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How to Start a Farmers Market

Farmers Market Business

Do you want to start a farmers market? If YES, here is a detailed guide on how to start a farmers market business with no money and no experience plus a sample farmers market business plan template.

People always think that public markets are almost as old as history or may no longer be as profitable as they used to be. But what they don’t know is that all over the world, you will find flourishing marketplaces which are centuries old and vestiges of former ways of doing business.

What is a Farmers Market?

A farmers market is simply a place where farmers come together to sell produce directly to consumers, usually off the back of their trucks. Things sold in these markets include fish, meat and dairy products as well as fresh fruits and vegetables. It may also include wholesale trade, allowing produce brokers to sell, while others are exclusively for local growers.

These are markets that provide space for craftspeople, and some also operate like a flea market. In the united states, several well-established farmers markets are fully or partially enclosed, but most are outside. It is very important for you to understand that Farmers Markets, new or old, serve many functions.

We all know that it is a place for business and trade while at the same time it fosters social gathering and community activity. Experts believe that the festive atmosphere provides a relaxing and even entertaining place to shop and meet with friends.

Steps to Starting a Farmers Market Business

1. Understand the Industry

The market that businesses in this industry provide are used by farmers worldwide to directly sell their produce to consumers, but as food production in the U.S. became industrialized, they were replaced by brokers and supermarkets. But farmers markets have been doing great in regaining their popularity in the past two decades.

The benefits of a farmers market to the farmer include the opportunity to sell directly to their clients instead of going through a middleman who charges higher retail prices for the produce. Without this opportunity, the existence of small and medium sized growers would be affected.

Also this place is another way for new growers to learn what customers want and perfect their production skills. A lot of growers enjoy being at farmers markets because of the interaction with the customers and other vendors. We believe there are also many benefits for the buyer who not only buys fresh produce, but talks to the growers about how the produce was grown and prepared.

Just in 2004, reports have it that there were 3,100 farmers markets in the United States, a 79% increase over 1994. Retail sales of produce from farmers markets were $888 million. This represents 93% of total sales at farmers markets.

We believe that one of the reasons for this increase is that a lot of people care about where their food comes from. Farmers markets had an average of 2,542 customers, up from 787 in 1996. Fifty-seven markets had an increase of customers while 14 percent had a decrease in customers.

Note that reasons for this increase include the notion that markets are popping up within all communities. Sixty-seven percent of customers live less than 10 miles from a farmers market while 19% were 11 to 20 miles away, 8% were 21 to 50 miles away, and 5% live more than 50 miles away from a farmers market.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

Those who are in need of the produce from farmers markets include mothers, fathers and children, young and old. In fact the farmers market is indispensable because everyone needs one thing or the other from the market.

3. Decide Which Niche to Concentrate On

If you are trying to start or run a farmers market, it is easy to get distracted by all the possibilities of signage, events and promotions.

Before you order your banners though, make sure you have mastered the basics. Each step should set the foundation for the next to make sure things unfold as planned. First you need to choose what will be sold in your market. They may include foodstuffs, crafts, beverages etc.

What you choose or the vendors you choose will serve as your business niche. It is very possible to have your market sell crafts and foodstuffs, but note that for proper understanding and channeling of resources, you need to have a definite target market and you must know how best to reach them.

The Level of Competition in the Industry

A farmers’ market is a platform that allow growers to sell directly to consumers at a given location and time. This marketing method has grown in popularity.

We believe that the USDA’s Agricultural Marketing Service started tracking farmers’ markets in 1994; the number of markets in the United States has grown from 1,755 to 8,144 in 2013, an increase of about 4 percent from the previous year.

The states with the most farmers’ markets include California (759), New York (637), Illinois (336), Michigan (331) and Ohio (300).

Total annual sales at U.S. farmers’ markets are estimated at $1 billion. Have it in mind that a lot of farmers’ markets are managed on a seasonal basis, opening in the spring and closing in the fall. There are year-round markets and they are generally found on the West Coast, southeast and southwest United States.

For anyone to be able to patronize these markets, there have to be a grower or vendor and there should pay a fee or offer a percentage of sales for booth space. Note that the market has a manager that coordinates vendors and promotes the market.

