Outlay Costs for an Agriculture Business in South Carolina
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This article was updated on 10/09/23.
Agriculture is a wild and varied business, with most of the spoils now going to those that are wise enough to focus on economic feasibility over nostalgia for a time long since passed. When it comes to agriculture businesses in South Carolina, it's critical to look at all outlay costs involved with starting your own operation.
Where should you begin? Land. The truth is livestock and poultry are some of the remaining farming businesses that are still economically viable. In fact, broilers are one of the top agricultural commodities in South Carolina today!
Deciding on Your Agriculture Business
When you have a piece of land that has potential, you can begin looking closer at the type of agriculture business (often referred to as "agribusiness" for short) you want to build. Are you more intrigued by livestock than crops? Following that path on land suitable for livestock can be a great investment.
Even if you're looking at crops and poultry, there are still avenues for profit. Yet every goal has the same beginning: land. Do you know how much land you want to purchase? Agribusiness tends to require more land than most start-up business owners expect.
If you are serious about building an agriculture business from the ground up properly, surrounding yourself with people who have already accomplished this goal as well as looking for land for sale in South Carolina are great ideas.
What Are Outlay Costs?
Outlay costs are every expense you incur in the process of obtaining an asset, such as when you explore land for sale in South Carolina. It sounds straightforward, but it is possible to leave a few outlay costs out of the calculations when looking at land purchases.
Looking at the outlay costs is critical in terms of your potential agribusiness. Land for sale in South Carolina is plentiful, but that doesn't mean that it's the right land for your needs.
Missing the full picture of expenses throws off your other business analysis. If you don't know what your expenses will be to open the operation, how can you determine whether the land itself is a great purchase? How can you examine whether bringing in the talent necessary to run the operation will be difficult? All outlay costs are interconnected.
Outlay Cost Examples
Outlay costs are plentiful when setting up an agricultural business in South Carolina. Buying land for sale means also thinking about those outlay costs carefully, as you'll have to pay multiple vendors to get a business up and running.
One example of outlay costs is the cost to insure the land and business after purchase. Insurance goes a long way in protecting you from defined hazards of operating a business, but it goes overlooked as other purchases become more important.
Another example of outlay costs is getting a professional survey of the land completed. Contracting time for a land surveyor is an example of an outlay cost. There are multiple situations where having your own land surveyor is critical, such as when there is the potential for disputes on land boundaries.
Examining Outlay Costs as an Investor
When we take the time to examine the outlay costs of land for sale in South Carolina as investors, we set ourselves up for success. Far too often, a great investment turns into a disaster because costs were not properly outlined. Investors may see the promise of success down the road and decide to take the risk without gathering all the information.
It's important to realize that gathering information on outlay costs doesn't mean that it's a guarantee that your farm will take off. Unfortunately, there are failed agribusinesses all the time, not just in South Carolina. A farm that fails to yield profits has to be liquidated and sold for as much money as possible. It is a difficult position for investors, and avoiding it requires extensive research.
While land for sale in South Carolina pops up often, it can feel like you need to rush through the process to have a working business. This is the worst mistake that you can make. When there's pressure to decide, the wrong decision often appears. Agribusinesses are not small investments, so take the time to make your upcoming purchase carefully.
The State of Agriculture in South Carolina
Agribusiness is intense but incredibly rewarding. After all, very few businesses can boast a direct impact on not just the economy, but people as well. If you're serious about your plans to start an agriculture business by buying land for sale in South Carolina, here are a few points regarding the state of agriculture in South Carolina:
- 2020 was a record-breaking year for corn yields in South Carolina: 132 bushels per acre, with 400,000 total acres planted.
- Soybeans did incredibly well, with 35 bushels per acre and 310,000 total acres planted.
- 190,000 acres of cotton lined the fields of South Carolina, with a yield of 778 pounds per acre.
These are incredible numbers for corn and soybeans, with cotton yields also a point worth examining. The future of agriculture in South Carolina is bright, with more rain in the area supporting higher crop yields.
Outlay Costs for an Agriculture Business in South Carolina
To get serious about your dreams of opening an agriculture business in South Carolina, it is important to outline all outlay costs. There are plenty of outlay costs to account for in your analysis, but here are a few data points to consider as priorities:
- The price of the farm equipment (tractors, tillers, etc.);
- Price of livestock and/or poultry;
- The price of all buildings erected on the property (sheds, workshops, etc.);
- Irrigation systems;
- Trucks to transport produce and livestock;
- Trailers to help carry oversized items; and
- Labor to help work on tasks around the farm.
This is a business that does require high upfront costs but allows a strong return on investment. The agriculture business is a strong asset in its own right, and building an exit plan is not difficult. You must look at this list as a starting point as you are doing your research.
The more costs you outline and prepare for, the more likely you will have the right information to examine land for sale and build a great investment.
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