I found an engaged group of first-generation farmers at a recent young farmer and rancher event in the Northwest. One individual had a very thoughtful question, “What is the biggest mistake that the first-generation farmer or rancher could make other than attempting to start up in this type of marketplace?”

Many individuals of the senior generation are indicating that farming is no longer providing opportunities for the next generation of producers. While it may appear counterintuitive to start a new business in a down economic cycle, now is actually more opportunistic than the “go-go” years. In some areas of the country, machinery, equipment and livestock can be purchased at discounted prices compared to the economic super-cycle years.

As many as 30 to 40 percent of producers do not have a next generation of family members to carry on the farm legacy. This is creating considerable opportunities for new producers compared to the past decade. In addition, the ability to enter niche markets and have a diversified stream of earnings is often an avenue to pursue the dream of agriculture.

The number-one mistake made by first-generation producers is to dream of operating a farm or ranch without stepping back and developing a written business plan. While some may think that developing a business plan is a waste of time or too academic, this process requires you to think critically about the endeavor.

Start your business plan with an assessment of your strengths, weaknesses, opportunities, and threats through a SWOT analysis. This valuable exercise will allow you to recognize your strengths and weaknesses ranging from finance to talents and resources that you bring to the table. A SWOT analysis will also identify market opportunities and possible threats.

The business plan should also include your short- and long-term business, family and personal goals. Incongruent goals can be a dream wrecker one to three years down the road. Another important component of the business plan is taking the time to develop a cash flow budget that includes schedules of production, income, costs and repayment of borrowed funds. Finally, one of the biggest mistakes is not engaging your lender and others in providing valuable counsel and insight to achieving one's dreams.

While traveling this winter, I have noticed more first-generation farmers and ranchers despite the economic challenges in the agriculture industry. The entrepreneurial spirit and opportunities still exist for first-generation farmers and ranchers in this down economic environment.