The market is held in a public location such as a town square or downtown street on a weekly basis. Some markets are open in the morning and others are open in late afternoon. These markets allow growers the opportunity to market directly to consumers without dealing with a food broker. Growers can explain how the food is grown and educate consumers on how to prepare it.

In this place, consumers have a chance to put a “face” on who is growing the product, which they do not necessarily get from traditional retail food outlets. This form of direct marketing is also regarded as agritourism. They also have the chance to purchase products that originate locally and are promoted as being “fresh.”

4. Know Your Major Competitors in the Industry

  • Fresh Food Right At Your Fingertips.
  • Farmers’ Market, Los Angeles.
  • Union Square Greenmarket, New York.
  • Pike Place Market, Seattle.
  • Charleston Farmers’ Market, Charleston.
  • Copley Square Farmers’ Market, Boston.
  • Portland Farmers’ Market, Portland State University.
  • Eastern Market, Washington D.C.
Economic Analysis

The rising popularity of farmers markets is not only with consumers and farmers, but with individuals who want to start their own businesses. We believe that these places aid people start or expand their business through an environment that includes relatively low start-up costs.

They also help encourage a lot of food lovers to establish a customer base and test-market new food products. They also help owners to hone their sales and display skills while finding out what attracts customers. Note that these places are crucial in the food system because they provide a market for farmers and customers to buy and sell fresh fruits and vegetables.

Reports have it that seventy-nine percent (79%) of farmers have sales of less than $10,000 and 31% of farmers use the farmers market as their only way of marketing products. It simply means that farmers markets are an important market outlet for small to medium size farms in the United States.

Farmers markets are appearing in big cities and small towns. Reports also have it that the number of farmers markets almost doubled in the last decade from 1,755 in 1994 to 6,238 in 2015. You should know that this popularity is because consumers are being less accepting of bland meat and produce from factory farms.

Individuals are asking for fresher and locally grown products. There is also more attention being placed on health and the environment with respect to antibiotics and pesticide use.

We believe that if the price of products grown locally were the same as products grown far away, consumers would more likely buy locally grown products. Although locally grown products cost more, more people are buying them because they consider them to be healthier and tasteful.

Even though farmers markets once fell out of favour with the consumer because the supermarket offered more convenience, they are now making a comeback. Despite convenience, consumers are growing tired of products that are bland and have been sitting somewhere for several days.

5. Decide Whether to Buy a Franchise or Start from Scratch

It is very important for you not to relegate your ideas to just starting a business from the scratch, when nowadays even farmers markets have franchises all over the United States. It is important to note that different individuals are motivated by different factors.

If your long term plan is to establish a Farmers Market that you hope to control, a business brand that you hope to one day transfer ownership to your children and perhaps also sell franchise in future, then starting from the scratch is the best advice for you.

But if you are only interested in making money and multiplying your wealth, then we advise that you buy a franchise and leverage on the already established name and business model it offers.

6. Know the Possible Threats and Challenges You Will Face

This business is very critical and it takes careful planning to be able to succeed. This industry has so many obstacles and challenges. They may include;

  • Industry regimentation like season and time
  • Developing the Vision and Business plan
  • Raising Capital for your Farmer’s market business
  • Finding Good Customers and Vendors
  • Dealing with Competition
  • Unforeseen Business Challenges and Expenses
  • Keeping Up With Industrial Changes and Trend

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

Every community needs a farmers market, so why not start one in your community? The business is very straightforward to start and operate. If you look to start solely then you can look at the sole proprietorship business.

Though you should have it in mind that you will basically be dealing with human relations, which is why you should understand that the legal entity you choose will go a long way to determine how comfortable your vendors and investors will feel.

Insurance coverage is not the only reason to incorporate. In this business, incorporating also relieves the directors of the farmers market from legal and financial liability for the market as a whole. Some cities require incorporation to conduct business publicly.

8. Choose a Catchy Business Name

  • Court zone
  • Disneyland Farmers markets
  • Royal kitchen market
  • High flyers market
  • Elevation Marketers
  • Mandy Market Houses
  • Crazy Marketers
  • Enchanted Farmers market
  • Flower Farmers markets
  • Icy Farmers markets
  • Inflate goods
  • Jones Marketers
  • Economic Farmers markets
  • Magical Castle Marketers
  • Vision House craft market
  • Safe Farmers markets
  • High Sports

9. Discuss with an Agent to Know the Best Insurance Policies for You

Like we all know, farmers markets typically include a variety of vendors who run booths in a single, centralized location. So note that in this business, you will want to consider purchasing insurance coverage that protects your business interests in the event of disaster.

