Market Fundamentals

The Market Fundamentals section includes many of the preliminary questions you will want to ask and answer before opening a market. Click on a question below to see the answer, and view interviews with directors in successful flagship farmers markets by clicking video icons on the left.

What questions should we ask before starting a farmers market?

Here are some of the first topics and questions you might consider as you begin:

Location. Finding the right location is important for the success of your market.
Do you have a place in mind for your market?
Do you know who to talk to in order to legally secure the location, and how much it will cost?
Have you considered the accessibility of the location for your target customer base, and your proposed vendors?

Community support. The most successful markets begin when community members express interest and desire for a farmers market and rally together to make it happen.
Is your community interested in shopping at a farmers market?
Will the local government be supportive, or are there regulatory barriers to starting the market?
Will local businesses be supportive or want to be involved in the market?
You might want to conduct a survey to find out the answers to these questions. You could use this sample Feasibility Survey for Consumers or the Feasibility Survey for Businesses from the Farmers’ Market Federation of New York to learn more about your consumers and local businesses.

Farmers. Your market wouldn’t be a farmers market without farmers.
Do you have farmers in your area that are interested in selling at a farmers market?
What days and times will work best for them to come to your market?
A great way to get this information is to survey local farmers. The Farmers’ Market Federation of New York also has a Feasibility Survey for Farmers. Iowa’s Department of Agriculture and Land Stewardship has a great example as well.

Management.The most successful markets have paid managers and/or coordinators, perhaps along with a board of directors and several market volunteers.
What management structure and staffing are best suited to your budget and abilities?
What will the mission of your farmers market be, and how will you carry that through as you manage your market?
As you read the rest of the Frequently Asked Questions series, we encourage you to take your time in considering the questions and answers. Remember, others have asked and had to answer these very same questions before. The resources below are a few examples of what experts and experienced managers have to share about starting a market.

These are only a few of the great resources already out there for starting farmers markets. Check out even more and find the one that works best for you in the Market Start-Up and Development Section of the Farmers Market Coalition Resource Library.

How should we choose a location for our market?

First, choosing your site might depend on what is available to you and how much it will cost to use it. Can you find a private landowner that will allow you to use their property or will you have to pay for a permit for public property? As you’re looking at sites, here are some things to keep in mind:

Accessibility. Look for a site in a central location with plenty of through traffic, and that’s easy to get to by all modes of transportation. Try to find a place by a well known landmark or intersection or near offices or other businesses.
Space. You want to find a location that can accommodate the space needs for the number of vendors you will have and/or hope to grow to in the future, while leaving space for shoppers to easily circulate through the market and stop and socialize with one another. Here is how Carla Jenkins of Cedar Park Farmers Market calculates her spacing needs: “I allow width for farmers’ trucks (18′) + their canopy (10′) + an isle (15′) + canopy(10′) + another isle (15′) + canopy (10′) + truck (18′). All of that is my width, times the number of 10′ booths for my length to figure the square footage needed.”
Parking. If you expect many of your customers to be driving to the market, is there enough parking available close by? Suzanne Santos from Sustainable Food Center’s Farmers Market in Austin, Texas says to plan on a minimum of 500 spaces for a four hour market that has 4,000-6,000 shoppers. If you can find a location with free parking nearby, even better!

Utilities. A site with access to electricity, water, public restrooms, and a place for people to wash their hands will all be things to consider when choosing a site.
Ground Cover. Try to find a site with a level surface on asphalt with minimum standing water and pot holes. That will make it easier for vendors to drive their trucks without risking damage, and provide a safe shopping experience for customers.
Long-Term Availability. Opening a market in one place only to move the next season when the site owner sells or redevelops the property is a frustrating, but not uncommon, experience for farmers markets. You can help avoid this by requesting a long-term lease.

For more information on what to look for in the ideal market location, look at Matthew Peters’ paper on Locating Farmers Markets. You can also use his Site Selection Tool to compare multiple potential sites for your market.

Finally, when reviewing potential sites, consider whether there are any federal buildings in your community that could be good locations for a market based on the criteria above. If there are, check out the USDA’s resource for Opening a Farmers Market on Federal Property.

How should we choose operating hours for a market?

What hours you decide to hold your market will really depend on the needs and characteristics of your community and the availability of your vendors. Farmers markets are operating everyday of the week at various hours all over the country. While many take place on Saturday morning, others are operating mid-week, during the day or into the evening. A weekend market allows those that work during the week a chance to shop and socialize with friends and family, and provides a great opportunity for special events, music, and activities for kids. A market in the morning or mid-day during the week might attract stay-at-home parents, seniors, or individuals who work evenings, while mid-afternoon and evening weekday markets can attract individuals on their way home from work or from picking up the kids. Where you find a location may help dictate ideal operating hours. If a location that is available to you is a busy office district, a mid-afternoon to evening weekday market may just be the right choice.

