Looking for a produce farm business plan? You're in the right place.
A bank, a landlord or a family investor will ask the same few things of a new vegetable farm. How much does it cost to get from bare ground to first harvest? What does each acre earn? When does the farm stop losing money? What happens after a poor season? Most templates leave those cells empty.
In this article we'll walk through a complete sample business plan for a 14-acre vegetable and flower farm near Eugene, Oregon, section by section. We'll cover the executive summary, the SWOT analysis and, in particular, all of the financials.
Here's what you'll take away:
- The farm summary: see how to put land, crops, outlets and the ask on one page, so a reader knows what you need and why
- The SWOT analysis: learn how to name a farm's weak points, such as one founder and one water source, without losing the reader
- The start-up budget: find out what a tractor, tunnels and a cooler cost against the cash reserve that carries the farm to its first sale
- The first year, month by month: spot the winter and spring months with no income before you reach them
- The outlet mix: compare CSA shares, market stalls, wholesale and flowers, and see how each one scales with acres and labor hours
- The five-year profit, cash flow and balance sheet: understand how each hire, lease change and price rise shows up in the numbers
- The poor-season case: have an answer ready for the "what if revenue is 20% short?" question, and the steps the owner takes in response
If you're planning a produce farm, read this before you write your own. The farm is fictional, so take what fits your land and change the rest.
In this plan
Want a produce farm business plan you can edit for your own business? Get the produce farm business plan template and build it in the Toolkit.
Mill Farm at a Glance
Mill Farm is a diversified vegetable and cut-flower farm on 14 leased acres along the McKenzie River at Blue River, Oregon, about an hour's drive east of Eugene. Marisol Quinn, founder and head grower, owns it with a minority investor, her brother Tomas. The farm takes possession of the land on January 1, 2027 and sells for the first time in April.
The farm needs $225,000: $65,000 of Marisol's savings, $55,000 from Tomas and a $105,000 bank loan. Equipment takes $96,000, $13,000 covers legal work, licenses and the launch, and $116,000 is held as a cash reserve.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $100,200 | $170,000 | $250,000 |
| Net income after start-up costs | ($72,626) | ($25,254) | $10,209 |
| Closing cash | $62,576 | $31,256 | $33,588 |
Sales come from four outlets: a 20-week summer CSA box (64 members in 2027, 156 by Year 5), two farmers market stalls, wholesale to restaurants, a co-op and a distributor, and cut flowers. Year 1 loses money because the farm pays Marisol, a lease and the seed bills for three months before there is anything to sell, then carries a field hand through the first season. Year 3 is the first profitable year.
A poor-season case sits at the end of the plan. With revenue 20% lower, Marisol delays two hires, drops a third, trims marketing, cuts her own pay and skips distributions, and the farm still ends every year with cash.
The farm's pitch is a short crop list sold through four outlets. Boxes are paid for before the season, stalls set the price, wholesale takes volume and flowers carry the tunnels.
The Farm and the Land
Legal name: Mill Farm LLC, an Oregon limited liability company. Owners: Marisol Quinn, majority owner and manager; Tomas Quinn, minority investor with no day-to-day role. Land: 14 acres on a ten-year lease with a renewal option, plus an existing pack shed and barn. Water: a pump on the river and drip lines, under the landowner's water right. Stage: pre-launch. The lease is in draft and 38 CSA shares are reserved with $100 deposits.
Why this ground
The parcel is flat river-bottom land that has grown hay and pasture for years, so there is no vegetable disease history and no row of old sprays to explain to a certifier. The landlord keeps livestock on the far field. The risk is the valley itself. Summer smoke, wildfire and river flooding are all possible in the McKenzie valley. The plan covers them through insurance quotes with and without fire cover and a written evacuation routine for the crew and the cooler stock.
What the farm grows
About 14 crops chosen for return per bed foot and low handling: salad and cooking greens, carrots, beets, alliums and garlic, summer squash, winter squash and potatoes in the field, and tomatoes, cucumbers and early greens in two high tunnels. Flowers (dahlias, zinnias, sunflowers and a spring bulb crop) occupy about half an acre, rising to an acre from 2030. Of the 14 leased acres, 6 are cropped in 2027, 10 in 2029 and 12 in 2031. The rest rest in cover crop.
Targets for the first three seasons
- 64 CSA members in 2027, 100 in 2028 and 136 in 2029.
