STARTING A MARKET: The Bare Minimum
If you are thinking about starting a new farmers market, here are 3 main questions to consider and 4 main support organizations to get you on the right track.
1. What is the demand for a new farmers market? Your farmers have choices about where to sell their product that include other farmers markets, their own farm, and other outlets. And your market customers have other choices from where to buy local produce. Do you have interest from at least 3-5 core vendors who want to sell at a new farmers market? You will want to have at least that many (and ideally more than that) for a viable market. To dive deeper into these questions, take a moment to look at this Farmers Market Feasibility Guide from the Michigan Farmers Market Association that will help you explore whether you should start a new market. Contents include:
Why, Who, What, Where and When
Considering other Nearby Farmers Markets
Assessing Your Community
2. What is the purpose for the market?
3. What is your plan for running the market?
Who will do the work associated with the market like calling a meeting, making sure the trash is picked up, and other basic market activities? You need to have at least one vendor, volunteer, or community partner that will raise their hand for each activity so that the bulk of the work doesn’t land on one person’s shoulders or not get done at all. Here are a few resources to help you think through what is involved with running a market so you can create a basic operations plan.
- The Kentucky Department of Agriculture Farmers Markets Program is a state government office that assists farmers in direct marketing of farm products through farmers’ markets. The 2020-21 Kentucky Department of Agriculture (KDA) Farmers Market Manual serves as a comprehensive resource for Kentucky farmers’ market managers and vendors and is the manual you need to start your farmers market in Kentucky. All stake holders should be familiar with the rules and regulations that govern a farmers market to assure that you start off in compliance with Kentucky law. A partnership of the Kentucky Department of Agriculture, the Kentucky Department for Public Health, and the University of Kentucky College of Agriculture, Food and Environment, the manual contains valuable guidelines and recommendations on Produce Best Practices, establishing market rules, displays, marketing, organic certification, and every other aspect of operating a successful farmers’ market.
- Farmers Market Training Manual. Although created specifically for market managers in New York, this comprehensive training resource from the Farmers Market Federation of New York details all the activities that are need to effectively run a market.
- Starting a New Farmers Market. This detailed guide from the University of California Small Farm Center is packed with information about how to start and operate a farmers market.
- Community Farm Alliance (CFA) Farmers Market Support Program (FMSP): CFA is a non-profit that serves small family farmers in Kentucky. The FMSP connects Kentucky Farmers’ Markets with the tools, resources and network development that enables them to provide a profitable market outlet for farmers, access to fresh food to all members of the community, a path to sustainability, and the creation of a grassroots base for public policy that supports local food system development.
- University of Kentucky Cooperative Extension Offices. Each Kentucky County has an office that is supported by the University of Kentucky Agriculture Department and is staffed with agents skilled in farmers market support for your area. Click the link to locate your county’s office.
- Kentucky Center for Agriculture & Rural Development (KCARD): is a non-profit organization established to facilitate agricultural and rural business development in Kentucky. They provide educational opportunities, technical assistance, and business support services to new and existing agribusinesses including farmers market
- Washington State Farmers Market Management Toolkit: Although this toolkit is specific for Washington State, it has many tools, tips, and templates to help build any farmers market organization.
STARTING A MARKET: Creating a Firm Foundation
Markets often start up as a group of friendly farmers and, as they grow with new farmers joining, they are at risk of falling apart because the group doesn’t have a common agreement of who they are, who makes decisions, and how they are made. By going through the hard work of writing a mission statement, picking a business structure, and hashing out a business plan, you will make for a more sustainable market that is able to weather future storms saving time and stress in the long run.
1) Define Your Market
Write your vision and mission statement: Although a mission statement should be simple, crafting one often isn’t. That’s because board members, donors, staff, volunteers, vendors, and shoppers, may all have different ideas about your purpose, as well as different words to express that purpose. Here’s a guide from University of California’s “Growing Your Farmers Market: Farmers Market Management Series” to help you create a mission statement that will guide your market for years to come .
2) Make a business plan.
