gives to the farmers. This is my business plan. I do not need to have 12 families of four to produce $120,000. All I need is one million dollars of hard cash. This is my business plan. If some body wants to risk his million dollars I'd work for him. All he needs to give ma is a salary of $2,000 per month.



 
Posts: 92
Location: Deland, FL
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I believe he was talking about feeding 12 families all of their food at a premium price, not employing 12 families. As far as what you mentioned I would advise a lot of caution. It's one thing to read something in a book and crunch numbers, and another to actually do it.

Pushing cows to produce 100 lbs of milk per day is a risky business in my opinion. You also have to take into account that the milking production of a cow changes over the course of the season, the course of it's life, and depends heavily on feed. I can't imagine that a cow producing 100lbs of milk can maintain that level for more than two years...and honestly strikes me as unethical. I won't push that point, it's just my opinion.

If you have a forage-based feed system, you can definitely profit more than $1 per day/cow. Some other considerations is that you have to dry cows out for part of the season to prepare for pregnancy. Also, if you do not have forage space, you're going to be buying increasingly expensive feed/hay. Also, you may have lots of vet bills considering how hard you plan to push these animals. Of course, this all would probably fit into your numbers if you're only planning on making a dollar a day. I would just want you to consider other styles of dairy that may be better for the land, animals and provide a more peaceful lifestyle.

I know someone with a few cows that has a waiting list for her milk at $10/gal. It's local and grassfed, which provides a premium. I know that not everyone can afford those prices and there is room for larger scale production that lowers the prices, but I would encourage you to look at the middle ground.

I hope to add a dairy cow to the homestead one day soon. I'm just waiting on the pasture to improve, the sheep are doing a good job! It's visibly better in the course of just one year. Good luck with your ideas and I hope this wasn't too negative...it's just my opinion, and i'm not a dairy farmer.
 
Posts: 184
Location: Mineola, Texas
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Satish Bhardwaj wrote:I became a member just to-day. I was intrigued by this business plan. I've three college degrees including a degree in Civil Engineering and two degrees in science. I do not understand any thing this person is saying.



Satish, This is, I think, a time when something is lost in the translation. I think you misunderstand 80% of what I said. Yes, I would like to make $120,000 a year doing a permaculture system of agriculture. It is sufficient to have a good standard of living here in the US.(It is still less than what my family income is currently)

It would help if you understood what Permaculture is first before you try to figure out what I am wanting to do. It will make more sense then perhaps.

I would not have 12 families working for me, I was merely pointing out that a family that eats a premium beyond organic diet (in my city anyway) spends about $10,000 a year on food. So, to gross $120,000 I need only feed twelve families.

You don't mention where you live, so I suspect that prices might be very different. It would not be uncommon to obtain $3/lb for vegetables here, or $6/lb for beef, $8/gallon of milk, $4 per dozen eggs if they are at the highest quality.

So I do not think that your idea that one might need to invest $1,000,000 to provide $120,000 gross income is anywhere near the mark. I would consider that a lousy investment.

I would listen to Paul Wheaton's Permaculture podcast, starting with the very early episodes, so that you can learn what is going on.

Have a great day.

 
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Can you make $120k a year from a permaculture farm? Ya, I think you could. I think most people who ponder that question think the whole idea is a little counterproductive to the sustainability moevement though. If you want to use that $120k a year to maintain a "good standard of living" for yourself and your family, then you really are just depleting the land for personal gain. On the other hand, if you can succeed with your goal, but only spend $15k for your personal living expenses, and invest the other $105k on promoting advances in permaculture, that might be ok. Maybe you could invest the money in permaculture farm franchises, a permaculture design company/school or massive land conservation and improvement projects. I think that it is important for a family to reduce its needs so that they can give back more to the community.

I think certain things like money, consumerism and marketing can be viewed with contempt by many permaculturists because they are tools the system use to keep people dependent and "enjoying" dependency on the system. I think a lot of people have a certain amount of contempt for the way the world is going, and those people want to get away from that system and live independently or be involved in ecovillages of like minded people. An ecovillage that is a fully self supporting closed loop system is really the ideal permaculture situation for many people because some people don't want to have anything to do with a society that wont live up to a certain standard at this point in time. On the other hand there are people who really really want to make big changes to the world, those with a desire to be pioneers and influential entities in the world of agriculture.

