Updated: Dec 14, 2020
Many of us grew up playing with farm toys; cute farm animals and shiny tractors and as we grew so did that ideal of farming. Some people think that the best thing in the world would be sitting on a tractor in a field away from offices, traffic and people. That does sound nice but not everyone farms that way. The question is, what does farming entail and is it really for you? To complicate matters, there are lots of retiring farmers and unfortunately we don't have a rush of new farmers taking their place. So, we need new farmers because otherwise who will grow our food? Are you part of the next generation of farmers? If so, I'm so glad you're here! We talk to farmers everyday and we see the struggles they encounter. They are small businesses that need customers, they need organization and they need time and energy to run things on their farm. So, here are some common things that get farmers into trouble and how to avoid them yourself as a new farmer.
Mistake #1: Running your farm as a hobby not a business
If you're trying to make money from farming then the bottom line is, this is a business you're running. Run it like one. If you love beets, are super passionate about them and their health benefits, how they taste, whatever. That's awesome but if beets are not popular in your area and your can't sell them, then they won't be profitable and you should not be growing beets, unless of course it's for yourself. Sell something that you can sell in your market. Go to local restaurants and see what they need. Look online at the restaurant menu and see what they offer. This is doing market research. I've known farmers that grow greens and bring them fresh and beautiful to the restaurants, to show them what they offer and sell them right off the truck. If that feels too pushy call first and try to make connections at the restaurant. Ask questions about what specifically they want to serve and ask if you grew that would they buy it from you. Talk to groups of friends, neighbors or groups you are in, people you know and see what they want to buy. Whatever you plan to sell you need to have a plan to sell to paying customers. Which brings me to my next mistake on the list.
Mistake #2: No plan
This is a common business mistake, not having a plan. You might be passionate about sheep and want to sell your wool, meat and milk. That's awesome, but not only do you need to know how to take care of sheep, you also have to know how you're going to sell your sheep items. Have a plan and spend the time to write it all out; the Who, What, Where, When and Why. (Do this before you buy the animals or grow the plants.) It's a sad fact that about half of small businesses fail and I don't want to see that happen for you.
There are a ton of business plan templates online that are free and easy to use. Any of them will get you started on writing out your dream. You've heard it before, I'm saying it again; A goal without a plan is just a wish. Don't wish. Be very clear about what you want to do, where you're going and what steps you're taking to get there.
A business brief business plan overview:
-Executive Summary (Who you are) -Company Summary (What is your business)
-Market Analysis (Who and where are your customers)
-Organization & Management (Business structure)
-Services or Products (What you're going to sell)
-Marketing & Sales (Projections on profit)
-Financials (Start up costs)
A great resource that is available to help build your business plan is www.Agplan.edu.
To many people think the business plan might seem like an unnecessary step but it's very important to have your path clearly marked. You wouldn't start out on a trip without knowing about the place you're visiting, where you want to go, where you're going to stay, etc. Your business is very similar.
Key point: Include a marketing plan in your business plan. Write out what makes you different from your competition. These are your strengths. What makes your farm different or better than other farms in your market? Reevaluate your competitive advantage and your marketing plan annually so that you know who you're up against. Write down your weakness as well so you can work on them or get help to overcome them.
Mistake #3 : Not adapting to your market
Being adaptable and innovating in your specific market is an important step in business. Markets change and we need to adapt with them. Avocados weren't a superfood 10 years ago. (We didn't even know what a superfood was 10 years ago.) Look around for what is missing or needed in your area (and grows well there) and you might just find your niche!
Finding these new markets is the challenge with any business, we just happen to be talking about farming. Being innovative in business can be challenging but fun. Here are 7 ways to innovate in your market. How can you be innovative in your market? 7 steps to innovate in your business: 1.) Find a need or market. (Use complaints or difficulties you've heard from clients to drive this need) 2.) Learn about the product; its uses, production and issues (Ask the customers) 3.) Talk to other producers about problems, solutions and costs they have 4.) Secure start up capital if needed 5.) Do the work - or get help if you need to 6.) Be prepared for mistakes and keep going! 7.) Be optimistic about your business but realistic (keep track of everything)
Find what is valuable in your market and bring that to your customers and they will keep coming back.
Mistake #4: Money issues: Under investing or getting in over your head
There's a balance that you need to find between buying everything you want and getting what you need at the moment. You don't want to take on too much in the beginning without being profitable.
