Making Your Small Farm Profitable :: Chapter 6 Book Report

Farm goals and planning were the topics for chapter six of Ron Macher's book, "Making Your Small Farm Profitable". This seems to be a pretty popular topic in the small scale farming periodicals, books, seminars, and even blogs I guess (since I have mentioned it a few times). I think the emphasis on goal setting, building a business plan, and holistic management is one of the things that sets new smaller scale or un-conventional farmers apart from the bigger conventional farmers. Not that they don't have goals or a business plan, but rather that it is more often based on what the neighbors are doing instead of what would work best for the farmer, the family, and the farm.

Mr. Macher takes a little bit different approach than some of the other books or articles I have read on the subject. Carol Ekarius in, "Small-Scale Livestock Farming" takes quite a bit of time explaining planning and management. That book, which I have read and will post some book reports on later, is full of the whys and hows and nuts and bolts of how to go about writing and planning. Mr. Macher gives a brief introduction on planning and goal setting and ends the chapter with some thoughts on achieving your goals and developing a farm plan. Sandwiched in between is a set of sample goals. I found it pretty interesting to read these hypothetical goals and his thoughts on each one. Also, he broke the goals down into groups of ... "Long-Term Goals" ... "Medium or Intermediate-Term Goals" ...and... "Short-Term Goals"

I thought I would choose one from each of the sections that stuck out as I was reading. Remember these are not my goals ... but they do make a lot of sense to me...

• Long-Term Goal: We are from the city, so I will work part time for a farmer, maybe on weekends, to learn basic skills and ask questions, questions, questions, so that I can gather an idea of what I want to do. I will work for free if necessary to achieve this goal.

-I think that is a great goal for the beginning farmer and I do it as often as I can when I go and work for my uncle and other family. That isn't any better learning that doing around someone who does ... or something like that


• Medium or Intermediate-Term Goal: I will purchase breeding stock, machinery, buildings, and such on as low-interest loans with 3- to 5-year terms.

-Debt sort of scares me like the plague ... we have never had any, and I think we would be perfectly happy to live our lives without any. But, with that being said I know that there is a place for debt when managed and accounted for properly. I think one key to handling debt is to have a good set of goals and a great business plan in place. Not just a good enough business plan to convince the banker ... but, something good enough to convince yourself!


• Short-Term Goal: We will figure in time for rest and recreation this fall.

-I think the reason that this one stuck out in my mind is because it is something that I'm not very good at doing. We have not taken a vacation or real break from my job in a long time ... it is just something that has been difficult for me to do for many reasons. But, after writing about the "farmer burnout" article, and looking at my own life I think this is an essential goal for the small scale farmer ... or anyone!

Does your farm have business plan (no matter how big or small)? Does your farm have goals? Were those goals put down as an entire family? All good things to think about, and questions I asked myself after reading the chapter.

More Thoughts on a Business Plan...

Yesterday I posted a portion of an article about creating a business plan. That information comes from Penny Huber who leads a class called, "Growing Your Small Market Farm." I am realy awaiting a brochure for this coming years class and praying that it doesn't take place on Wednesdays! I thought that little section that I posted yesterday was eye opening for me ... when it comes to a business plan I am clueless. (Hmmm, kinda sounds like me and farming.)

I found the "myths" and "facts" interesting. When I take a step back and look at myself I see that communication is not a problem, work ethic is not a problem, even farming ability (or the capacity to learn) is not a problem ... but, I have been scared of the business part. I feel like if I can get started down the marketing path I can do that, but I have wondered if I could ever tackle the business side. It was reassuring to read that it is possible to learn how to be an entrepreneur. Hopefully I will be able to learn some of this from Penny Huber!

As I mentioned yesterday, points number two and three resonated most with me. Point number two says, "The business planning process must involve everyone in the family and/or business." This is very important to me because becoming a beginning farmer is a very big step emotionally and financially. In fact, with our Dexters we have already taken a large step along the way. I think it is very important that my wife and I are on the same page as we look at how the farm will work and how it will pay. Another factor is my father and step-mother. Right now that's where our cows live and possibly where farming could take place so it will be important to have them on board with any business plan we formulate.

