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Your guide to starting (and growing) your own farm in Santa Cruz County

“Most farmers don’t go into farming thinking about business, but farming is competitive, and the market tends to be unforgiving. You have to think about farming as a business, or you won’t be successful,” says David Mancera, who grew up in a small farming community in Monterey county and worked in corporate ag financing. A wealth of knowledge, Mancera also advises small/med ag businesses through the Small Business Development Center (SBDC) in Santa Cruz, where farmers can receive free help.

Common questions that farmers bring to their SBDC advisor include

men in field
SBDC Director Brandon Napoli is given a behind-the-scenes tour to understand how a world-class farm operates at JMS Organics.

  • How do I start a business?
  • I want to be an organic certified farmer - where do I start?
  • Who would be willing to loan money to me?
  • I want to sell to a grocery store - do I need a certification?

Mancera says that most farmers struggle with keeping records, creating a budget, and understanding a profit and loss. Most don’t know that they need a CPA, not a bookkeeper or a tax preparer. Licenses, compliance issues, and certifications also come into play.

How does it work?

The SBDC offers highly skilled and dedicated bilingual advisors from every area of business - including agriculture - to assist small businesses for free. When you sign up for an advisor, Mancera or one of his colleagues will first try to understand where you’re at as a farmer and business owner. You may not know what you need, and that’s ok! Once your advisor has a grasp of your situation, they will share advice, give you options, and help you set up methods that will grow your confidence to navigate the system and be a more effective business person. Advisors are local and connected to the region so they understand the market landscape, which will also benefit you.

Longtime SBDC advisor, Danny Braga, a banking specialist with 38 years in the industry, plus decades as a college accounting instructor and co-owner of a small business, points out the volatility in farming.

All it takes to experience an unexpected huge demand or lack of supply is for someone in the health industry to say, ‘Wow, this (insert product) will help you live longer!’”

— Danny Braga, SBDC advisor

Thus, it’s essential to have a plan A and B.

How farmers can think more like business people

people posing
The team of A and A Organics show off their tasty produce that differentiates them.

  1. Get an accounting system: What is your plan if you have more product or way less product than expected? What happens if the prices drop and revenues drop? Put systems into place so that you’ll be ready to show the lender your numbers when you need money.
  2. Purchasing or leasing land: Think about the soil health, the microclimate, the water availability, who are your neighbors, and the suitable crops to grow on that land that can also help with cash flow.
  3. Take classes or get a mentor: Successful farmers have intuitive business sense, take courses, or have a mentor.
  4. Market channel: Which ones interest you? I.e., direct to consumer, wholesale to distributors, or retail.
  5. Prepare for succession: Farming is a physical drain, and at some point, your body won’t want to do it anymore. One way to test out the waters is to say, “This year, I’m going to turn _____ division over to so and so and see how it goes because they might be a good fit to run that aspect of the business.”
man in field
Tony Barcelo of Hydra Point is one of the fastest and largest SBDC clients and has grown into a regional agricultural leader.

About the SBDC

The Santa Cruz Small Business Development Center is part of a 40-year national legacy committed to small business success, and has helped numerous businesses grow and succeed during the past year. As a direct result of the SBDC’s services, Santa Cruz County Businesses reported in 2020:

3,735 jobs supported (created and retained)

37 businesses created

$10.3 million increase in sales

$7 million in loans and equity

The advisors live and breathe in the trends of retail, restaurants, consultants, and services, and beyond. With unparalleled access to no-cost expertise from entrepreneurs who have seen it all, Santa Cruz SBDC provides small businesses with the solutions they seek and the confidence they need to realize their dreams.

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