The agrotourism industry has reached $4,290.62 million in 2022. With urban populations seeking authentic rural experiences, the sector is estimated to grow at a CAGR of 8.09% from 2022 to 2028. Agrotourism offers city slickers a taste of the farming lifestyle.

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As rewarding as the role of farm owner can be, the prospect of pivoting to hospitality can feel daunting for long-time producers. Building this new branch requires strategic planning, investment, and learning the ropes of the tourism industry.

The following guide breaks down everything you need to learn how to start an agrotourism business. Explore how to register an EIN, set up accounting, market your brand, and provide top-notch customer service when opening your farm doors to the public.

1. Conduct Agrotourism Market Research

Jumping into community-supported agriculture requires careful examination of your regional visitor demographics and tourism infrastructure. Market research will help you develop a thorough marketing plan and business plan.

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Start by identifying key visitor segments drawn to agritourism. Data shows the top brackets include families with young kids, baby boomers, and millennial foodies. Geotourism studies reveal that 60% of travelers now seek authentic cultural experiences while vacationing.

When assessing your local area visitor profiles, also consider accessibility from metro hubs and proximity to national parks, wineries, hiking trails, or other complementary activities. Farms strategically located near existing tourism infrastructure and attractions tend to fare better with agritourism (e.g. lavender farms are a highly popular agrotourism choice that you could benefit from).

Next, conduct an inventory of agritourism offerings in your region. Research direct competitors, but also hospitality providers catering to the same target demographics. This could include dude ranches, food tours, cooking classes, harvest festivals, farmers markets, and more.

In particular, look for gaps in accessibility and inclusion. Data shows that 71% of travelers believe it’s important destinations offer accessible options for disabled guests. Consider building this into your market research criteria as you assess area competition.

Consumer surveys can provide additional insight into visitor interests. Reach out to tourism boards, hotels, and tour operators to see if existing local data is available. If not, create a short questionnaire for your informal focus group research.

2. Analyze the Competition

Getting a clear picture of local agritourism businesses establishes key strategic advantages as you build out new offerings. Start by identifying farms in the region providing comparable hospitality and experiential programming. Document their offerings, pricing, property attributes, volumes, and visitor profiles.

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Pay attention to the stories competitors tell through their branding and marketing materials. Note their communication channels, value propositions, and any apparent specialties. Then scrutinize reviews on Google, Yelp, and TripAdvisor to gauge customer satisfaction levels.

Look beyond the farm level to evaluate broader tourism players as well. For example, analyze what sets vineyards, B&Bs, and glamping tents apart if targeting the luxury bracket. For budget-focused families, balance your positioning relative to campgrounds, state parks, music festivals, and seasonal events instead.

Factor in barriers to entry created by complicated regulatory requirements, resident attitudes towards tourism, zoning implications, or other political dynamics specific to agriculture and hospitality. These structural issues influence market competition significantly.

A thorough online presence analysis is essential too. Research how other agritourism providers rank in local Google search results and claim placement on travel review and booking platforms. Study competitor website optimization and functionality.

3. Costs to Start an Agrotourism Business

Launching an agritourism venture requires careful financial planning and the establishment of ample operating capital. Between land preparation, facilities, staffing, and insurance, costs add up quickly. Weigh these major expenditure categories as you craft your budget.

Startup Costs

For existing farms adding agritourism components, dedicate $15,000-$30,000 upfront for any necessary property enhancements. Key investments may include:

• Safety and accessibility-focused projects – $5,000-$10,000
• Bathroom and septic upgrades – $5,000-$15,000
• Paths, signage and parking – $2,000-$5,000
• Barn, cabin, or kitchen remodels – $3,000+

If purchasing or leasing a separate agritourism-specific property, land and construction costs inflate exponentially based on the buildings required. Budget minimum of $50,000 for raw land acquisition alone.

Ongoing Costs

Staff will likely represent your largest ongoing operational expenditure. Determine essential full-time, part-time, and seasonal hiring needs based on projected visitor volumes and service offerings.

At a minimum, plan for:

• 1 dedicated general manager – $45,000-$65,000/year salary
• 5 seasonal agriculture and hospitality workers – $15/hour

This totals nearly $170,000 annually for baseline staffing. Fluctuate up as visitation expands.

Protect yourself and your patrons with ample commercial general liability coverage. Expect to invest $4,000-$8,000 annually at minimum. Review policy terms to ensure adequate coverage for common hospitality mishaps like guest injuries, food-borne illnesses, or property damage.

Allocate 5-15% of total operating costs for marketing strategy efforts like social campaigns, travel trade partnerships, and local tourism advertising. This equates to $10,000-$50,000 annually for small to mid-sized operations.