- $250,000 of revenue in 2029 and a first profitable year.
- Lease four more acres in 2030, and repay the bank loan on schedule from 2028.
Water and food safety
The landowner's water right is checked with the Oregon Water Resources Department before the lease is signed. Marisol completes produce-safety training before the first sale. Whether the FDA's Produce Safety Rule covers the farm depends on its sales, so the farm confirms coverage with the Oregon Department of Agriculture and runs a written wash-and-pack routine either way.
Who Buys Vegetables Near Eugene
The local market
Mill Farm sells into Eugene-area farmers markets, a CSA pickup network and a handful of restaurants and co-ops. USDA's Census of Agriculture counts farms and sales by county and is the official source for how many farms already serve Lane County. The plan quotes no county count.
What a share, a stall day and a wholesale case are worth
A season-long CSA share is a prepaid purchase: the member funds the farm in spring and takes a weekly box. Stalls sell at retail prices, wholesale sells at a discount to retail for volume and a regular order. Mill Farm's $650 share, $520 average first-season stall day and $2,400 average wholesale account are its own planning figures. Local CSA prices vary widely, so the $650 price is checked against the CSA farms nearest the pickup sites before sign-ups open.
Who else sells to the same buyers
| Alternative | What it offers | Why a buyer picks it | How Mill Farm differs by design |
|---|---|---|---|
| Established CSA and market farms | Boxes and stalls with long track records | Loyalty and a known farmer | New crops, a flower add-on and pickup sites near the river |
| Large Willamette Valley wholesale growers | Volume and low unit prices | Price and year-round supply | Small lots of greens, alliums and tunnel tomatoes picked the day before |
| Grocery chains | Convenience and every item every week | Single shop | Named farm and seasonal variety |
| Backyard and community gardens | Free or very cheap produce | Cost | Reliable weekly volume |
SWOT
| Strengths | Weaknesses |
|---|---|
| Six seasons of vegetable farm experience, three as a field manager | One founder, so a lost month in summer stops sales |
| Equipment bought used and paid for by the loan | No customer base on day one |
| 38 shares reserved before the first seed goes in | Year 1 loses money and draws on the reserve |
| Opportunities | Threats |
|---|---|
| Restaurants and co-ops looking for named local farms | Wildfire smoke, river flooding or an early frost |
| Flower subscriptions and florist accounts | A key customer or the landlord leaving |
| Tunnels extend the season on both ends | Rising wage and workers' compensation costs |
The Four Kinds of Buyer
The CSA household
Typically a household of two to four within 30 minutes of a pickup site, paying $650 for 20 weeks. They want a box they do not have to plan, and they stay if the box is varied and the pickup is easy. About 70% of members are expected to renew each year.
The stall regular
A shopper who comes for specific items, usually greens, tomatoes or flowers, and buys by the bunch. These buyers set the farm's retail prices and bring in new CSA members.
The restaurant and co-op buyer
A chef or produce buyer who orders weekly, wants the same quantity every week and pays within 30 days. Nine accounts in Year 1 average $2,400 for the season. Sixteen accounts in Year 3 average $4,000.
The florist and event customer
A small florist or wedding designer buying flowers by the bucket. This is the smallest group in Year 1 and the highest value per square foot.
Selling the Harvest
From sign-up to first box
CSA sign-ups open in January through the farm's website, with half the fee due at sign-up and the rest by May 1. Marisol follows up with every member by phone or email. Boxes are packed Wednesday and Saturday mornings for pickup at the farm and two drop sites.
How each outlet is priced
Shares are priced per season, not per box. Stall prices follow the stall next door, set slightly higher on tunnel crops. Wholesale prices are agreed with each buyer in March, and storage crops are quoted in October.
Year 1 sales by outlet
| Outlet | Year 1 revenue | Share |
|---|---|---|
| CSA shares | $41,600 | 42% |
| Farmers market stalls | $30,300 | 30% |
| Wholesale | $21,400 | 21% |
| Cut flowers | $6,900 | 7% |
Renewal and growth
Renewal runs at about 70% to 75% a year. To reach 100 members in 2028, about 55 new households are needed. To reach 136 in 2029, about 64.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CSA members | 64 | 100 | 136 | 148 | 156 |
Growth slows after Year 3 because packing and delivery time, not demand, become the limit.