When answering this question for your market, take a look at who your customers will be and what works best for your potential farmers by conducting a survey. Samples of a Feasibility Survey for Consumers and a Feasibility Survey for Businesses from the Farmers’ Market Federation of New York may help you develop your own to find the best options for operating hours (more thorough sample feasibility studies are included in the last FAQ in this section, below). Also, look at the operating hours of other farmers markets in the area and determine if you should schedule your market on a different day or time to get enough customers and vendors. There is no magic formula for deciding operating hours. Taking time to understand your community and vendors needs will help you find the best choice and as Mark Wall from Thriving Community Marketplaces advises, “Don’t copy, DESIGN!”

What kind of governance structure do we need?

It’s important to have a governance structure that works to meet the needs of all involved in the operation of your farmers market, including vendors, customers, and your community. There are a few different ways in which the governance of a farmers market can be structured. Some farmers markets are owned and operated by city, community, or government organizations, while others are owned and operated by vendor associations. There are also satellite markets established and operated under other existing farmers market networks and ones that are owned and operated by private individuals, companies, and corporations. Establishing a farmers market association is a way to get maximum input from your farmers and vendors. Take a look at the Farmers’ Market Federation of New York’s Guide to Developing a Community Farmers Market for more information.

A popular governance structure for farmers markets is as a nonprofit entity, either one dedicated to managing the market, or a larger existing entity that acts as an umbrella and fiscal agent for the market. With this governance structure, the entity and the farmers markets are traditionally governed by a board of directors, which has legal authority over decision-making. The board then delegates management of the market to an organizational director or market manager who oversees the day-to-day operation of the market itself. To learn more about the roles and responsibilities of the board of directors and what should be included in your governance structure, take a look at The Governance Structure of Your Farmers Market by University of Minnesota’s Extension Service.

One of the first steps toward establishing a nonprofit, whether recognized only by the state or by both the state and the IRS, is the creation of organizational bylaws. One example of farmers market bylaws is available in the Farmers’ Market Federation of New York’s Farmers Market Manager Training Manual, as well and the by-laws of the Rural Mountain Producers’ Exchange, Inc. (which operates the successful Fayette Farmers Market) offers a template for farmer-governed markets. FMC’s Resource Library also includes sample by-laws from the Loudoun Valley Homegrown Markets Association, as well as some sample by-laws from members of the British Columbia Farmers Market Association.

If you’re a small farmers market and not currently established as a nonprofit, you might want to think about establishing an informal advisory board of community stakeholders to provide feedback and assistance. While this type of governance will not have legal decision-making authority over your market, they can help you in your decision-making process, to help establish a market that’s good for your vendors, good for your customers, and good for the community.
Here are some additional resources on market governance:

Who should serve on our board?

When deciding who would be appropriate to serve on your board, you will want to find individuals with skills and experience beyond agriculture, particularly individuals from your community who have experience with legal, fundraising, planning, financial, and retail aspects of businesses and/or nonprofits, which will help ensure your market is a success. Make your board as diverse as possible with as many people from the community that will have a stake in the market including community leaders, farmers, local business owners, chefs, and community members. Make sure you include vendors on your board so that they have a voice in decision making. Your board of directors will help shape your mission and vision of your market and determine how your market impacts your vendors, customers, and community so try to give them all a seat at table.

Does our market need to be a 501(c)(3)?

Establishing 501(c)(3) status is not necessary to having a successful farmers market, but there are a few benefits: 501(c)(3)s are able to accept contributions that are tax-deductible to the donor; they’re exempt from federal and/or state corporate income taxes from business-related income and sometimes state sales and property taxes; they enjoy increased public legitimacy and awareness; and their status makes them eligible to apply for many public and private grants. Additionally, some markets find that the nonprofit status helps keep them on mission, and the transparency requirements ensure good market governance. However, establishing 501(c)(3) status can be a significant time commitment, requiring a long and not always fruitful application process. To achieve c3 status, a market must prove to the IRS that its primary purpose is public education, poverty relief, combating community deterioration, or otherwise lessening the burdens of government. We’ll discuss some alternatives to the 501(c)(3) below, but to read more about applying for 501(c)(3) status, see Chasing the Coveted (c)(3): The Trials and Tribulations of Form 1023 from the Farmers Market Coalition’s newsletter. Additional resources in the FMC’s Resource Library include:

Aside from 501(c)(3), what options do we have?

