Farm business for sale

If I were looking to operate a farm business (and had the asking price) I’d certainly consider buying this one. Debbie noticed this classified ad in the April 2008 issue of Growing for Market:

FOR SALE: The number one organic garlic seed online/mail-order business in the U.S. Established in 1988. Sale includes seed stock for over 100 strains, website, customer list. Price $400,000. Visit filareefarm.com.

Initially the price struck me as low, but then I realized that they don’t seem to be selling the farm itself, just the business. The buyer will presumably have to set up his own physical operation (land for planting, buildings for storage and processing and shipping). I’d be a little nervous about moving such a large operation to a new location, but I suppose it could be done. (One rule of thumb I’ve heard is that a business should repay 10% of its purchase price annually, so take $400,000 and add the price of the physical farm, then expect one-tenth of that as annual net income.)

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One thought on “Farm business for sale

  1. I’m sure you know that rules of thumb are just that, but it matters quite a bit how much of the purchase price is tangible assets. If you buy equipment, land, livestock, etc., you can always sell them later. In that case, 10 to one might be good. But in the case where all your assets are intangible (customer lists, ideas, processes, etc.) then a better rule of thumb is 3 or 4 to one, in my opinion. Though, there are a plethora of other factors of course.

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