Buying and Selling an Agricultural Business

Updated Oct 8 



The agricultural industry is one of the longest-lasting industries on Earth. The great part about getting into this industry is that it's expected to grow at a rate of 3% a year for at least the next ten years.

What Types of Agricultural Businesses Are There


There are multiple options to choose from in the agricultural industry! Starting with a small business and growing it from there is a great way to get the largest percentage of yields while beginning with a larger company and extending it can give you a larger profit beyond ratios.


Some of the most popular agricultural businesses to consider getting into are ones like farming machinery manufacturing, sharecropping, ranching, aquaculture, and organic farming. These have options that can narrow down what you do until you specialize in a specific crop or type of animal.


Fortunately, with so many options available, there's no end to the choices you can make based on your interests. You don't have to be in love with cattle ear tag systems to buy or sell them: but being knowledgeable and interested in them makes it an easier business to run.

What To Consider When Looking At Buying Options


When you’re considering which company to buy, there are a few things to consider.

Is agriculture the right call for you? Although you don’t have to be a genius on the topic, do you have an interest in this industry? Can you hold a conversation about hive maintenance if you’re interested in buying a pollination company?


How much of a company can you afford? Don't treat your life savings as your budget here. Instead, look at it as you would any business decision: it's a gamble. If you put your all into a rain catcher company, would you be able to handle the loss from that company? Try to keep your budget more conservative, and if you can get a low-interest loan, try not to go for the full amount available.


Over time flipping companies, you’ll be able to gain confidence and know what works for you: don’t risk everything on the first one you purchase.


Company Red Flags to Avoid


You must know the red business flags that should tell you not to buy it. These are problems that can make you lose money or add a lot of complications to your purchase.

Has the company had to lay anyone off within the last year? Discuss why, and see if the reasons are satisfactory or seem to be hiding losses. Has the company changed hands a lot? Are there problems with bookkeeping and paper trails?


Don't think that it's a good match just because a company is inexpensive or in your interests. If you fall for a poor match and buy something that won't work for you, you could be looking at massive losses. It's better to do too much research rather than too little.

How To Increase The Company’s Value


Once you own a company, it's a good idea to ensure that it increases profits and value. One of the quickest ways to add immediate value to the property the business is on is by buying land. Expanding the property that the company can operate on opens you up to future expansions and additions that can earn revenue. You can further increase your company's value by consulting with a professional agriculture business broker or consultants/experts who have been in the agricultural business for quite some time.


Expanding your operations by advertising thoroughly online, cutting down costs with those you source your materials from, and making great connections with buyers and leads will grow your company and increase your profits.


When Is It Time To Sell?


The time to sell can be hard to spot, but it's up to everyone on their own needs. If you can grow a company and increase its value and profits, it can be hard to let it go while it's starting to bloom. There's a lot of pride you can take in being the person who made this agricultural business succeed.


If you've seen a steady increase in profits, there haven't been any layoffs or labor issues, and the results are looking awesome: consider selling your farmland or agricultural business. This upward momentum is often enough to land you a large increase in value and can allow you to gain enough capital to invest in a larger company.


Don't sell your company if you haven't even been able to pay off the interest on the loan (if you needed one). Instead, try to hold onto it for at least five to ten years to earn some income and prove yourself capable of making a business succeed.

Flipping Companies Is A High-Risk Game


Whether you've made investments or not, flipping agricultural businesses can be a huge investment to make. However, the success that you can gain off of these businesses can offer large returns, so make good choices while building and buying companies and work to make something that will thrive in any market.

Agribusiness

Article Added

Corey Tyner Phoenix, AZ
Updated Oct 8
 

Buying and Selling an Agricultural Business

The agricultural industry is one of the longest-lasting industries on Earth. The great part about getting into this industry is that it's expected to grow at a rate of 3% a year for at least the next ten years. What Types of Agricultural Businesses Are...

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Categories: Agribusiness

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