The Economics of Small, Farm Products - Farm Flows

I haven't written one of those boring Farm Flows posts in a while, so I thought I better get back on it.

Actually, we've received a bunch of questions about the economics of soapmaking and whether it can sustain a small farm, such as ours. We love that so many people email us questions about leaving the rat-race and starting a small business. It's inspring, and I hope that some of what we share on our site will help them achieve their dreams. 

However, we don't know whether what we're doing will work. We're not yet paying the bills with farm income. What we do know is what it would take for items such as soap, lip salves, etc to provide a meaningful income for us. And that's what I think people really want to know. Can I move to the middle of nowhere and make soap (or other small, farm products) and live a happy life? The answer is my least favorite of all answers: it depends.

Our soaps and lip salves on display at OMG in Nashville

I am not going to give you all of our numbers because I want you to figure it out for yourself. Don't rely on other people's numbers. They aren't your own.

My goal in this article is to help walk you through the process that I use when I'm trying to answer this question for ourselves. At Little Seed our goal is NOT to create a giant business. We want to make an income sufficient to cover our bills and save a little for the future. We DO NOT want to sit in an office and manage employees. We want to be farmers. You should read this article with that standpoint in mind. 

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Buying Points vs. Higher Down Payment

During the course of buying the farm an interesting question came up about “buying points”. This was our first mortgage so I was pretty curious about everything going on with the banks and inspectors and such. Our lender casually mentioned the option of buying points and then quickly dismissed it as something that no one ever does. In fact, she had only seen it done once. When she said that I got even more interested.

I know not all beginning (or existing) farmers will be able to buy land, but for those who do I thought this topic would be helpful. There's not much good info about the trade-offs between buying points and putting down a larger down payment online, so this is just my own analysis, I'm very welcome to other opinions.

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Insurance for the Small Farm

Following up on the First Time Farm-Buyer's Checklist, I posted some thoughts on insurance over on What are your experiences with insurance?

1.) Proximity to fire station

When we were looking at properties we hadn’t considered the fact that insurance companies might prefer it if we were close to a fire station! Wait, aren’t fire stations all over the place? Well, turns out if you’re in the middle of nowhere they could be pretty far away. These types of things don’t cross us city-folks’ minds.

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