Often to get land you will have to take a loan or lease space, sometimes there's machinery or fencing needed which costs money to buy. How are you going to get those bails of hay or livestock to your land? What about the seeds to grow those vegetables. They all cost money.
Use everything you have before expanding. Often new farmers will want to expand before they can really support that expansion. Be smart about available space. Could you grow on arbors instead of flat land? Could you mob graze so you have smaller pieces of land being used for short time periods. There are lots of options for thinking outside of the traditional methods. Looks at some of those to grow smart.
Borrow or rent where you can. For instance, instead of purchasing a tractor that costs a lot upfront and will depreciate over time, is there the possibility that you could you borrow one or rent one from a friend? There are places that you can rent equipment and although you still have a cost associated with renting it might now be as much as purchasing. This is a good idea for equipment you don't use very often. There are ways to get started without burying yourself in debt. You don't have to buy everything at once. Be smart about it. Go slow in incorporating types of operations on your farm. This is where the plan comes in. How will year 1 be different than year 5?
A great option is to find a farm mentor or spend a season as a farmhand or WOLFF. Get real-life hands-on training on a farm and see if you even like it, what would you do differently than the farmer you work for? What unique thing do you have to offer?
Mistake #5: Being Overly Optimistic
You're going to fail and that's not a bad thing. You're going to lose crops to weather and/or drought and/or pests and disease. You're going to lose animals to predators and/or disease. These are really hard and sad lessons. Sometimes you just want to throw in the towel or get a do-over so you can put up a better fence or be less hard-headed and buy the insurance. They are lessons that you learn from and then you do better the next time. How many times did Edison fail at making a light bulb? Plenty. If you think about it, each farmer gets about 30 seasons to make their mistakes and learn from them before they stop farming. I wish they would have a class on agriculture in schools because each time a farmer retires and doesn't pass on this information to the next generation, we lose 30+ seasons of valuable knowledge. I know this first hand because my great grandparents were dairy farmers and my grandparents were chicken farmers. None of that information was passed on to me and I've had to figure it out as I go. I'm pretty positive my great grandparents would have some excellent advice for me and we would certainly commiserate about the mistakes we've all made. So, make your mistakes but be sure to learn from them so you can do it better next season.
Mistake #6: Not measuring your farm activities (and optimizing them)
I see this one most of all. After about 3 or 4 years, a farm will being to feel like they should be more organized and things could be running better and then they start looking for a better way. Let me know if this sounds familiar: You're selling some livestock-let's call it sheep. Your customer wants to start a small herd and needs to know that the sheep are not closely related. To see exactly who begat whom you break out a 3 ring binder notebook of your flock thorough the years. This notebook had seen some things. There are suspicious stains on this notebook and they may or may not be sheep placenta. Nothing wrong with some honest placenta but does it need to be presented in record from in front of your customer? Probably not. Keep your records in a place that they are easy to get to and clean up well if you have to show them to your customer. The best place might be online, or at least on your computer. Use spreadsheets if not a farm management system like Farmbrite or just simply spreadsheets.
Not only will keeping organized records make you look more professional and organized in front of your customer, keeping organized records shows you clearly where you're making money and where you're taking a loss. How did your orchard produce last year? How about your bees or cattle? How much profit did you make overall? How much did you spend on feed? When did you last check for parasites? How many animals have you lost to them? How can you do it better? This is why you keep records. Keeping records also helps you track of things you're going to forget. Like when you last changed the oil in the tractor? It's not the fun part of farming but it's necessary. If you don't write it down, those things will disappear.
Mistake #7: Not selling your brand identity
If you sell a product to a customer they want to know about you. They want to know your story, why and how you grow the produce or livestock you do, who you are and what you stand for. This makes you unique to your competitor down the street that might not be telling a very compelling story about themselves. This is what is unique about you and your farm and you should tell that story so others can come on the journey with you. Here is an in-depth article about building brand identity.
There are lots of ways to miss in business but there are even more ways to succeed. I hope that you will take a few of these mistakes to heart as you start your farm business. Be yourself, have a plan and take small steps as you go and you'll do really well. Best of luck to you and Happy Farming!
We all speak agriculture. Here are some additional links to other resources from all over the world that might give you additional information and help as you get started:
40 maps that explain food in America
USDA: Beginning farmer information
Beginning Farmers: Info on getting started Small business information for farmers Young farmers: Information for small farmers in the UK Small farms international : The future of International farming Farm Africa: Agriculture in Africa