But if you decide to restrict the definition even further, surprisingly many farm and ranch operations are still found operating a home-based business. Around 18 percent of farm households also operate a nonfarm business. In 2007 these nonfarm businesses employed over 800,000 workers and contributed an estimated $55 billion to the local economy. Now realize that not all of the nonfarm businesses are home-based but the vast majority are.
So what type of businesses are we talking about? Fifty-three percent are in the service sector with an additional 26% in construction and the majority of the rest involved in some value-added agriculture opportunity such as agritourism or value-added ag. The owners are doing this as it allows them to use not only their physical resources of land and equipment more fully but also capitalizes on their own human capital as entrepreneurs. Farm portfolio managers, how these multi-business owners are sometimes categorized, take advantage of their ability to organize resources across competing needs. They just begin doing it on a larger scale. Such farm households earned over $21 billion in income operating these nonfarm businesses.
It should not be a surprise that 69% of the portfolio entrepreneur farmers live in a rural residence. And although overall this groups employees a substantial number of people, the majority of them are sole proprietors meaning they employee no one outside the family.
Bottom line – the next time you think of home-based business owners, don’t forget to include farm and ranch operations especially those who are involved in one or more nonfarm activities.
To read more about the farmer-owned nonfarm business segment: http://www.ers.usda.gov/amber-waves/2013-april/the-importance-of-farmer-owned-nonfarm-businesses-in-the-rural-economy.aspx#.UeaeIbEo5aQ