Welcome to the ABCs of Small Business Industry here on our MyCorp blog! In case you’re just tuning in to join us, each week we’ll be looking into a different industry to see what all you need to get started therein, the types of entities most popular within said industries to form, and the overall job outlook to determine if it’s going to be sustainable to you and your business or not. Last week we kicked off the posts with a look at how to get started in accounting and this week. we’re exploring agriculture and the wide world of food operations, farming, and CSA (community supported agriculture) groups in it!
What do you need to go into the agricultural industry?
Every business is run a little differently than the next, but if you plan on making and/or selling food to the public you must have a food license. This license ensures that the food you’re growing, selling, or making is wholesome and safe for the public to consume and without this type of license in place, your business could face serious consequences. Additional licenses to know about include the retail food license (for businesses selling food directly to the customer) and a food processing plant license (for wholesale use, meaning you can sell not only to the customer but to major grocery store chains and online). There are several rules in place for anyone in food operations to keep in mind before they can receive their license so be sure you meet all the requirements and personnel standards.
Outside of the food license, you’ll also need to apply for local/state business and operating licenses, get a DBA name in place if you plan to do business under a different name from your own, an EIN number if you want to hire anyone to help (which you probably will want to do since working in agriculture is tough to handle alone!), and a thorough five year business plan in place with a SWOT analysis in place for everything from the land to the climate you’ll be established in.
What sort of entity should someone going into food operations form?
It’s very difficult to work in food as a solopreneur, so the most popular entity of choice here tends to be a general partnership or limited partnership. This is an especially ideal pick for anyone looking to make this kind of work as part of the family business. Partnerships allow two or more people to conduct business together and share the profits accordingly. Within a general partnership, this doesn’t have to mean sharing with another person either, but rather, you may share with another entity like a corporation or LLC. Limited partnerships, on the other hand, mean there’s a general partner who controls business operations, and a limited partner who doesn’t get to be as involved in the day-to-day as the general partner is, but does have a liability shield in place for any debts or claims made.
How healthy is the industry?
Robust as ever, with a reported 3.2 farm operators working in the United States alone and 2.7 million hired to work on farms the same year – up 4% from 2007! And don’t worry, if you live in a particularly dry state and don’t think farming outdoors is a viable option, there’s also plenty of ways to bring agriculture indoors and lots of great inexpensive benefits that come with doing so!
Want to exercise your green thumb as a farmer or anywhere in the agricultural industry? MyCorp can help you get started! Just leave a comment below, or give us a call at 1 (877) 692-6772, and we’ll help you get your licenses, DBAs, and EINs squared away!