Is Starting an Agritourism Business Right for Your Farm?

Agriculture tourism, or agritourism, involves any kind of agricultural activity that brings members of the public to the farm or ranch for education, recreation or retail. It’s a way that people in the agriculture industry can diversify their revenue stream, connect with the community, and spread awareness about agriculture broadly and their business specifically. Sounds great, right? As you consider if starting an agritourism business is right for your ag operation, here are some things to keep in mind.

Types of Agritourism

There are a variety of agritourism farm activities. The right fit for you depends in part on your community, your land and buildings, and your capacity to invest time and money. Examples of agritourism ideas include:

• Fishing
• Hunting
• Horseback riding
• Farm tours
• Cooking classes
• Wine tasting
• Harvest festivals
• Barn dances
• Market goods
• Farm stays
• U-pick operations
• Christmas tree farms
• Corn mazes
• Sleigh rides
• UTV rides
• Nursery tours
• Exotic animal farms
• Dog training

Some of the top agritourism enterprises bring in large groups of people for specific events or seasonal celebrations. They not only show people what they do but also allow people to get hands-on with some aspect of the agricultural business (such as helping with a cattle drive, learning to milk a cow or picking apples).

Pros

The main appeal of adding agritourism to your ag operation is increasing revenue (or at least your potential for revenue). You are also adding a different revenue stream, which helps reduce risk to your business. For example, if you rely primarily on row crops that are hit hard by a drought over the summer, your revenue from a corn maze won’t be impacted by that drought. Adding an agritourism opportunity can also increase your main revenue source. For instance, bringing people in for cooking classes can help you sell more meat to those customers when they visit your farm.

An agritourism business also has the capacity to benefit your community. Employment opportunities and out-of-town visitors can have a positive economic impact on your local economy.

Adding an agritourism business can also benefit the natural world. Some agritourism activities, such as fishing, hunting and birdwatching, rely on a healthy environment for wildlife. That requires actively managing the land and making choices to benefit wildlife.

Cons

A potentially significant struggle for an agritourism business is managing the visitors who come onto the property — and the liability associated with the large number of guests. You’ll want to ensure that not only is your agritourism business adequately covered, but also that your primary ag business is protected.

Starting a new venture always includes some risk. There is a chance that the agritourism business will struggle and maybe even fail. You could lose some or all of the money you invested to get it off the ground.

Running a business can be demanding — there is a possibility that your agritourism business can pull time and resources away from your core ag business. You may feel stretched thin and unable to meet all the needs of both businesses in addition to the commitments in your personal life.

What to Consider

The first question to ask yourself is “what do I want to accomplish?” Having a defined set of goals is the foundation of your agritourism business plan.

The second question is “can I make this happen?” The answer to this is more nuanced and requires significantly more thought and research than defining your goals. Consider conducting a SWOT analysis.

• Strengths: What do you have that can make you successful? This could be knowledge of local plants, a recipe book of tried-and-true favorites, beautiful land or any number of other positive traits.

• Weaknesses: What do you lack that can keep you from reaching your goals? For example, your location could be too far away from other amenities to attract visitors, or you have too many other monetary commitments or inadequate facilities to host large groups of people.
• Opportunities: What external factors can help you succeed? Perhaps your town has an annual harvest festival that draws crowds, and a barn dance at your property could tap into that audience. Maybe the local middle school has a focus on agriculture and can organize field trips to your operation.
• Threats: What external factors can hurt your business venture? For example, a lack of snow could derail your plans for sleigh rides, competitors could pose a challenge or increasing supply costs could make turning a profit on cooking classes difficult.

Lastly, consider the investments you’d need to make. How much money can you allocate to this business to get it started? Is that enough? Will you be in a tough financial position if you never turn a profit? How much time can you invest? Will that be enough to keep the business going? Make sure you are realistic with yourself in determining if you should move forward at this point in time. Remember, your idea could be a good one but if the timing isn’t right, it may be better to keep working on your plans and jump in at a later date. 

Once the decision is made, you’ll need to begin working on a business plan and getting all your ducks in a row, including taking a variety of legal and liability actions. A meeting with a Farm Bureau Financial Services agent or financial advisor can help you get off to a strong start.