The farm business is not for the faint of heart. The long days, unpredictable weeks and challenging years require a level of perseverance and dedication few other industries demand. That being said, those who choose the profession find the rewards far outweigh the struggles. With the right mindset, support and advice, those new to the business can be prepared to reap these rewards.
1. Pay Your Dues
Most people don’t just wake up one day and decide they’re going to venture into a business they know nothing about. But experience is especially important when it comes to farming. Whether you’re helping out on your family farm or employed by a major operation, you’ll want to put in about five years before striking out on your own. This gives you enough time to understand both the good and bad years before determining if it’s the right path for you.
Beyond the years spent in the field or the barn, it can be helpful to have experience making management decisions. As an owner, the choices you make every day will impact your operation, so you’ll want to make sure you’re comfortable with tough calls.
2. Clarify Your Vision
The biggest mistake a farmer can make before venturing out on their own or even expanding their operation is not having a vision for the future. Why do you want to get into farming? Why do you want to grow the business? What do you want your future in farming to look like? Not just today or next year, but into retirement? If you can’t articulate why this is the industry for you and what you want to get out of it, you might not be ready.
3. Set and Document Your Goals
Beyond knowing your vision, it’s important to set measurable goals for the business. Write down what you want to achieve in a set timeline. Do you want to pay off X amount of loans in your first year? Improve overall margins by X in the following year? Grow by X percent in the first five years?
Write these goals down and use them to guide key decisions. Every few months, check in with your goals and weigh them against the performance of your operation to make sure you’re on track and ready to expand as opportunities arise.
4. Get to Know the Numbers
When times are good and prices are high, it can be tempting for farmers to just focus on the fields or livestock and forget about the business side of things. But the most successful farmers know their business inside and out. They know exactly what they owe, their margins and what it’s going to take for them to break even at the end of the season. This in-depth understanding of the numbers will ensure you’re able to survive when things get tight and thrive when you’re ready to grow.
5. Surround Yourself with the Experience of Others
The best thing a green farmer can do as they start their business is surround themselves with smart people who have the experience to know better. This circle should start with a mentor farmer. This may be someone from your family, a neighbor or someone else in your community. Anyone you can trust to answer even your most basic questions.
From there, you’ll want to connect with an accountant, bankers, insurance brokers and other partners who also have experience working with farmers. If these individuals happen to have farming experience themselves, even better.
6. Own Your Plan
Even with advice from a strong network of smart farmers and partners, the operation is yours. You’ll need to take ownership of your plan to run it properly. Especially when you’re asking for a loan to start or expand your operations. Your banker can ask probing questions and help you shape the way forward, but you need to come prepared to steer the discussion. You’ll be much more likely to get to the loan if you come in with a business plan, projections for the coming years, and a strategy for volatile market conditions.
7. Prepare for Risk
As we mentioned, and as you well know, farming is a risky business. There’s no way around it, but you can prepare for it. Choosing the right insurance coverage<link to Choosing the Right Crop Insurance Coverage post> can help you mitigate weather risks while the right marketing strategy can help you navigate the daily ups and downs of the market. Both require you to know your break even numbers and how to achieve them despite the risks.
8. Get Aligned with your Family
Farming isn’t just a career. It’s a way of life. One that will ultimately impact your immediate family just as much as it does you. Make sure you’re having conversations with your spouse about your vision and goals for the farm business and the risks involved. Determine where the family goals fit into this picture and make sure everyone is aligned before moving forward.
9. Be Ready to Commit
To be successful in farming, you’ve got to be ready for the long haul. It’s not a business you can dip your toe into and then flip in five years. Before you start your independent operation, take some time to work through this advice and consider what it means for you and your family. Make sure you’re ready to take on not only the business but the lifestyle in both the good times and the bad.