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.
1Make plans
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.
2Cash flow
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.
3Investments
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.
4Insurance 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.
5Support system
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.
6Focus
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.
7Be flexible
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.
Sources: “10 keys to a successful farm business,” University of California Cooperative Extension.
(Farm and Dairy is featuring a series of “101” columns throughout the year to help young and beginning farmers master farm living. From finances to management to machinery repair and animal care, farmers do it all.)
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Being flexible is SO important for success on the farm. I grew up on a farm, and there were always unexpected twists and turns happening, that I really had to learn how to be flexible and just go with the flow. All of these tips are great, and I agree with them! Thanks for this post! It resonates a lot with me!
You did a great job of explaining what needs to be done in order to run a successful farm. My brother wants to purchase some land so that he can start a farm. I think it would probably be important for him to get the right kind of fencing to use in order to keep animals from escaping his property.
It was helpful when you explained that farmers need to be willing to embrace flexibility and change their plans to make things work. My brother and his wife are planning to start a small farm later this year and are currently looking for a feed dealer so they can start purchasing large animals. I’ll send your article to them so they can use these tips to optimize their chances of success on the farm!
Thank you for your many suggestions on how to run a successful farm. I agree with you that it is important to have the proper licenses and insurance to make your business legitimate. I think it would also be crucial to find an effective water source for your farm so it maintains good health.