Additional overheads like bookkeeping, direct sales commissions from online booking platforms, and website hosting tallies between $300-$1000 monthly.

4. Form a Legal Business Entity

When establishing an agritourism operation, you must form a legal structure. There are four main business entities to choose from when starting an agritourism business, including:

Sole proprietorship

Sole proprietorships offer ease of setup but no personal asset protection or special tax considerations. Any lawsuits or debts tied directly to the business become your responsibility. Sole proprietorships are best suited for a single owner or a married couple.

Partnership

Partnerships allow you to share ownership with others, yet still expose owners’ home values, retirement savings, and more to court judgments. Partnerships are a good option for a family business, but still leave your assets vulnerable.

Limited Liability Company (LLC)

Registering an official LLC costs between $50-$500 depending on your state filing fees. It limits legal vulnerability by separating your farm’s financials and obligations from your own. This appeals greatly to lenders if you need to take out loans for additional agritourism development as well.

LLCs also provide tax flexibility not offered by traditional corporations. You can file taxes as a pass-through organization with income and losses reported directly on your returns. This makes an LLC ideal for a working farm and other businesses working with agricultural products.

Corporation

A corporation is the most advanced and protective form of entity to create. While it protects your assets much like an LLC, it is more complex and expensive to form. For a small business, a corporation entity doesn’t usually make sense.

5. Register Your Business For Taxes

With any commercial enterprise, formally registering with state and federal tax authorities ensures full compliance from Day 1 while unlocking key financial perks. An employer identification number (EIN) functions like a Social Security number for your business specifically.

The EIN allows you to open dedicated checking accounts, process payroll, apply for pertinent licenses and permits, build company credit, and complete other administrative functions. The IRS requires all LLCs, corporations, partnerships, and nonprofits to obtain one regardless of staff size.

Sole proprietors without employees can use their personal Social Security number instead. But again, opting for an official EIN better segments personal and professional finances while protecting assets in lawsuits.

The entire application process occurs online through the IRS website and only takes minutes to complete. Simply:

1. Visit IRS.gov and navigate to the EIN Assistant.
2. Answer a short questionnaire about your entity type, ownership structure, and reason for applying.
3. Provide key details about your farm operation and its activities.
4. Obtain EIN immediately upon submitting your details.

You’ll also need to register with your Secretary of State for the collection of state sales tax applied to goods and services sold on-site to visitors. State filing officers then share this data with the IRS too. Filing frequency and thresholds for remittances vary based on location and income levels.

Research specifics based on the structures, products, and experiences outlined in your agritourism offerings. State departments of revenue also typically require tourism businesses to complete separate one-time registrations outlining hospitality activities happening on agricultural land.

6. Setup Your Accounting

Meticulous financial tracking provides the foundation for agritourism success. Investing in organizational accounting habits from the outset shields you from painful IRS audits, penalties, and reporting mishaps down the road.

Accounting Software

User-friendly platforms like QuickBooks simplify otherwise complex accounting processes. Connect your business bank and credit card accounts so transactions automatically download into preset categories. QuickBooks even invoices customers and facilitates payroll should you choose to activate those features.

Hire an Accountant

Supplement with an accountant well-versed in agritourism’s unique tax considerations across hospitality services, farm production activities, and applicable tourism incentives. Expect to invest around $1,000 annually for an advisor to optimize financial tracking accuracy, prepare and file annual tax paperwork, and ensure full regulatory alignment.

Open a Business Bank Account and Credit Card

Opening a dedicated business checking account and credit card also streamlines accounting. Never commingle professional and personal finances. A separate business credit card earns rewards points on necessary farm purchases while keeping expenses easily traceable.

7. Obtain Licenses and Permits

With the flurry of agritourism development nationwide, states race to install regulatory frameworks protecting visitors on private farmlands. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.

Determine if your state or county requires specific agritourism operator licensing above typical business registration. These programs commonly mandate liability insurance minimums, safety protocol training, and community engagement promises before approving a conditional use permit.

For example, Vermont’s Rooms and Meals Tax program categorizes farm stays and tourism activities to collect occupancy surcharges akin to hotels. Beyond validating your legitimate operations, enrollment often makes proprietors eligible for regional promotion assistance and specialty “farm-friendly” highway signs too.

Any meals, snacks, or beverages served on-site require county health department inspections and consumables provider licensing regardless of free or paid status. Again, fees fluctuate but expect $100-$250 annually.