Marketing Plan
Marketing spend and what it buys
The Year 1 budget is $11,000: $6,500 of launch spend from start-up capital plus $4,500 of running costs, or 11% of Year 1 revenue. It falls to 2% of revenue by Year 5. Charged entirely to the 64 CSA members, Year 1 comes to about $172 a member, a quarter of one season's fee. In practice the same money also builds the stall and wholesale customer base.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Website and CSA sign-up page (launch) | $3,500 | Online sign-up and payment, crop list and pickup map |
| Stall signage and tent graphics (launch) | $1,500 | A recognizable stall at both markets |
| Launch event and sample boxes (launch) | $1,500 | Introductions to the first chefs and co-op buyers |
| Email and social posts | $1,800 | Weekly harvest list to members and stall regulars |
| Local print and community boards | $1,200 | Pickup-site and neighbor awareness |
| Referral credit for members | $1,500 | A free week for each referred member who signs up |
Marketing milestones
- January 2027: sign-ups open; 38 shares already reserved.
- April 2027: first stall day and first wholesale deliveries.
- June 2027: first CSA box goes out to 64 members.
- October 2027: renewals open for the 2028 season.
Running the Fields
The ground and the buildings
14 leased acres at about $500 an acre, plus a pack shed and barn at $500 a month, come to $13,000 in Year 1. Four more acres are leased in Year 4 for about $2,000 a year, which lets the rotation rest ground as cropping reaches 11 and then 12 acres. Utilities are separate, mostly power for the cooler, pump and propagation benches.
Equipment
A used 50-horsepower tractor with a bed shaper, tiller and transplanter ($30,000), two 30 by 96 foot high tunnels ($19,000), drip irrigation and a pump sized for 12 acres ($11,000), a walk-in cooler and wash-pack station ($14,500), a used cargo van ($14,000) and market gear and hand tools ($7,500). Replacement tools, tires and irrigation parts are budgeted from Year 2.
The weekly rhythm
Monday and Tuesday: field work and transplanting. Wednesday: CSA harvest and pack, with a Wednesday market. Thursday: wholesale harvest and delivery. Friday: field work, flowers and market prep. Saturday: market. Sunday: irrigation checks and weeding. A cold chain runs from harvest bin to cooler to van, and nothing sits in a hot van.
Cold storage and stored crops
The walk-in cooler holds the week's harvest. Onions, garlic, potatoes and winter squash are cured and stored from September for wholesale sales through December. The balance sheet shows seed, packaging and stored crops as inventory at 3% of sales.
Who does the work
Marisol alone from January to March, then a full-time field hand from April. A part-time market hand joins in May 2028, a second field hand in May 2029 and a harvest hand in June 2030, each for the months they are needed. All seasonal staff are paid only for the months they work.
Licenses and insurance
- Oregon business registration and an Oregon Department of Agriculture check on any license needed for packing and selling produce.
- Produce-safety training and a written food-safety plan.
- Organic certification application in Year 1, with the transition period confirmed with a certifier.
- Farm liability and product liability cover, vehicle and equipment cover, budgeted at $6,000 in Year 1.
Suppliers and advisers on call
Seed companies, a compost supplier, an irrigation dealer, an organic certifier and a farm accountant. A county extension office is Marisol's first call on pests and soil tests.
Marisol and the Crew
Marisol Quinn, founder and head grower
Marisol has six seasons on Willamette Valley vegetable farms, the last three as field manager on a 30-acre certified-organic operation, where she ran a crew of five and the farm's CSA packing. She has a horticulture degree. Her $65,000 is the savings from those years of work.
Where the team is thin
She has not run a farm's books, negotiated a land lease or managed wholesale accounts as the owner. The plan answers this with a farm accountant on call, a lawyer for the lease, and a weekly review of the CSA and wholesale order list.
If Marisol is out
For a short absence the field hand runs the harvest and a neighboring grower covers the stall. For a long one the farm has disability cover on Marisol and the market and delivery hand is trained to run the pack day.
Ownership and the bank
Marisol owns the majority of Mill Farm LLC, Tomas Quinn owns a minority stake, and Marisol gives the bank a personal guarantee. The seven-year loan is shorter than the ten-year lease, and the lease gives the farm the right to remove the tunnels, cooler and pack station at its end. The loan carries a covenant to send quarterly accounts.
