Young farmers, eager to get their hands wet (or dirty, as the case may be), often overlook one simple thing about starting a farm: It’s not just a farm; it’s a business.
A farm has, in essence, all the same parts and pieces that almost any other business has. Knowing those parts and pieces—adopting them and putting them in place early—as boring as it sounds, can actually make farming more enjoyable in the long run. If there is anything I wish I knew when I was younger, it is that. Whether you’re growing vegetables or raising hogs, it is good to understand all that goes into making a farming business successful, sustainable and profitable, even if all you want to do is get going.
Before you plant a thing, it is prudent to do your budget. This should include how much you need to earn and where all that money is going to go: bills, food, vacation—everything. Separate business and personal expense, but make it comprehensive. With a sales a goal, you can then know how much you need to make and start planning your business.
Whether you’re buying pigs to raise for meat or growing veggies from seed, your profit begins with monitoring input expenses. This doesn’t mean purchasing the cheapest materials or resources available—it means shopping around and taking good notes about performance. The temptation with any business is to do as much of the production in house—growing the seeds or keeping a sow and boar, for instance—but the end product must be just as good. If you can’t do aspects of your business well or affordably, it’s worth outsourcing this part of the process.
Manufacturing The Product
For farmers, manufacturing is more growing or raising than creating, but it shouldn’t be thought of much differently. You still have to create your product, and this process must be done as efficiently as possible. A new farm, then, should always be monitoring their production to see where they can be more efficient. This may be as simple as keeping tools close to where you use them, as Ben Hartman recommends in excellent book for this subject, The Lean Farm. Or, it may be just making sure you can get to the tools you need. Shaving a couple minutes off of every day will save you weeks or months of work in the long run.
Your product should be cleaned and packaged, just as if you were selling anything else. This process, like everything else, should be monitored for efficiency, but also for quality control and cleanliness. It is in the packaging stage that the farmer last handles the food so this is the last opportunity to make sure there are no bruised lettuces, rotten tomatoes or anything else that will reduce the public’s perception of your product. Happy customers bring more customers, but unhappy customers may never come back.
Farmers markets, grocery stores, restaurants and CSAs are all great ways to distribute food, but only if it’s profitable. Start this process by doing some market research. Don’t sign up for a market only to find out that it’s a bad market (though if that happens, also don’t be afraid to walk away mid-season for something better). Also, keep track of your labor. If you are spending more money than you’re earning to be at a farmers market, then it’s probably not worth it. Try and contract some restaurants instead or start some sort of direct distribution service, like a CSA. But if the CSA is costing time and not making you money, drop it. Don’t be afraid to evolve—every market is different.
If you do not feel like a people person, or a salesman, relegate sales to someone else in the family. There is still an element of salesmanship needed to run a successful farm, so make sure that whoever is the face of your company is as magnetic, charismatic and friendly as possible. Paying someone may seem like a big expense, but if they can increase sales enough, they may pay for him or herself without much trouble.
Record Keeping & Accounting
Record keeping and accounting do not have to be boring or daunting. They can be as simple as five minutes a day or an hour a week of just writing down expenses and income, yields and inputs. Nothing will save you more money than knowing where you money is going or which crops or animals are performing best. Take notes and be diligent—that’s the medium on which success grows.