One great alternative to becoming a 501(c)(3) is to simply find an umbrella organization to become part of; this way your market can take advantage of many of the benefits of being a 501(c)(3) without going through the process itself. Another option is to try for c4, c5, or c6 status—55% of tax-exempt farmers markets have one of these statuses. Although donations to your organization would not be tax deductible for the donor under these designations, your market would have more freedom to engage in political lobbying than those with 501(c)(3) status. To be a c4, your market must prove that it furthers the general welfare of the local community; examples of this include supporting the local economy and improving shopping opportunities. To be a c5, the market must have as its main mission the benefit of farmers or ranchers, by providing them with new marketing outlets. To be a c6, the market must show that it is an open membership organization improving business conditions for people with a common business interest. For more information about the differences between the 501c statuses, take a look at FMC’s Tax Status Comparison handout.
If you would prefer not to operate as a nonprofit, one novel option would be to see if your state legally recognizes the low-profit limited liability company: the L3C. An L3C runs like a regular business and is profitable, but has the primary focus of achieving social benefit. While L3Cs are not exempt from federal or state tax, and investments in L3Cs are not tax deductible, no federal income tax is imposed on the L3C itself; instead, taxes are passed through the L3C to its members, in proportion the members’ ownership shares. L3Cs also have the advantage of attracting Program Related Investments from foundations, which count toward foundations’ minimum payout requirements.  As L3C is a relatively new concept in many states, there are not currently many farmers markets with this status.

How important is strategic planning and writing a mission statement to a farmers market?

Planning is extremely important to the long-term success of your market. It keeps you focused on the organization’s original goals while training your eyes to bigger and better sights on the horizon. As farmers markets are businesses, taking the time to develop a business plan for your market allows you to define the mission of your organization, determine your profit goals, establish a direction, and attract funding for your organization. Take a look at Show Me the Money: Business Planning for Farmers Markets by the Cooperative Development Institute for more information.

Strategic planning is another type of planning you may want to consider undertaking. It helps you determine the vision and mission for your market, establish your objectives and the actions you’ll take to achieve them, and develop methods to evaluate your success. In 2010, the Urbana Farmers Market (operated by the City of Urbana) developed a Farmers Market Strategic Plan with public input, and their process may be useful to anyone interested in undergoing a similar process.  The Washington State Farmers Market Manual (pg. 68) also covers strategic planning. For more guidance on how farmers markets can engage in strategic planning, watch the Farmers Market Coalition’s Information Marketplace Webinar, Strategic Planning in the Real World: How to Put No Staff, No Money, and Big Dreams to Work for Your Organization or download the presentation as a PDF.

At the very least, develop a mission statement for your market if you have not done so yet. Your mission statement defines your purpose, the needs or opportunities your market addresses, and the values that will guide your policies and operations. Your mission will guide how you decide what activities and policies your market puts into practice. For that reason, communicate your mission publicly as much as possible by including it on your website, brochures, and market application. You’ll be glad you took the time to develop a mission statement, as it will be a guiding star when tough decisions need to be made regarding policy enforcement. Review the following resources on developing a mission statement:

Should we build a permanent structure for our market? If so, how?

Depending on the climate in your area, a permanent structure may benefit your market by providing a year-round market space that’s protected from the elements. Market structures, particularly in northern climates, allow for a more dependable year round space, creating more consistent and dependable sales for your vendors. At the same time, building a permanent structure can require a large capital investment, and should be carefully evaluated before beginning. Some things to consider include:

  • Who will own the building, and the land on which it sits?
  • Who will design the structure, and will it have electricity, storage, and office space?
  • Where will producers and shoppers park their vehicles?
  • Will it be in use on days when the market is closed?
  • Will you need to change your fee structure to recoup ongoing costs?
  • What if the location turns out not to be optimal and you later need to move?

Market structures require maintenance and a long-term plan for their upkeep. All in all, if your market is just getting started, there is no need to rush into building a permanent structure. Focus first on ensuring your market will be successful and self-sustaining over time before making the investment or approaching community partners to fund its construction.

In considering a permanent structure, don’t forget that one of the unique qualities of farmers markets is the open-air atmosphere of the market, and that the absence of a permanent structure allows flexibility for changing locations if need be. Suzanne Santos, of Sustainable Food Center’s Farmers Markets in Austin says, “The ‘pop-up’ nature of the farmers market makes it part of the fun.” You may also realize that, like many markets that are open year-round rain or shine, even in colder climates, a very loyal customer base will brave harsh weather to support the market if the product mix is appealing. A rain or shine policy where customers can depend on vendors to be there may be all you need to keep your customers coming regardless of weather. In Market Day: Hours, Location, Parking, and Weather, Market Umbrella says that, “Rainy days are where our market reputation is made.”

If you do decide that you have the resources and the need for a permanent structure, the USDA’s Agricultural Marketing Service offers Wholesale Marketing and Facility Design, with guidance and technical support for the construction and remolding of farmers markets. The New City Market, Vancouver’s innovative food hub, market, vendor hall, and event space conducted a feasibility study in 2010 which you might also find useful, along with market feasibility studies from Louisville, Kentucky and Grand Rapids, Michigan.