Farm Finances
The figures below come from one five-year model of Mill Farm: monthly for 2027, then yearly. The inputs are listed before the results so each result can be traced back to a field, a price or a crew hour.
Tractor, tunnels and the cash to reach harvest
| Use of funds | Amount |
|---|---|
| Used 50-horsepower tractor with bed shaper, tiller and transplanter | $30,000 |
| Two 30 by 96 foot high tunnels | $19,000 |
| Drip irrigation, pump and filtration for 12 acres | $11,000 |
| Walk-in cooler, wash and pack station | $14,500 |
| Used cargo van with shelving | $14,000 |
| Market tents, tables, scales, card readers; hand tools; propagation benches | $7,500 |
| Business license, food-safety training, organic certification application | $2,500 |
| Legal: entity, land lease, CSA terms | $4,000 |
| Launch: website, CSA sign-up drive, stall signage | $6,500 |
| Cash reserve for the months before the first harvest | $116,000 |
| Total uses | $225,000 |
| Source of funds | Amount |
|---|---|
| Marisol Quinn's savings | $65,000 |
| Equity from her brother | $55,000 |
| Bank equipment and operating loan | $105,000 |
| Total sources | $225,000 |
Marisol puts in $65,000 of savings and her brother invests $55,000 as a minority owner, so equity is $120,000 of the $225,000 total (53%). The bank lends $105,000 over seven years at 9.5%, interest-only for the first twelve months, secured on the tractor, van and cooler with Marisol's personal guarantee. The 9.5% rate is a planning figure. A Farm Service Agency loan for new farmers is the usual alternative to price against it. Equipment takes $96,000 and $13,000 is expensed at opening. The other $116,000 is held as a reserve, because the farm pays a founder, a lease and seed bills from January and sells nothing until April.
Field and price figures behind the model
- Land: 14 acres leased at about $500 an acre ($7,000 a year) plus a pack shed and barn at $500 a month ($6,000), which is the $13,000 rent line in Year 1. Four more acres are leased from Year 4 for about $2,000 a year. Acres actually cropped are 6, 8, 10, 11 and 12 across the five years, with the rest in cover crop or fallow. Revenue per cropped acre therefore runs $16,700, $21,300, $25,000, $26,900 and $27,700. Tunnels and flowers lift that average well above field vegetables alone.
- CSA: 64 shares in 2027 at $650 for 20 weekly boxes (about $32.50 a box), 38 of them reserved before January. Prices rise 3% a year. Share counts are 100, 136, 148 and 156 in Years 2 to 5, which with the price rises reproduces the CSA line to within rounding. Revenue is booked as boxes go out. In practice members pay in spring, so the model understates early cash.
- Markets: two stalls from April to November. Year 1 is about 58 stall-days at $520, Year 2 about 70 at $700 and Year 3 about 85 at $780. Stall fees and bags are inside the 21% direct cost on this line.
- Wholesale: about 9 accounts in Year 1 at an average $2,400 for the season, rising to 16 accounts at $4,000 in Year 3. Storage crops (onions, garlic, winter squash, potatoes) carry sales into November and December. Accounts pay on 30-day terms. Market, CSA and flower sales are paid at once, so receivables average 9 days across the farm.
- Flowers: $6,900 in Year 1, roughly 460 bouquets at $15, growing with florist accounts and a small bouquet subscription.
- Direct costs run at 15% of CSA sales, 21% of market sales, 20% of wholesale and 12% of flowers, which blends to about 18% a year. They cover seed, transplants, compost and organic fertilizer, boxes and bags, stall fees and card processing. Fuel, repairs and field supplies sit in operating costs.
- Labor: field hands are paid $18 an hour ($37,440 on a 2,080-hour basis) only for the months they work. Payroll adds 30% for field crew, covering payroll taxes, workers' compensation for farm work and paid leave, and 27% for Marisol. The part-time hand carries 15%. Pay raises of 3% a year appear as a separate line from Year 2. Confirm the current Oregon minimum wage and farm overtime rules with the state labor bureau.
- Hours: Marisol works about 2,400 hours in Year 1 and 2,600 after that. Hired hours are about 1,200 in Year 1 and 2,700 in Year 3. Revenue per labor hour is therefore about $28 in Year 1, $47 in Year 3 and $54 in Year 5. Year 5 is the plan's most demanding figure. It rests on a short crop list, one bed system and tractor, and tunnels. Hours per cropped acre run about 600 in Year 1 and 515 in Year 5, which is lean for intensive vegetables, so a labor overrun is the first risk the numbers face.
