For beginning small farmers, choosing which markets to approach can be a daunting task. If you’re having difficulty knowing whether or not one of your market options is worth your efforts, check out this quick tip from Dr. Nate.
Don’t know what your options are? The main markets for Upstart Farmers are CSA groups, farmer’s markets, grocery stores, and restaurants. You can get guides to each of these markets on our shop.
There are three steps to determining whether a market is worth getting into:
1) Quantify Everything
The first thing you need to do is quantify. Quantify everything. Figure out how many people are in that market, the average purchase size for a customer, and how many of those purchases you can supply.
This information makes up a lot of the demographic research that you will be doing about that market. (A great source for demographic research is the US Census.)
2) Fit Product to Market
Secondly, decide if that market fits your production. Will that market be able to absorb a significant chunk of your production at a decent margin? If yes, then it’s probably a market worth attacking.
When it comes to specific market information, you’ll need to talk to people experienced with that market (maybe a produce manager, chef, or farmer’s market coordinator). It can also be valuable to canvas the area or survey current customers of that market.
3) Calculate the Value of Your Time
Before you commit, remember not to underestimate the logistical cost of serving that market. Your time is costly. Go through what you will have to do before selling, during sales, and afterwards to wrap everything up? Put a price on your time, because you can’t afford to discount your time forever.
Check out Elesif’s post on calculating farm expenses for some guidelines on how to get a realistic idea of your costs..
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You can learn more about building your business at USU, an online training program dedicated to making your farm a reality.