A farmer who talked to me recently about the financial challenges many farmers face got me thinking about the English proverb “Smooth seas never made a skillful sailor.” He shared his strategy that has helped him the most – to be successful and to have the confidence he has today – wasn’t the years with good prices or bumper crops, but the challenging, uncertain years.
While farm diversity can offer many benefits, before entering a new venture, ask yourself a few questions about how it will benefit your farm, what problem it solves and what it will cost your core business.
There’s no slow season anymore! Farmers tell me that often. With crop and business demands, it can feel like the year is just one long string of activity without the spikes and dips we used to experience. With that said, every business – whether its seasons are set by the weather or not – needs to create and utilize an “off season.”
I was talking with a farmer a few months ago and asked him how many employees he had working there. “Oh, about half of them!” was his response. That’s a common sentiment among business managers, be it a farm with three employees or a manufacturing company with 3,000: Is everyone contributing to the cause?
If people are getting something done – mistakes are going to happen. The question becomes: What to do when a mistake’s been made? Since the 1940s, one of the most important assets on the farm has been the tractor PTO. The power and versatility it brought revolutionized productivity on the farm. Unfortunately, it also became a significant source of injury and death on the farm.
“You get more of what you measure” – a common phrase in business best followed by, “Be careful what you measure.” What can this mean on the farm? One of the easiest things we can measure on our path to building our farm is number of acres.
“How many times do I have to tell them?” “I told them about the change, so why didn’t they listen?” “Do I have to be everywhere?” The list of the things that can frustrate the farm leader is a long one. As the farm grows, think of ways to replicate our thinking in others to make sure the right things get done the right way.
In agriculture we rely on trust – farming practices we trust, suppliers we trust, and the list goes on. Often the trust we count on comes from familiarity or even just habit. One challenge with relying on trust that only comes from familiarity is that we can hold back from building new trusting relationships that could help us solve problems faced by a rapidly changing business.
“I don’t want to think about 2012 anymore!” These are words that have been said many times as we begin to look forward to the 2013 season. However, what we know about the most successful farms is that they take the time to learn from the past – even if it wasn’t fun.
When preparing the farm for the next generation, it’s easy to get wrapped up in the legal pieces and forget the most important one – succession planning. It’s the piece that, without time and effort, will throw everything off track for generations to come. Poor succession planning is the greatest estate tax of all!
To build a competitive advantage, we can learn from other farmers through peer networks, but there is a ready resource that often goes underutilized – our suppliers. We typically think of them in a transactional way, but with the right relationship, we can access more expertise, experience and ideas than ever before.