2.1 Analyse your project idea

First of all, it is necessary to have a business idea around which to build a development project. This means that even before starting out, it is useful to have a clear idea of the type of entrepreneur one intends to become. Whether one chooses the path of the ‘traditional’ agricultural entrepreneur, specialising in production in a specific sector, or that of the ‘multifunctional and multi-active’ agricultural entrepreneur, one will encounter quite different opportunities and regulatory scenarios. Moreover, by having a precise business idea, it is possible to assess in advance all the possible strategic levers to activate: innovation, direct sales, networks, territory, quality, agro-energy, agritourism, educational farm, etc.

A business idea, however seemingly successful, must always be accompanied, before, after or during its elaboration, by an analysis of the market and competition. With the support of appropriate consultants, it is, therefore, advisable to analyse:

• Human capital (professional skills, which management model, which legal form).
• Physical capital (company size, real estate available and to be acquired, machines and tools).
• Offer (critical mass, product and activity differentiation, quality, diversification).
• Markets (possible sales channels, promotional activities).
• Economic performance (profitability and costs).

It is also equally appropriate to evaluate components external to the company on the level:

• Institutional (reference legislation, existence of formalised networks such as consortia, cooperatives, wine routes, etc.).
• Territorial (material and immaterial infrastructural endowment, availability of services to agricultural enterprises).
• Commercial (local distribution channels, characteristics of supply and demand).
• Competitive: structure of competition and degree of concentration of supply.

After the analysis phase and the elaboration of the business idea, the actual planning begins. Once the objectives to be achieved and the expected results have been defined, it is necessary to identify the resources to be used and the strategies to be implemented.

2.2 Business plan and funds research

The first practical step towards the realisation of your agricultural enterprise is the drafting of the Business Plan, which can lend credibility to the project and enable the application for public or private funding. The plan should analyse the starting situation, the development project and the post-investment situation. Once the economic and financial plan has been drawn up, one can proceed to search for sources of financing, which vary from country to country, and often, as in the Italian case, from region to region. The European Commission makes several programmes available for the development of the ‘second pillar’ of the Common Agricultural Policy (CAP). EU countries implement EAFRD funding through rural development programmes (RDPs). RDPs are co-financed by national budgets and can be prepared on a national or regional basis. While the European Commission approves and oversees the RDPs, decisions on project selection and the granting of payments are made by the managing authorities at the national or regional level.

For specific information on what kind of funds you can receive, facilities for young people under 30, etc., we, therefore, advise you to visit the dedicated website, where you will find all the information you need.

2.3 Basic requirements for opening your own business

Once the project has been approved, whether with or without subsidies and funding, whether it is a business built from scratch or a renovation of something already started, the following must be taken into consideration.

Anyone wishing to start an independent business as a farmer must have significant experience in the sector. However, the basic requirements may differ from one country to another, so it is necessary to inquire beforehand. The bureaucratic procedure for opening a farm coincides with the path to be followed for starting any self-employed activity, opening a VAT position, registering with professional bodies, opening a job position, etc.

In addition, if the intention is to combine agricultural production with retail, food processing and packaging, or catering and agritourism activities, it becomes necessary to obtain authorisation by attending a HACCP course on food hygiene, food processing and preservation, with the relevant examination and certificate. Like any other activity, it is necessary to keep account books, preferably with the help of an accountant, as well as to note the techniques, cultivation treatments and traceability of the various products , the register where everything concerning cultivation, from sowing to harvesting, is recorded. If the intention is to operate as a company or as a cooperative, it will also be necessary to bear the cost of officially constituting it, at a notary’s office, with the associated stamp duties, licences and permits.

With regard to organic farming, it is necessary to obtain specific certifications and to submit the company to an annual inspection by the bodies that verify and prove the total absence of chemicals and the use of exclusively natural methods.

2.4 Cost of implementation

The cost of opening and running a farm is rather difficult to determine, as there are many variables that condition the outcome, from the size of the land to the cultivation techniques. It is very important, since it is a very complex activity, that yours is a precise business plan, taking into account each different element. If the business is also partly livestock farming, you will need to take into account the expenses for the purchase of animals, specific foodstuffs and veterinary care.

An alternative would be to take over a business that has already been established and started up, making sure, of course, that it is modern, up-to-date and equipped with everything necessary. Otherwise, the purchase of all the equipment needed to run the business must be calculated, with the addition of the costs of buying or renting the land and buildings and, if necessary, the construction of a food-packing workshop, a room for direct sales, and the purchase not only of agricultural equipment but also of a van or other suitable means of transport. In the case of deciding to open an agritourism business, the start-up phase becomes more complex, as it is necessary to equip the structure so that it is suitable for receiving guests, both in terms of hygiene and the level of comfort, and to set up a kitchen and dining room.

Whatever the nature of your business, it is still necessary to open utilities for the supply of water, electricity and gas. Considering that a farm has land exposed to the sun, it may be interesting to consider installing a photovoltaic system, which would provide at least part of the hot water and electricity supply. In addition to the normal running of any farm, heating, electricity, water, waste disposal and the purchase of raw materials, the costs of routine maintenance of buildings and machinery, fuel, veterinary advice, the accountant and employees’ salaries must be calculated. It is also important to set aside a figure for a marketing and advertising campaign for the business, especially if retail, catering or agro-tourism services are included.

A useful suggestion may be to start with a small business, and then expand it once it is up and running, considering the results and progress of the work. With a not too large plot of land, used farm machinery and a few products, it is possible to keep costs down and later expand the volume of business.