Road Warrior

Points of Advice for Young Producers: Part 2

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Last time I put on my thinking cap to discuss advice for young and beginning farmers and ranchers based upon conference sessions and interaction over the years with young farmer groups. Suggestions such as a good record-keeping system, enterprise analysis, a set of advisors and mentors, modest family living withdrawals, working with a relationship lender and sound time management skills were all included. Now, let’s expand the list.

Many young, beginning producers will start out with a business model designed to control assets rather than own assets. This has been a standard in the small business world for many years. Invest in assets that do not rust. During my class field trips at Virginia Tech and Cornell University, numerous times effective producers would reinforce the importance of high-quality land, livestock and money making assets. However, there is a new twist to the machinery and equipment aspect. The advances in technology and some of the other elements that technology brings are offering cost savings and efficiency. Time is a limited commodity for the younger generation, which is often seen multitasking. Perhaps a careful analysis of these strategies needs to be penciled out. Sometimes sharing machinery and equipment with others can be a strategy to reduce overhead cost per unit.

 

 

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As a young producer, be careful to avoid two sets of people: victims and know-it-alls. Victims will blame someone else for all their problems. Know-it-alls have forgotten how to learn. Both can be time wasters and a path to unproductive outcomes.

Yes, you are busy, in many cases working dawn to dusk, but do not forget about your education in this information-intense world. The metric is two to six hours of education per week. That can be accomplished by going to conferences, schools, or seminars, scanning the Internet, or networking with others in the industry. It is about what you know along with who you know, which, when combined, can be very powerful. Education and networking, sharing ideas and thoughts, are very important for a sustainable business model.

My favorite advice is to prepare and use a written business plan. Vision, core values and goals, along with an outline of operations, finances, risk management and human resources, can give you the competitive edge. Business plans are much more prevalent in the small business arena than in agriculture, but an increasing number of producers are now creating business plans. Going through the process assists in writing down your dreams and ideas, which can lead to a more productive business.

I hope to see many of you at young producer venues in the coming year. Next time you see me on the road, tell me the most important advice you received as a young or beginning producer.

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What's Road Warrior?

Dave Kohl is an ag economist specializing in business management and ag finance. He can be reached at sullylab@vt.edu.

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