- Insurance of $6,000 in Year 1 covers farm and product liability, the van, equipment and property. Premiums vary by carrier and by wildfire exposure, and the farm gets quotes with and without fire and smoke cover.
- Working capital: receivables 9 days, supplier bills paid in 20 days, and seed, packaging and stored crops held at 3% of sales.
- Tax is charged at the federal corporate rate of 21% (Internal Revenue Code section 11) and Oregon's 6.6% rate on the first $1 million of taxable income. No tax is due in any year because the losses of Years 1 and 2 carry forward and are not used up by Year 5. A farm like this would usually be a pass-through entity, and loss-carryforward limits may apply, so the zero is a modeling convenience.
- Owner distributions of $15,000 are paid in Year 5 only, once cash comfortably covers the loan payments. The loan stays in place.
Revenue by outlet
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| CSA shares (20-week summer box) | $41,600 | $67,000 | $94,000 | $105,000 | $114,000 |
| Farmers market stalls | $30,300 | $49,000 | $66,000 | $76,000 | $85,000 |
| Wholesale: restaurants, co-op and distributor | $21,400 | $40,000 | $64,000 | $84,000 | $98,000 |
| Cut flowers and bouquets | $6,900 | $14,000 | $26,000 | $31,000 | $35,000 |
| Total revenue | $100,200 | $170,000 | $250,000 | $296,000 | $332,000 |
| Growth on prior year | – | 70% | 47% | 18% | 12% |
The CSA line gives the farm its base: boxes are sold ahead of the season and make up 42% of Year 1 revenue and 34% of Year 5. Market stalls bring the best price per pound but depend on the weather and on Marisol being in two places at once, so wholesale carries the growth, from 21% of Year 1 revenue to 30% of Year 5. Flowers are the smallest line and the highest value per square foot.
Month by month through the 2027 season
| Month | CSA shares (20-week summer box) | Farmers market stalls | Wholesale: restaurants, co-op and distributor | Cut flowers and bouquets | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $0 | $0 | $0 | $0 | $0 | ($10,119) |
| Feb 2027 | $0 | $0 | $0 | $0 | $0 | ($10,119) |
| Mar 2027 | $0 | $0 | $0 | $0 | $0 | ($10,119) |
| Apr 2027 | $0 | $900 | $700 | $0 | $1,600 | ($8,802) |
| May 2027 | $0 | $2,800 | $1,800 | $400 | $5,000 | ($6,003) |
| Jun 2027 | $8,320 | $4,600 | $2,600 | $1,000 | $16,520 | $3,481 |
| Jul 2027 | $10,400 | $5,600 | $3,200 | $1,500 | $20,700 | $6,922 |
| Aug 2027 | $8,320 | $6,200 | $3,600 | $1,800 | $19,920 | $6,280 |
| Sep 2027 | $8,320 | $5,200 | $3,600 | $1,500 | $18,620 | $5,209 |
| Oct 2027 | $6,240 | $3,600 | $3,200 | $700 | $13,740 | $1,192 |
| Nov 2027 | $0 | $1,400 | $1,800 | $0 | $3,200 | ($7,485) |
| Dec 2027 | $0 | $0 | $900 | $0 | $900 | ($9,378) |
There is no revenue from January to March. Sales start in April with early greens from the tunnels and stay above $13,000 a month from June to October. EBITDA is positive in those five months and negative in the other seven. Month-end cash stays above $60,000 all year and ends December at $62,576 after receivables and stock. The model spreads payroll and operating costs evenly across the twelve months, so the winter months show more cost than a seasonal crew would cost and the summer months less. The yearly totals are unaffected.