Common forms include Temporary Food Service permits for one-off events or seasonal concessions and Commercial Kitchen registrations for year-round hospitality from a dedicated agritourism kitchen. Inspections verify proper build-outs, appliances, sanitation procedures, and storage.

8. Get Business Insurance

Opening private land to public hospitality exponentially increases liability risk. Business insurance delivers financial protection if a visitor is injured falling off a hayride, develops a foodborne illness during dinner, or otherwise experiences harm on the premises.

Imagine the financial devastation if:

• A child sustains third-degree burns attempting to make s’mores at an unsecured fire pit then sues for $250,000 in medical bills.
• Salmonella sickens a family who purchased cheese samples from your creamery and then reports symptoms to the health department.
• An elderly couple slips on loose gravel and breaks both hips necessitating permanent at-home care costing $75,000 annually.

Now envision paying legal fees and court judgments completely out of pocket. Business insurance defends against and covers what often amounts to millions in liability claims over an agritourism operation’s lifespan.

• General Liability – Covers third-party bodily injury and property damage
• Product Liability – Protects against flaws in food products or farm goods
• Professional Liability – Shields advice given during workshops/classes
• Umbrella – Extra coverage for massive incidents
• Workers Comp – Protects staff injuries/incidents

Obtain quotes through an independent insurance broker. Expect to pay $5000+ depending on your policy stipulations, cover limit preferences, staff size, risk level, and deductible selections. This security blanket facilitates peaceful agritourism development free of catastrophic bankrupting scenarios.

9. Create an Office Space

Carving out administrative space streamlines daily operations and external communications necessary for agritourism excellence. Whether a simple home office or a more elaborate commercial lease, designating real estate for business administration.

Home Office

Converting a spare bedroom or basement corner into a basic desk setup maintains intimate owner oversight while providing workflow privacy. Expect costs of around $2,000 for supplies like a computer, filing cabinets, phone line, and booking management software applicable from any location.

Coworking Space

Nearby WeWork outposts offer move-in ready offices for small business owners seeking professional communal amenities without major financial risk. Open desk rentals start around $350 monthly. Private offices with doors for confidential calls bump to $600 on average.

Retail Office

Properties with customer-facing storefronts like farm stands may warrant customer-facing office nooks on-site allowing sales processing, product pickups, and hospitality service bookings all in one spot. This convenience must be weighed against frequent visitor interruptions and noise that can reduce productivity, however.

10. Source Your Equipment

Outfitting an agritourism operation with the necessary gear to facilitate immersive guest experiences requires strategic spending. Evaluate new purchases against used and rental options to secure exactly what your farm needs cost-effectively.

Buying New

Splurging on shiny new fixtures and supplies guarantees flawless function with warranty support and sometimes financing assistance for costly investments. Key essentials like commercial kitchen equipment, tractor wagon shuttles, ATVs, or professional photography backdrops can run tens of thousands of new but last years.

Buying Used

Scour local classified listings through Facebook Marketplace, Craigslist, and leaflet boards at feed stores for steeply discounted gear in quality shape. Repurposed machinery like apple presses, hand tools, or bird-watching scopes often surfacing second-hand offer great guest programming potential at a fraction of retail prices.

Renting

Hefty investments like commercial bounce houses, professional barbecue rigs, or sound systems for agritourism events make infinitely more financial sense to rent only when needed. Peer-to-peer rental platforms like Fat Llama connect you with special event companies willing to loan specialty items.

Leasing

If cash flow is tight opening year one but essential harvesting equipment or swanky guest cabin materials remain necessary, explore leasing options spreading costs over monthly installments rather than one crushing new buy. This eases cash flow demands substantially.

11. Establish Your Brand Assets

Cultivating a distinct brand personality helps emerging agritourism establishments stand out amid fierce regional competition while aligning offerings with target visitor values for enhanced loyalty. From logos to websites, these visual touchpoints inform consumer impressions.

Getting a Business Phone Number

Toll-free numbers lend legitimacy to bookings and customer service unavailable through personal cell phones. Cloud-based virtual phone services like RingCentral forward calls automatically from one centralized business line and ring endless devices simultaneously for reliable access and professionalism.

Creating a Logo and Brand Assets

Hire a designer to craft custom logo visuals reflecting the heritage, location, or specialty crop of your farm. Brand recognition likely requires keeping the main name but refreshing slogans. User-friendly DIY design platforms like Looka generate loads of polished options

Creating Business Cards and Signage

Business card exchanges establish professional first impressions with regional tourism partners, vendors, and media. High-quality cards like those printed through Vistaprint run about $20 for 250.

Purchasing a Domain Name

Secure exact match domain names like FarmNameAgritourism reflecting the brand through registrars like Namecheap for roughly $15 yearly. If taken, adjust slightly with hyphens or abbreviations as available.