I think that there are at least a couple of options if you want to popularize permaculture practices. My first idea would be to do really cool things with permaculture and upload videos to youtube/facebook. For example you could feed lots and lots of people by starting a non-profit group to feed the homeless, or you could design a system to improve soil conditions in a desert using only rainfall catchment systems. If you want to go with this first method, you can DIY almost everything and use recycled materials where you want. You might find out it is a lot easier to feed an unthinkable amount of people with permaculture than to make a $120k a year from feeding people using permaculture. practices.

The other way to progress the movement towards a more sustainable future is to use those same tools the system uses, but for good. Making a lot of money isn't bad if you spend the money to improve things for current and future generations. A no holds barred full on PR department and marketing plan to identify and exploit the needs of your consumer in order to influence them to feed into your production chain as faithful, recurring consumers is actually ethical if you are influencing them to be supporters of sustainable practices and healthy food. I think one of the important points that a lot of people are making is that our economy is geared towards monoculture, so it is naturally difficult for someone to make the kind of money you are talking about with a permaculture farm. That is why you want to work as efficiently as possible, and do the most with what you have, which brings us to marketing. Marketing is the BS science of making dumb people pay way too much money for crap they don't need. So if you can use this science to create a perceived added value to your products, you can create a niche in the market for yourself that can be very profitable. Indeed it would be wonderful if we could show off our perfect ecosystem of food forests and diverse permaculture gardens as something profitable and available for everybody using the current consumer model. But a garden with highly varied products and a plethora of specialty and rare items is going to be a lot of work for one person to manage, too much for one person too manage if it involves all the PR, marketing and business time needed to get product to consumer. Because you are spending so much time running the business and marketing your permaculture complex, you will have less time for exploration, invention, intensive breeding and learning more about permaculture practices. Because you are running a business model as opposed to a model for personal sustainability, you will take less risks and go with the safe and profitable ventures. Your permaculture paradise will never compare to those with the ability to take those risks and support that diversity. Without dedicating massive management to lots of separate departments, and paying lots of professionals and specialists to handle all of the many aspects of permaculture, you will not be able to present the public with truly diverse and high quality products.

Most people are not in the financial position to embark on the creation of a high-quality, diverse permaculture company. I think the next best thing is to create a beautiful permaculture farm, sell a little bit of everything as you suggest, and make all of your profit on a few key items. Even though this idea is just a few monocultures mashed together with a side of permaculture, it can use the monetary gain to advance the sustainability movement. Have a nice beautiful permaculture complex people can visit, take hay ride tours, and see how one can live with nature instead of against it. Everyone who goes there will want to start their own permaculture designs, and they will be buying some of your premium products along with fresh produce at the gift shop. All of your effort and investment should go to the profitable pieces of the picture. The pieces of permaculture that aren't as profitable require only a basic working knowledge and will only be a small portion of your plan, used mainly for looks. The key items that generate a high profit margin for you are going to be something like the $4,000 ham. You are not competing with other people's products, your key items are special, they can't be compared to what someone else is selling. If you can get people to believe that, you can set the price yourself. Just like the $20 soap. Someone thinks that soap works so good because it costs $20. Sometimes people like buying expensive things because they are expensive.