The second point is as follows, "The business plan must reflect reality. 'Interview other people already in the business to get their input.'" Since I got this farming bug in my system I have tried to seek out sources of what is actually working. I have read books, magazine articles, and research reports. I have talked on the phone with farmers, I have had e-mail correspondence with people making their farm pay their salary, and I have visited local farmers who are farming full-time or working towards it. This research has been helpful because it adds reality (to steal a word from the quote) to the ideas that are bouncing around in my head. Also, I hope to make it out to more farms and see what is working for people in Iowa. (Hmmm... Sugar Creek Farm ... do you accept visitors!?!)

That little article that I quoted in my post yesterday was a good introduction to a farming business plan for me. I would like to investigate this further and will be searching out people to talk to and information to read. Here are a couple of books I was thinking about checking out via inter-library loan. If you have any thoughts on either of them I would love to hear your thoughts.

Farm Fresh : Direct Marketing Meat & Milk by Allan Nation

Making Your Small Farm Profitable by Ron Macher

A Business Plan?

Do you ever feel like you are out of your league. I'm a high school soccer coach at a school that doesn't place a lot of emphasis on a sport unless it ends with ball (football, basketball, baseball, and softball). We don't have the greatest equipment, but we make do with what we have. I know for a fact that when a team shows up at our place with matching warm-ups, bags, water bottles, shoes, and more my team feels like it is out of its league! Well, whenever I read about or start to think about a business plan I feel like I am out of my league.

But, I feel like a business plan is an important part of any farming venture that I want to be involved in. I want to have an idea of what I'm getting into, what it's going to cost, what I need to return, what I can invest in, and how much I need to sell. So, last night I did a little "googling" to see what I could come up with. Below is a section from an article about the 2004 Practical Farmers of Iowa Conference. If you would like to read the article in its entirety you can click HERE. Below I have copied the section that specifically speaks to farming business plans in general:

How to develop a workable business plan

When you run your own farm, you’re an entrepreneur as much as a producer. That means you need to understand business planning 101, said Penny Brown Huber, program administrator for Iowa’s Growing Your Small Market Farm Business Planning Program.

“Entrepreneurs are innovators,” Huber said. “They have a strong desire to create something new. They also have a vision of how their business will grow and a plan to make it happen.”

She presented these contracts between popular misunderstandings, and what she knows about farmers and entrepreneurs:

Myth: Entrepreneurs are born, not made.
Fact: Almost anyone can learn business skills.

Myth: Entrepreneurs are their own bosses.
Fact: Entrepreneurs work for many people, including investors, bankers, customers, employees, and family.

Myth: Entrepreneurs set their own hours.
Fact: Entrepreneurs work long and hard for their success.

Myth: Entrepreneurs love high-risk ventures.
Fact: Entrepreneurs look for ways to minimize risk.

Huber gave these steps, and comments, for successful business planning:

1. The business owner assumes the lead in the business planning process. “You can’t expect an Extension agent or someone else to write your business plan for you.”


2. The business planning process must involve everyone in the family and/or business.


3. The business plan must reflect reality. “Interview other people already in the business to get their input.”


4. Develop contingency plans for worst-case scenarios. “If you get sick, a building burns down, a hailstorm destroys your vegetable crop, or your livestock get infected with disease, you have to have a plan.”


5. Set objectives and goals that are achievable. “Two to three strong, clear goals and objectives will really help you move along,” Huber said. “Your first goal can be, ‘I will write a business plan.’ Your objective can be, ‘I will write my plan by Dec. 1.’”


6. Include innovative marketing ideas. “Developing recipes that feature the foods you raise can be a great way to promote your business.”

Once your write your business plan, review it often and use it as a guide.

I thought the article brought up some good points for a total business plan beginner like myself to think about. I don't want to make an extra long post here, but I will comeback tomorrow with some of my thoughts on the article. Let me just say the points that really hit home with me were numbers two and three. One of my major reasons for farming is the family aspect ... my family and the families that we will sell to. And, I am all about learning from the experience of others. In fact, that is what a majority of the posts on this blog of mine are about, learning from others. I would appreciate any thoughts on business plans in general or more specifically farm based business plans.