“The business plan answers the key questions about the business: who, what, where, when, why, and how. For a developing business, it begins the process of making an idea materialize into reality and determining whether or not an idea should become reality. It also establishes goals and benchmarks for the business. A comprehensive business plan makes it easier for a business to receive external support, especially in terms of financing from potential investors, lenders, and grant sources. Finally, and possible most importantly, going through the process of planning is very valuable because it forces the business owners and/or managers to think through every detail of the business.” –Kentucky Center for Agriculture and Rural Development
- Business Planning for your Farmers Market Webinar: For a step-by-step guide to a business plan specific to farmers markets, see this excellent webinar from Aleta Botts of Kentucky Center for Agriculture & Rural Development (KCARD).
- Business Plan Development Guide: Here’s a resource from KCARD to help you develop a comprehensive business plan.
- Effective SWOT Meetings Worksheet A SWOT Analysis is the process of documenting the agency’s Strengths, Weaknesses, Opportunities and Threats. The information can serve as a foundation for the agency’s workforce and strategic/business planning.
- Kentucky One-Stop Business Portal: This KY.gov site will guide you through turning your ideas and concepts into a business plan and will connect you to resources that will help you know what to expect on the path ahead.
- Kentucky Small Business Development Center: With 15 service centers statewide and an experienced and knowledgeable staff, KSBDC provides consulting and training services. Services include: one-on-one management consultations, training workshops, market research, loan packaging help, assistance with financial projections and information needed to make informed business decisions.
3) Choose a business structure
Most independent farmers markets will fit into one of the following business structures. Some farmers markets are not independent legal entities—they may be programs operating under the umbrella of a larger organization. Here are some farmers market specific definitions from the Center for Agriculture & Food System’s Farmers Market Legal Toolkit.
- Sole Proprietorship
- Limited Liability Company (LLC)
- For-Profit Corporation
- Umbrella Organizations
Here are Kentucky Specific information about business structures from KY.gov.
4) Set up your governance:
Business documents: How your business entity operates depends on the type of business structure you choose. Here’s a chart that details which documents your market will need for your particular business structure. Both are from the Center for Agriculture & Food System’s Farmers Market Legal Toolkit.
By-Laws: By-laws enable members to determine what rules they can all agree with and abide by, and yet allow the members to make changes when the organization grows and changes. These rules ensure stability, continuity, and structure.
- Bylaws Template from the Federation of New York Farmers Markets.
- Examples of Market By-Laws from the Maine Federation of Farmers Markets
Board of Directors: This guide from the NE Organic Farming Association of Vermont explains why most farmers markets have a board of directors. All nonprofit organizations are required to have a board and even farmers markets that are sponsored by other agencies or organizations often have boards. The board’s role and legal obligation is to oversee the administration (management) of the organization and ensure that the organization fulfills its mission. Good board members monitor, guide, and enable good management; they do not do it themselves. The board generally has decision-making powers regarding matters of policy, direction, strategy, and governance of the organization.
Board Trainings: Kentucky Center for Agriculture and Rural Development offers board trainings on a variety of topics. These are few that have addressed in previous board trainings:
- Conflict Management
- Board Members- Roles & Responsibilities
- Officers- Roles & Responsibilities
- Conducting Board Meetings & Understanding Parliamentary Procedure
- Corporate Records that Must be Kept and Maintained- General & Financial
Board Operations: This business management blog has links to many topics related to boards of directors. If you didn’t find it someplace else, click on this link.
What Does a Good Board Member Do? A compilation of suggestions from various sources
Sample Board Meeting Evaluation A useful strategy to evaluate your board of directors is to conclude a meeting by asking members to rate the meeting on an index card. Here are a list questions that can be answered in narrative, with a sliding scale, or yes and no answers.
5) Choose a market site
Site Selection Tool: On pg. 49 of this “Guide to Developing a Community Farmers Market” you will find a worksheet that will help you select the best site for your market.
Department of Transportation Datamart : Use this interactive map from the Kentucky Transportation Cabinet to discover your city’s or county’s most traveled roads.
U.S. Census Small Business Builder: Use U.S. census data to help you select the best location for your market
6) Register as a business
Kentucky Business Registration This KY.gov portal will walk you through all the steps needed to register your farmers market as a business. Links for federal and local requirements are also included on this site.