So what key items might lend themselves to marketing and adding perceived value? I grew up around Prescott, Arizona and there was a place called Young's Family Farm. They had a big pumpkin patch and you could go there to get fresh produce and they sold a lot of turkeys around thanksgiving. Now you can get a pretty good deal on turkey if you want to go to wal-mart or any supermarket, but lots of people paid extra money to buy the turkeys from the farm instead because they knew the farm was a good place and the meat always tasted better. Now you might not get lots of daily foot traffic from people wanting to buy eggs, vegetables or animals. You may only be limited to selling a certain amount through the local co-op each week, but lots of people will come from far and wide to buy that special thanksgiving turkey. Marketing has already done a lot to emphasize certain products and times of year, so why not work with that? You might not sell to many cords of firewood throughout the year, but come Christmas time people will come from far and wide if they know you have the best Christmas trees in the area. You might get passed up in an arts and crafts fair as just another soap stand unless you also sell companion products like facial masks an assortment of natural beauty products. I would focus on things with a high markup, like the fancy organic turkey or ham. Making soap seems like another highly profitable venture you might get excited about marketing. I have read articles about people making money off of shiitake mushroom cultivation. If you have lots of Asian and sushi restaurants nearby, it would probably be mutually beneficial to sell high quality organic shiitake mushrooms to them. That's the market the mushroom cultivators got into, high-end gourmet restaurants. Also I think raising fish with an aquaponic system would be very efficient as far as time and money needed versus output. I started to get a degree in greenhouse management, and I remember them explaining how if you had a one acre greenhouse operating year-round, growing only roses, you could generate sales of one million dollars a year. So ya, I would sell some roses. And sure maybe people can't eat roses, but it's a plant at least, and it usually makes people feel good so in this case an intensive program of marketing an unnecessary product might actually be OK, if you use that profit for good and unselfish reasons. So I would follow all the marketing professionals and start promoting all your seasonal product a good 3-4 months in advance. Sure roses are good for Valentine's day, but what about mother's day? Father's day? Heck I don't think you're a red-blooded American unless you're wearing your special independence-edition rose on your lapel for the fourth of July. Everybody's just gotta have their own ya know. Using automated computer systems to run a greenhouse might be right up your alley, and save you time for other things. I'm sure you could start a flower delivery business in your area if you have quality product. I've seen prices for flower delivery online and they are outrageous.

So in conclusion, I would spend about 80% of your time on a few key high-profit goods, and 20% on maintaining a diverse product offering and permaculture system. John Q. Public doesn't need to know that all your time is devoted to a handful of money makers. Coming across as a highly diverse and innovative operation is an asset, even though you may be utilizing some of the very same tools that "the system" uses to take advantage of the masses. You may be running the operation on a 80/20 basis, but you want your consumer to think you are Mr. Permaculture 100% through and through. Because hey man, you're not selling turkeys, you're not selling soap or roses. You're selling an ideal, a dream, a way of thinking and a way of living. You're freeing people from the system, and you can use the system against itself to achieve your goal. Just make sure your profits are really going towards something thoughtful and beneficial to society, and not spent on jet-skis, ATVs and unnecessary widgets.
 
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I just tripped over this thread. Just wondering, Rich - How is it going? We are at the start of setting up a permaculture system and hope to eventually generate an income (not our whole income) from the property. Just wondering how far along in your transition process you are?
 
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My daughter and I have tossed the idea of a culinary farm around for a few years.
It would focus on plants and animals for slow food and local production.
But money would come from processing these in a bed and breakfast setup.
Also designing so we can host events like weddings.
People seem to forget that Americans spend alot of money just to enjoy nature.
If you design the landscape correctly is can be practical and highly attractive.
 
R Hasting
Posts: 184
Location: Mineola, Texas
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Linda and everyone else.
Little update.
My senior in High School is going to graduate in June. He wants to be a Software Engineer, so it makes sense for him to go. He really is college material and the good news is that he is one sharp dude and has at least a couple free ride offers from colleges.
Low cost is good. Free is better. I trained my son well, he likes free.

On Wednesday, the day before Thanksgiving, my family and I are going to take a second look at a property about 50 miles from Dallas. It is an old historic house on a 2/3 acre lot. In addition, we are looking at a 90 acre farm a few miles east of the house. The current plan, as it stands today is to make a B&B out of the house, my wife's "business" and I get to build the adjacent 1/3 acre garden and 90 acre farm. We will be close enough to Dallas to get employment there if we need to for a while. I will market in DFW to every gardening, prepper, permaculture, green & eco group in the area to educate on all things permaculture. "And by the way, we have a B&B with a demonstration permaculture garden and a farm, please sign up for our monthly newsletter"... So, it works to everyone's mutual benefit and infects brains one meeting at a time.

We plan on using the Salatin/Shepard fiefdom method to gain scale on the farm and in many of the aspects of the business.

For more on that, take a listen to the Permaculture Voices podcast from last week (Mid Nov 2014) featuring Joel's PV1 keynote talk.

I have spent ten hours a week for the past three and a half years learning and preparing for this transition. Nothing left to learn, a whole lot to experience left to gain.

I got my PDC from The "Prince of Permaculture" Lawton on-line course earlier this year. Good to get, but I already had 90% of that in my head. Still, good to have the certificate.


I'll keep you up-to-date on the situation.
Wish me luck!

Richard
 
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