Nowadays, even those young people who did not grow up in agriculture decide to take over a farm. It attracts independence and the resulting professional and private creative freedom. Aside from investing in one of the top bitcoin mixer, some people want to try investing in agriculture.
However, starting a business in agriculture not only requires “staying power”, but also a well-developed financing plan.
In contrast to a leisure business, a farm that strives for financial profit is referred to as a farm. Agricultural areas include arable and plant cultivation as well as animal breeding, but also forestry, fruit growing and viticulture. Nowadays, technology has caught up with these areas, so that many necessary investments in the technology area are very cost-intensive.
Important steps for starting a business
Certain bureaucratic measures are absolutely necessary for setting up your own farm. This includes, among other things, the registration of the company with the municipality and the mandatory registration with the Chamber of Agriculture. In addition, the tax office wants to be informed, questions about income and sales tax payment must be clarified.
In addition to these steps, the question of financing is of course crucial for starting a business – not only in agriculture. Therefore, as in other industries, it is important to develop a well-founded financing plan in order to know how high the costs are that have to be borne.
Which type of loan is the right one?
Agriculture is a capital-intensive industry, so an equity share of at least 30 percent is recommended when setting up or taking over a farm. The rest of the required sum is taken out as a loan and then repaid piece by piece. A prerequisite for continuous repayment is of course that a profit can be foreseen in order to be able to cope with the repayment. The “golden rule of financing” provides that the length of the repayment corresponds to the life of the investment object.
Use state funding programs
Especially for the agricultural sector, start-ups have various funding options available. An early application is important in order to receive the funds on time.
Three factors are decisive for the long-term success of an agricultural business: profitability through long-term profit, financial stability and healthy liquidity through reserves in the form of equity or debt.