Building a Website

Self-service platforms like Wix facilitate quick DIY websites packing in loads of visual appeal to convey the agritourism vision vibrantly. Or hire an expert web developer through freelance networks like Fiverr starting around $300 to craft a completely custom site architecture showcasing offerings in the best light possible.

12. Join Associations and Groups

Expanding professional networks through local and national associations secures indispensable mentorship and peer support as the complex agritourism industry continues maturing. Tapping collective knowledge around risk management, marketing, and operational efficiency steers new entrants toward profitability faster.

Local Associations

State-level alternative agriculture groups like the California Agritourism Association and regional collectives like the Appalachian Agritourism Association offer troves of niche insights, forums for idea exchanges advocacy assistance, and disaster relief programs. Memberships run $50-$500 annually depending on scale.

Tourism boards also harbor useful training webinars, promotion opportunities on “farm trail” apps like BookingNinjas, and eligibility for placement in roadside visitor center guides.

Local Meetups

In-person conferences and hands-on workshops facilitate more intimate sharing around overcoming recurring stumbling blocks like securing adequate event insurance, perfecting evening bonfire experiences, or licensing on-farm stores legally. Local networks surface through platforms like Meetup.

Facebook Groups

Massive national communities centralized around key activities prove invaluable for troubleshooting and inspiration gathering too. For example, agritourism, Farm Tourism, Heritage, and Eco-Tourism offer searchable idea banks from thousands of proprietors navigating bathroom builds, artisanal cocktail receptions and so much more.

13. How to Market an Agrotourism Business

Spreading the word about your agritourism offerings requires an integrated digital and traditional promotional strategy maximizing local networks and direct visitor engagement. Balance targeted paid platforms with community cultivation for sustained success even amidst seasonal tourism lulls.

Personal Networking

Start close to home. Satisfied visitors become your best brand evangelists when delighted by farm experiences. Entice sharing through discounts on next visits, gift card bonuses, or complimentary take-home merchandise when posting social reviews.

Digital Marketing

Paid platforms efficiently target hyperlocal travelers while optimizing visibility in wider search traffic. Some digital marketing options include:

• Launch Google Ads campaigns geo-fencing nearby metro areas using keywords like “day trip orchard” + city name with ad copy conveying your differentiators.
• Sponsor seasonal event posts within community Facebook Groups already discussing topics like “best pumpkin patches” and list on localized directories like Tripadvisor and Yelp encouraging customer reviews.
• Run Instagram and Facebook ads featuring striking photography boosting conversions.
• Allow self-service online booking through tools like FareHarbor streamlining planning.

Traditional Marketing

Double down on traditional tactics cementing friendly neighborhood ties. Some tips include:

• Distribute simple flyers at local hotels, B&Bs, bars, and farmers markets.
• Schmooze tourism bureaus, guides, and hotels to suggest or highlight offerings in regional “things to do” promotional materials as their trusted country getaway.
• Sponsor booths at busy county fairs or festivals cross-promoting to similar family-based audiences.
• Offer farm tours so farm visitors can see what you’re all about.
• Pitch multi-farm partnership packages to motorcoach companies drawin​g on farm visitors from competing farms.

While digital proves more measurably converting, well-rounded campaigns reminding locals of your presence across channels ensure top-of-mind recall when seeking weekend plans. Delighted past visitors still reign supreme enticing similar friends on each visit.

14. Focus on the Customer

In an increasingly noisy tourism sector, thoughtful customer service emerges as the competitive differentiator. Prioritize memorable care through policies facilitating seamless planning, farm transparency, and individualized attention exceeding expectations.

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Simplify FAQ sections on your website detailing:

• Precise locations
• Average tour times
• Accessibility provisions
• Weather backup protocols

Send email reminders ahead of trips mentioning weather forecasts, packing checklists, and arrival procedures too. On arrival, wow families with complimentary snacks or gifts for the kids. Follow up post-visit with satisfaction surveys and exclusive early access to seasonal activities for the best reviewers.

When issues inevitably arise like allergy miscommunications in the kitchen or bee sting reactions while visiting beekeeping locations around the orchard, respond swiftly and caringly. Offer generous refunds or rainchecks along with the sincerest apologies to turn frustration into future loyalty. Document occurrences privately to amend practices proactively.

Striving relentlessly each day to showcase your farm’s unique warmth, charm, and personality forges bonds reaching far deeper than surface-level amenities alone ever could. Word spreads quickly when finding a countryside escape focused wholly on welcoming strangers like old friends.