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Agricultural businesses include the production and harvesting of crops such as wheat, cotton and maize as well as the production of livestock such as cattle, sheep and chickens. An agriculture business may include elements from growth to harvesting to processing or may be focused on a particular process such as supplying machinery or raw materials. In order to buy an existing agriculture business you should register for alerts so you are notified when a new business is listed. You can then make contact with the seller and request more information. Usually the seller or broker will ask you to complete an NDA to ensure the confidentiality of the business. Buying an agriculture business requires professional advice during the process to ensure the due diligence is conducted properly.
An agriculture business can require a large investment especially if there is a freehold property, equipment, factories or processing plants involved. Determining if an Agriculture business is a good purchase will depend on a number of factors but is largely based on the profitability of the business. The ability for the business to produce a product will determine if it is a good opportunity, for example if a chicken farm can run 170,000 head of chicken, the buyer will be able to forecast the costs, and potential income, and evaluate whether the business will be a good fit for them.
There are a number of different types of Agricultural farming such as crops, livestock, forestry, and fisheries. In Australia the main crops that are farmed include; wheat, canola, oats, pulses, sorghum and barley. Wheat is Australia’s largest produced crop and is sown in the winter and harvested in spring or summer. The largest states to produce wheat are WA, NSW, SA, VIC and QLD. In terms of fruit and vegetables, Australia grows a lot of fresh produce such as olives, grapes, apples, potatoes etc. In terms of livestock production, Beef is Australia’s largest export and QLD is the largest producer. In Australia, lamb, chicken, pig and fish farming are also popular as well as wool and leather production.
Agricultural businesses usually require a high level of capital due to the costs involved to run the business. Usually there is equipment, machinery, freehold property and stock included in the sale. Experience in farming is going to be advantageous so you have a solid understanding of the farming principles and how to operate the business. With the high price point, there are usually investors who are looking to buy these types of businesses.
The benefit of buying an agriculture or farming business is that you can supply products that are a prime necessity for most people. Supply and demand are a big element of this industry. Farmers may be supplying products within Australia or be exporting to overseas markets. According to farmweekly, In 2019 Australia was the world's most valuable beef exporter, we exported 70% of our beef generating a total of A$10.8 billion in exports.
There are alot of elements that go into valuing an Agricultural businesses as they may possess freehold property, machinery, equipment, stock, leases etc. Most businesses are appraised based on a multiple of the net profit to the owner with some market predictions. It's important to seek professional advice when buying a business so you can conduct proper due diligence. It’s important to note that an appraisal is an estimation of what the business could sell for in the current market, whilst a valuation is conducted by a licensed business valuer.
The main source of income is selling the product that has been produced such as wheat or cattle. The farm may also sell other items that are necessary for farming such as breeding stock, reproduction services, fertilizer, used machinery or leasing land. The farm may also have additional income streams from selling products that have been made from the raw material such as olive oil, wine, apple sauce etc.
The best way to keep track of new business opportunities is to save your search result. You will be notified as soon as a new agriculture or farming Business is listed for sale.
Selling an agriculture or farming business requires a lot of preparation. There may be machinery, livestock, crops or freehold property that will need to be evaluated and included in the sale. Having a solid exit strategy will mean your farm is ready for sale and has a greater chance of achieving an optimum price. Business brokers are licensed professionals who can assist with the sale of your business and market it on websites such as Bsale. Check out the Find a Business Broker section to locate a suitable broker for your business. Bsale also offers advertising direct to business owners.