If you think you don’t need insurance, you have to reconsider because both the vendor and the business entity running the farmers market as a whole can be named in a liability lawsuit, and each will need to be covered by commercial insurance in order to be protected.

We believe that the most important thing is that you understand what is and what is not already covered by existing policies and that you get appropriate coverage to protect yourself against any exposures you may have. An independent insurance agent can help you make these determinations. These are some insurance policies you may need to acquire;

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

No intellectual property is needed here.

11. Get the Necessary Professional Certification

Before you venture into this unique business, you should understand that this industry is one of the industries that is highly regulated so as to prevent costly breaches as it relates to persons and their products. So if you are so keen on doing this business, we suggest you should acquire some necessary qualifications that is needed to ensure that you remain tops in whatever you do.

It is important to state that the Farmers market business has no defined certification, but working with a group makes the planning and initial leg work easier and more effective. Farmers, local businesses, banks, and special community groups are often important components of an organizing committee.

Find people who really want to help. They will differ from market to market, and you will have to decide whom to involve and at what stage in the planning process. The following organizations can be very helpful:

  • The Chamber of Commerce
  • Churches or Church Organizations
  • Conservation Commissions
  • Community Development Corporations
  • Grower Associations
  • Farm Bureau: state and county offices
  • Planning Offices
  • Garden Clubs, Horticultural Societies
  • Neighbourhood Centres
  • Senior Citizen Organizations
  • Farmers Market organizations in your state or region
  • Cooperative Extension Service: county, state or university offices
  • State Government: Department of Agriculture, Division of Markets, Community or Economic Development Office

12. Get the Necessary Legal Documents You Need to Operate

  • Security Clearance Certificate
  • Business License
  • Business Plan
  • Article of incorporation
  • Operating Agreement
  • Operating Agreement for LLCs
  • Insurance Policy

13. Raise the Needed Startup Capital

Markets have been successfully started with as little as $2,000 and as much as $150,000. It will be up to you to determine how much you will need to get a market up and running. It is important to remember that a certified farmers market is not a profit making enterprise.

It may take several years for a market to just break even. You do not need so many resources to start your Farmers market on a small scale, but if you are trying to come in hard and huge, you will surely have to raise the required startup capital to launch it.

First and foremost, when looking to secure funds, you should write a well detailed business plan. Remember, if you have got a good and well detailed business plan in place, it will make your quest easier. Outlined below are the few ways to raise funds for your Farmers market business;

14. Choose a Suitable Location for your Business

The selection of a suitable site for the market is very important. Do not choose a site just because it is the site preferred by your strongest supporter.

Try to choose a location that is visible, attractive, close to public transportation, near convenient parking, large enough for the market to grow, separated from vehicular traffic, and near publicly accessible restrooms. If you want to start from home, fine. Be sure that your home can easily be accessed by all.

15. Hire Employees for your Technical and Manpower Needs

You should know there are many aspects of market management which will have to be accomplished. To keep things simple, let us assume that you have decided to hire a Market Master. Note that the main things for the Market Master to attend to are: recruiting farmers, promotion and advertising, and day-to-day operation.

Daily operation includes pricing, space allocation, and if your market is purely a retail market for fresh, local farm products, ensure that only those are sold. Since disputes are likely to arise, set up an independent appeal committee before the market opens. This committee could be composed of vendors, directors and the Market Master.

  • Getting Farmers

Indeed to have a farmers market you have to have farmers. If no farmers are already in your midst, notify them several months before opening day. Farmers plan their markets when they order seeds. This is why market research should help you identify potential vendors.

Get in touch with them and find out if they will come. If you are having trouble locating farmers, contact your state or county Cooperative Extension Service, Farm Bureau or Department of Agriculture.

This is the reason why we advise that getting in touch with agricultural groups and advertising through newsletters are effective ways to encourage growers to participate in your market. However, the best way is personal contact with the farmers themselves. Find out names of likely vendors and call them up. If there are other farmers markets, talk to the farmers there.