Kentucky Department of Agriculture (KDA) Registration: Markets are encouraged to register on-line in the Kentucky Proud system. Only Kentucky Proud members will be listed on a searchable data base for farmers markets on the KDA website, be eligible to participate in Farmers Market Nutrition Programs, be eligible for the “farmers market temporary food-service permit” and to participate in cost share and discounted promotional items from the KDA. Follow the link for more information about the benefits of being a register Kentucky Proud market.
7) Set Up Your Financials
Drafting a Budget and Then Living Within It – Here’s a blog post by Aleta Botts from the Kentucky Center for Agriculture and Rural Development explaining how to use a budget as a guiding document for market planning.
Farmers Market Bookkeeping Best Practices This slideshow from the Washington State Farmers Market Association highlights book keeping software, chart-of-accounts, financial reporting and budgeting, tracking multiple currencies, debit & credit card processing, EBT transactions and incentive tracking.
IRS ruling 6050W on 1099k IRS electronic reporting requirements for farmers markets. This rule requires all electronic card processors to issue 1099K’s to all merchants accepting electronic payments. This includes all credit, debit, and food stamp payments. Here is an explanation of the rule and some tests to determine if you are exempt from it.
Example of a Financials Template: Here’s a template that will get you started in financial record keeping.
What Non-accountants Should Know on Board Finances Without some assistance, non-accountants may find it difficult to fully understand financial statements. But your nonprofit organization may benefit if you and other key personnel learn the fundamentals of financial statements. Here’s a primer to help you interpret the numbers.
8) Know the Laws Governing Farmer Markets
2018-19 Kentucky Department of Agriculture (KDA) Farmers Market Manual. This manual is updated every 2 years and details Kentucky’s rules and regulations for selling at a farmers market.
The Farmers Market Legal Toolkit This kit was created by the Vermont Law School Center for Agriculture and Food Systems and is a useful resource if you are just starting your market or if you are an existing market wanting to explore your legal obligations. It includes legal resources, best practice recommendations, and case studies for market leaders on selecting and enhancing business structures, accepting SNAP benefits, and managing common risks.
Local Law: These differ from city to city and county to county. Check with your local health department to find out any specific food safety certifications your vendors may need, as well as your city or county governments to find out what local taxes, business licenses or other regulations apply to your farmers market.
9) Know your risks and manage them
Risk Management: Check out this section of the Farmers Market Legal Toolkit to learn what legal risks farmers markets face and how a market prepares for them. This includes injuries, damages, vehicle traffic and other safety risks at the market with links to examples of market day safety checklists.
Insurance: Click this link to the Farmers Market Legal Toolkit to explore options, determine coverage and learn how to choose an agent.
Where to purchase Farmers Market Insurance:
- FMC and Campbell Risk Management: Recognizing the need for affordable liability insurance for farmers market vendors, the Farmers Market Coalition has partnered with Campbell Risk Management (CRM) to help make their farmers market insurance program available at a national level.
- Kentucky Options: Most Kentucky insurance companies should be able to generate a commercial (slip and fall) coverage for your market. If your market is incorporated, directors and officers insurance is also recommended. You might consider an insurance broker so you can shop for the best deal for either of these policies.
10) Rules and Regulations
Develop Market Rules and Procedures Here’s a guide from the Farmers Market Legal Toolkit to help you develop rules for market day safety, vendor eligibility & applications, vendor rules & regulations, dispute resolution and more.
Market Policies: FAQ about rules and regulations for your market from the Farmers Market Coaltion.
Market Rules and Regulations Examples:
British Columbia Association of Farmers Markets (BCAFM) A collection of sample documents from member markets including policies, regulations, vendor handbooks and vendor applications forms
Revisiting or Developing your Rules and Regulations: In this webinar from James Cochran of CFA, we’ll examine how to think about your market’s organizational structure, and how it held up to the stress tests put forth by customers, weather, and vendors. Then, we’ll discuss when and how to implement a rule change if it is needed.
11) Vendor Recruitment
Recruiting Farmers to Your Farmers Market Here is a one-pager with tips on finding farmers for your farmers markets.