Last month I mentioned that there were more young farmers at our summer conference than ever before. It's great to see young people starting careers in farming. I think it will be rewarding and profitable for them.
We have counseled a number of beginning farmers through the financial and marketing risk management issues associated with starting their own businesses. For example, one couple from Nebraska is featured in this issue in “Growing Farmers,” page 15.
Jeff and Carly Johnson are a great success story. There are many others, but there are no silver-bullet answers or formulas for beginning a successful farming career. Everyone has a different set of skills and resources — that's what makes it so interesting.
Our observation is that profitability is not a function of size, enterprise or location of the farming operation. Profitability is more a function of leveraging skills in marketing, equipment cost management, labor management and agronomic management.
It's rewarding to see how many people return to the farm with a good education — in some cases an MBA — and a number of years of business experience.
I believe the best formula for a new farmer to be successful is to work somewhere else long enough to get promoted. That means they have the patience, interpersonal skills (especially the ability to get along with others) and the work ethic to be successful.
Spending time in another career also provides the opportunity to experience the hard knocks of life and deal with them. No amount of formal education can provide that experience.
Frankly, young farmers sometimes struggle when they've had it too easy — Mom and Dad provide too much without the right analysis, accounting and accountability.
For example, repairing equipment during the winter in a nice heated shop with all the best tools and not paying a share of that overhead is not an educational experience in paying one's own way in operating a business.
Moe Russell is president of Russell Consulting Group, Panora, IA. Russell provides risk management advice to clients in 20 states. For more risk management tips, check his Web site (www.russellconsultinggroup.net) or call toll-free 877-333-6135.
Are You An Entrepreneur?
Beginning farmers need entrepreneurial skills. Having started a business myself and having taught entrepreneurship at Buena Vista University, I have observed that entrepreneurs have several common attributes.
They are innovators and think creatively, especially with current and future technology.
They are risk takers. I describe them as mountain climbers, not gamblers. There is a difference. Taking calculated risks and managing the downside is critically important in an industry like farming where there is so much volatility.
Entrepreneurs are self-confident. For several years I encouraged my wife to start her decorating business and she kept saying, “I am just not the risk taker you are.” My advice was to think through the worst that could go wrong, and if you can live with that — go for it.
Entrepreneurs set goals. Few people actually set goals, but those who do greatly increase their likelihood of success. A study of 1951 Yale University graduates indicates that only 4% had written goals. Twenty years later, those with written goals had accumulated more wealth that the other 96% combined. Goals need to be written, specific, observable and measurable.
Entrepreneurs are accountable to themselves. When things go wrong they look in the mirror and blame the person they see, not the weather, the markets, the government, neighbors or family members.