The first of the PRIMER factors is Profitability. Clearly any new or expanded enterprise must add to the overall profits of the farm.
- Does this enterprise have promise to deliver large
enough revenue relative to the investment required?Yes No Maybe
- Can I build in special competitive factors that
can enable profits to be durable over time?Yes No Maybe
- Is there a considerable upfront cost to be incurred?Yes No Maybe
- Can I set specific, measurable, attainable,
profit goals for this enterprise?Yes No Maybe
Profitability can be identified by deduction various kinds of expenses from total estimated revenue. The Profitability Worksheets (found in the reading ahead) begin with estimating a total revenue amount as the total yield times the expected price. The total revenue amount, of course, can vary widely, and will need to be revised when we come to the marketing and risk worksheets. Still, an estimate of total revenue needs to be made using the best information available on what can be expected for yield and price to the farmer.