Crew plan
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and head grower | $42,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Field hand (full time, April to October) | $37,440 | Month 4 | – | – | – | – | – |
| Market and delivery hand (part time, May to October) | $23,000 | Month 17 | – | – | – | – | – |
| Second field hand (full time, May to September) | $37,440 | Month 29 | – | – | – | – | – |
| Harvest and pack hand (full time, June to October) | $37,440 | Month 42 | – | – | – | – | – |
| Total payroll incl. on-costs | $81,732 | $94,957 | $115,237 | $135,517 | $135,517 |
Marisol is alone until April. A full-time field hand joins each April through October from month 4. A part-time market and delivery hand starts in month 17 (May 2028), a second field hand in month 29 (May 2029) and a harvest and pack hand in month 42 (June 2030). Each hire follows a jump in revenue. Seasonal roles are off payroll in December, so the year-end columns show only Marisol. Full-time headcount in summer is 2 in 2027 and 2028, 3 in 2029 and 4 from 2030, with the part-time hand on top from 2028. The wage column is the annual-equivalent rate, and payroll in the last row covers only the months worked.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $100,200 | $170,000 | $250,000 | $296,000 | $332,000 |
| Direct costs (seed, transplants, compost, packaging, stall fees) | ($17,711) | ($30,049) | ($44,189) | ($52,320) | ($58,683) |
| Gross profit | $82,489 | $139,951 | $205,811 | $243,680 | $273,317 |
| Payroll incl. on-costs | ($81,732) | ($94,957) | ($115,237) | ($135,517) | ($135,517) |
| Rent | ($13,000) | ($13,400) | ($13,800) | ($16,200) | ($16,700) |
| Utilities | ($4,200) | ($4,800) | ($5,400) | ($5,800) | ($6,200) |
| Marketing | ($4,500) | ($5,500) | ($6,500) | ($7,000) | ($7,500) |
| Insurance | ($6,000) | ($6,500) | ($7,200) | ($7,800) | ($8,300) |
| Professional fees | ($3,000) | ($3,200) | ($3,500) | ($3,800) | ($4,000) |
| Software subscriptions | ($1,400) | ($1,700) | ($2,000) | ($2,200) | ($2,400) |
| Fuel, repairs and field supplies | ($5,500) | ($7,500) | ($9,500) | ($11,000) | ($12,000) |
| Certifications, water-use fees and inspections | ($1,800) | ($2,100) | ($2,300) | ($2,500) | ($2,700) |
| Equipment replacement | $0 | ($2,000) | ($3,500) | ($6,000) | ($4,500) |
| Bad debt allowance | ($300) | ($600) | ($900) | ($1,200) | ($1,400) |
| Annual pay raises (3% a year) | $0 | ($2,849) | ($7,018) | ($12,566) | ($17,009) |
| EBITDA | ($38,943) | ($5,155) | $28,956 | $32,097 | $55,091 |
| Depreciation | ($10,708) | ($10,708) | ($10,708) | ($10,708) | ($10,708) |
| Interest | ($9,975) | ($9,391) | ($8,038) | ($6,551) | ($4,916) |
| Income tax | $0 | $0 | $0 | $0 | $0 |
| Net income before start-up costs | ($59,626) | ($25,254) | $10,209 | $14,838 | $39,467 |
| Start-up costs expensed at opening (legal, licenses, launch marketing) | ($13,000) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($72,626) | ($25,254) | $10,209 | $14,838 | $39,467 |
Year 1 loses $59,626 before start-up costs and $72,626 after them. Year 2 loses $25,254, as the farm adds acres and its first part-time hand before sales catch up. Year 3 is the first profitable year, at $10,209, an 11.6% EBITDA margin. Year 4 adds a harvest hand and four leased acres and nets $14,838. Year 5 reaches $39,467 on 16.6% EBITDA. No income tax is charged in any year because the earlier losses carry forward.