If not, visit local roadside stands or Pick-Your-Own operations and talk with them at home. Perhaps they would like to try a new direct market. Word of mouth is the best publicity. We also believe that consumers like markets which offer variety; they like to have plenty to choose from.

Therefore, try to set it up so that you have a core nucleus of at least three farmers who can supply adequate diversity from the outset, as well as other farmers with smaller supplies. Try to make sure your market is competitive from the start. This will prevent territorial problems in years to come.

  • Market Pricing

We believe there are two main issues to consider with pricing: making sure it is adequate for farmers to make a profit, and making sure it is fair. Fairness is something the Market Master can monitor. Profitability is more difficult. Even if farmers think they are covering costs, make sure they evaluate all their expenses and price accordingly.

A lot of farmers use the four-time multiple rule to arrive at their prices. Using this formula, 1/4 of the price covers production costs; 1/4 packaging and transportation; 1/4 selling and advertising, including hiring extra help on market day, giving away free samples, and waste; and the final 1/4 is profit. Because of the laws of the competitive market, farmers may not be able to apply this rule to each product they sell.

16. Write a Marketing Plan Packed with ideas & Strategies

We believe there are a lot of ways to attract people to your market. Note that some of them are free, while others are expensive. You will have to gauge your budget for publicity based on parameters of your total budget. Although promotion is very important, it can be done effectively at a fairly low cost.

It is especially helpful to have access to reduced rate Xeroxing or to have a volunteer with graphics skills help you out. It is important to note that sometimes the best advertising is free advertising. A feature story in your local newspaper will be far more effective than ads. Television coverage attracts a lot of attention, but you must seek this type of publicity out.

You will only get coverage if there is a news story. Think of creative ways to interest the press. Also note that you might want to plan a gala Grand Opening celebration and invite the individuals in your community. If you invite the media, make sure there will be plenty of activity when they come.

If you are not certain you will have a large turnout of farmers and shoppers on your first market day, plan such an event for the second or third market. Finally, you may also try Public Service Announcements on local television or radio stations. PSAs are free and can reach large audiences.

Have it in mind that you cannot count on free press coverage; there are other inexpensive ways to promote your market. For example, if your local newspaper has a community calendar, put in a notice of opening day. Posters, fliers, balloons and bumper stickers are also effective.

Also know that there are more expensive techniques which you may want to invest in. Bright, colourful banners call attention to the marketplace. People often notice a farmers market for the first time when they see a banner. A lot of markets use more than one so they can be displayed at several key visual locations to draw consumers in.

Newspaper ads are frequently used to publicize markets. If you choose to advertise this way, remember it is most effective when done consistently. Placing weekly ads may be expensive, so choose a paper with circulation to your target consumer groups.

Note that communication research has shown that the more times people hear or see a message, the more effective it will be.

17. Develop Iron-clad Competitive Strategies to Help You Win

Indeed you will find it hard competing as a new entrant in the Farmers market business especially in a highly organized market like that of the United States of America, which is why you must be deliberate in choosing your board members and your core marketing team.

Note that if you have the required expertise and equipment to carry out a business, you are likely not going to struggle to compete in the industry.

This is why you need to put in your best whenever you have the opportunity to handle any rental contract. You should be known for delivering excellent services at all times. We believe this will boost your image and make your company renowned in the competitive farmers market industry.

18. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps to attract new customers is to satisfy your customers always.

If your customers are satisfied with your services delivery, they can hardly source for alternative service providers or products. One of the major reasons why customers source for alternative service providers or products is when there is a drop in quality. Another reason is poor customer service.

If you can continue to improve on the quality of your service and your customer service delivery, then you won’t struggle to maintain your loyal customers. Note that it is your job to make sure that your vendors treat their customers well. You have to also make them the bedrock of your marketing and advertising plans.

19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Just as customers are looking for a good selection of fresh local produce, potential vendors are also looking for a constant flow of customers during market hours. You must convince producers that selling through your farmers market will offer them a greater opportunity than other forms of marketing.

We believe that once the vendor is convinced that a farmers market is the right place to sell their products, you must persuade them to choose your market.