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Last updated: Sep. 12, 2018
Whether you’re a seasoned farmer who has outgrown your current operations or you’re thinking of starting a new farm business, it’s important to have a business plan.
Not only a farm business plan help you focus on your goals, it provides the answers you need to make the farming operation run smoothly, and make financing, bookkeeping, and tax preparation easier.
Here are some important things to consider when planning a new farm business.
Research Market Opportunity
For farmers to grow their business they need to understand emerging market opportunities and what it takes to be successful.
That’s why you should do extensive market research, and identify your industry, target audience, and short- and long-term growth stages, before you start a new farm business.
After all, Canada’s agricultural landscape has undergone major changes over the last number of decades.
Globalization, technological advancements, and a shift in consumer demand have forced farmers to adapt to new realities and develop new strategies to maintain successful farm operations.
Accessing Farmland and Startup Capital
People might be drawn to farming because they like the idea of working the land, but before they can do that, they need to have a financial plan.
When it comes right down to it, having access to farmland, financial management, business planning, bookkeeping, and tax preparation, is the backbone of any successful farming business.
To better understand what you need to do when it comes to buying farmland, obtaining money to finance a farm, business planning, and customized tax services, speak to a tax professional that specializes in working with farm operators.
Know about Farm Tax Deductions
If you’re starting a new farm business, you need to have a comprehensive understanding of farm tax deductions.
The Canadian government provides farmers with programs like AgriInvest and AgriStability that help protect their operations from a decrease in income. Farmers can also deduct a large number of tax expenses that other businesses cannot.
For starters, farm operators can deduct all the usual business expenses, this includes business-use-of-home expenses if they use their home for business reasons.
Canadian farmers can also claim farming specific expenses such as:
- Veterinary costs
- Breeding fees
- Fence repairs
- Machinery rentals
- Cost of fertilizers
The list of tax deductions farmers can make is quite extensive.
Not knowing about farm tax deductions, though, could result in you paying a lot more in taxes than necessary. For the best farm business tax tips, talk to a tax professional that understands the unique nature of Canadian farming.
FBC, Helping Canadian Farmers Plan Their Businesses and Increase Their Incomes
Starting up a new farming business in Canada can be rewarding, it also comes with its own unique set of challenges. If you’re thinking of starting a farming business and need help with business planning, bookkeeping, and customized tax services, contact the tax preparation experts at FBC.
FBC has worked exclusively with farm operators, small business owners, independent contractors, and entrepreneurs since 1952. Over the last 66 years, FBC has helped tens of thousands of clients, from coast-to-coast, maximize their deductions and minimize their tax burden.
In addition to providing customized tax services, FBC also offers bookkeeping, tax preparation, business planning, succession planning, financial and estate planning, accounting, risk management, and financial reporting.
For more information on FBC and the services we offer, call us today at 1-800-265-1002 or submit an online form and an FBC tax specialist will contact you at your earliest convenience.