Cash through the seasons
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($66,424) | ($17,685) | $17,320 | $23,478 | $48,556 |
| Equipment, tunnels and pack station | ($96,000) | $0 | $0 | $0 | $0 |
| Funding received | $225,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | ($13,635) | ($14,988) | ($16,475) | ($18,110) |
| Owner distributions | $0 | $0 | $0 | $0 | ($15,000) |
| Net change in cash | $62,576 | ($31,320) | $2,332 | $7,002 | $15,446 |
| Closing cash | $62,576 | $31,256 | $33,588 | $40,590 | $56,036 |
Closing cash stays positive at every year end. The low year-end figure is $31,256 in Year 2. The model spreads Years 2 to 5 evenly across the months, so it cannot show the spring low in 2028, which will sit below the year-end number. The reserve is sized for that gap, and CSA payments collected in March and April would ease it. The first distribution, $15,000, is in Year 5.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $62,576 | $31,256 | $33,588 | $40,590 | $56,036 |
| Accounts receivable | $2,471 | $4,192 | $6,164 | $7,299 | $8,186 |
| Seed, packaging and stored crops | $3,006 | $5,100 | $7,500 | $8,880 | $9,960 |
| Equipment, tunnels and pack station (net) | $85,292 | $74,583 | $63,875 | $53,167 | $42,458 |
| Total assets | $153,344 | $115,131 | $111,127 | $109,936 | $116,641 |
| Accounts payable (seed, compost, packaging) | $970 | $1,647 | $2,421 | $2,867 | $3,216 |
| Bank loan | $105,000 | $91,365 | $76,378 | $59,902 | $41,792 |
| Paid-in capital | $120,000 | $120,000 | $120,000 | $120,000 | $120,000 |
| Retained earnings | ($72,626) | ($97,881) | ($87,671) | ($72,833) | ($48,367) |
| Total liabilities and equity | $153,344 | $115,131 | $111,127 | $109,936 | $116,641 |
Break-even and labor measures
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -38.9% | -3.0% | 11.6% | 10.8% | 16.6% |
| Net margin (before start-up costs) | -59.5% | -14.9% | 4.1% | 5.0% | 11.9% |
| Payroll incl. pay raises as share of revenue | 82% | 58% | 49% | 50% | 46% |
| Revenue per full-time equivalent at year end | $100,200 | $170,000 | $250,000 | $296,000 | $332,000 |
| Average monthly revenue | $8,350 | $14,167 | $20,833 | $24,667 | $27,667 |
| Monthly revenue needed to cover operating costs | $12,292 | $14,688 | $17,902 | $21,418 | $22,090 |
| Debt service cover (EBITDA / interest + principal) | -3.9x | -0.2x | 1.3x | 1.4x | 2.4x |
Year 1 averages $8,350 of revenue a month against $12,292 needed to cover operating costs, so it loses money. Year 2 averages $14,167 against $14,688, which is why the loss is small. From Year 3 revenue clears the line by $2,900 to $5,600 a month. Debt service cover is negative in Years 1 and 2, reaches 1.3x in Year 3 and 2.4x in Year 5. Revenue per full-time equivalent at year end equals total revenue here, because only Marisol is on payroll in December, so the labor-hour figures in the list above are the better productivity measure. A 15% overrun on hired hours would cost about $9,300 in Year 3 and leave profit near $900.
A poor season: 20% less revenue
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $80,160 | $136,000 | $200,000 | $236,800 | $265,600 |
| Net income before start-up costs | ($64,556) | ($27,535) | $3,180 | $3,306 | $23,197 |
| Net income after start-up costs | ($77,556) | ($27,535) | $3,180 | $3,306 | $23,197 |
| Closing cash | $58,547 | $25,575 | $21,597 | $17,481 | $31,980 |
This case cuts every revenue line by 20% in every year. The response: the market and delivery hand starts in month 29 rather than 17, the second field hand waits until month 41, the harvest hand is never hired, marketing is cut 20%, Marisol takes a 20% pay cut, the farm stays on its original 14 acres and no distributions are paid. On those terms the farm ends every year with cash in the bank, never below $17,481, and is profitable from Year 3, though by less than the base case in every year. Equity ends Year 1 at $42,444, so the bank covenant would be discussed early. Marisol's pay cut works out to roughly $14 an hour, which is not sustainable for long and is the reason the case is a response to one bad stretch. Without the response, the same shortfall would leave the farm with negative cash before the five years are out.
Sources
- USDA National Agricultural Statistics Service, 2022 Census of Agriculture, Oregon county profiles. Could not be opened for this plan; no county figures are quoted.
- Oregon corporate excise tax, 6.6% on the first $1 million of taxable income: Oregon Legislative Revenue Office material on C-corporation brackets. The Oregon Department of Revenue page could not be opened, so the rate may need confirming.
- USDA Farm Service Agency, Microloans. Cited as the alternative to the bank loan; terms and caps change, so confirm with the local FSA office.
- Federal corporate income tax rate of 21%: Internal Revenue Code section 11(b).
- FDA, FSMA Produce Safety Rule. Coverage depends on a farm's sales; confirm with the Oregon Department of Agriculture.
- Oregon Bureau of Labor and Industries, minimum wage. The $18 hourly field wage is the plan's figure; confirm the current minimum and farm overtime rules.
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