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We make it easy to do everyday banking at Horizon, but everybody still needs some sensible advice from time to time to help with their goals and strategies for saving, investing wisely and making the most out of your financial journey. That’s why we provide fresh advice topics to help you along the way.

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Agribusiness Finance Tips For First Time Farmers from an Expert

Farmer looking out into field

If you're just starting out your agribusiness, managing your farming business's finances can be intimidating. That's why we asked one of our advisors to provide tips on how to get started with your business's finances. 

“Starting a farm business can be overwhelming at times.  There are a variety of programs and tools available to young and beginning farmers, and we are here to help,” says Kristen Lovell, Agricultural Lending Group Manager. “Horizon is committed to financing the next generation of agriculture.” 

When developing your business plan, keep these tips in mind:

  1. Decide on what type of operation you want to run.
    New farmers and ranchers should either be very efficient, low-cost producers or should add value that someone else will pay for. Determining which type of business you'll run will affect your cash flow down the line.
  2. Keep detailed records.
    Keeping accurate and detailed records encourages both short-term and long-term financial planning. Not only does it help you stay organized and make better management decisions, it makes it easier for your lender to assess your financial situation.
  3. Evaluate your investments, predict when they'll breakeven.
    Keeping track of how long it will take to generate enough cash flows from a capital investment to justify it will help you make better financial decisions for the future.
  4. Know your costs.
    When you consider your cost of living and expenditures, including depreciation and family living, you’ll have a better understanding of your overall financial situation. Your local banker can provide guidelines to monitor your financial ratios.
  5. Develop a business and marketing milestones.
    You will work smarter and improve your odds when you focus and organize your goals.
  6. Think about ways to supplement your operations' income until it is large enough to employ you full-time. For this, you can either look into a side hustle or you can consult your local bank about grants or loans. (See #9)
  7. Look into renting farm equipment or custom hiring instead of purchasing.
  8. Shop around.
    Getting price quotes on supplies such as feed, fertilizer and fuel can uncover lower cost sources. Your research might get you a discount from a local, preferred supplier that gives excellent service. Make sure product quality is part of your evaluation.
  9. Ask your banker about grants, loans, and other means of gaining funding for your operations. Many states have funding set aside to award to beginning agribusinesses, your banker should be able to find some programs you can apply to. Some banks also offer special benefits for first-time schedule F tax filers. 
  10. When in doubt, ask for help and guidance from someone you trust–an experienced farmer or rancher, a trusted adviser or your local banker. You don’t have to make these important financial decisions alone.

At Horizon Bank, we understand your unique financial needs from seasonal income restrictions to purchasing and maintaining agricultural equipment.

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