Farming is an ever-changing business and needs careful attention to detail to be truly successful. Here are seven tips to consider — whether you are new to farming or have been farming your whole life.
In order to have a successful farming operation, especially in today’s farm economy, it’s essential to have a plan — and more than one, at that.
Make a business plan and stick to it. This is a living document, so refer to it throughout the year and make changes as needed.
A marketing plan will help you decide what products you are planning to sell, when and where you will sell them (grain elevator, farmers markets, wholesale, restaurants).
A risk management plan is essential. Accidents happen, people get sick, equipment breaks, the weather is unpredictable — in short, life happens, so plan for the worst.
Make an operations plan. Think about all the activities needed to make your business successful and who will be in charge of what tasks. I.e. who will keep the books, who will run the parlor, who will do the field work, who will run the breeding program, etc.
Selling agricultural products is often a cash business and you need to be careful with all that money. Create a plan that tracks every penny you earn and spend, and create ways to get that cash into the bank.
Farm equipment and livestock equipment, as well as livestock itself, are expensive but they are essential investments for the farm. Think through your major purchases, determine how you will finance them and how that investment will benefit the farm.
Insurance and permits
Talk with your insurance agent and explain what you want to do. A good agent will help you through the ins and outs of the business and make sure you are covered. Don’t fear regulators or insurers — they can help and protect you. Insurance, permits and licenses are all part of being a legitimate business.
Surround yourself with people who will pick you up when you are down but also give you tough love if you are headed in the wrong direction. Find fellow farmers and business professionals outside of farming who can give you good, honest advice from a fresh perspective.
Pick one enterprise that you really like, that you’re good at, and has money-making potential. There are only 24 hours in a day, so spend your time on the ones that make your business successful. Don’t stretch yourself thin by getting too diversified when you are not ready. The same goes for markets: Focus your time in places that are the most profitable for you.
Don’t be afraid to change your plans when things are not working. Review your farm plans and make the changes necessary to continue to make your operation successful.
Credit – Farm and Dairy