Psyche Yourself Up About Farm Business Planning

but don’t psyche yourself out

Aspiring farmers who are led through lengthy self-assessments to explore their farm dream do a lot of soul searching. Traditional agriculture training programs have made a fetish out of visioning, self-analysis and planning.

Maybe you, too, have gotten the emails of rainbow hued sunsets over a verdant field. One recently was an invitation “to explore the farm dream that promises a journey to explore, organize, and evaluate many of the exciting and unique business and feasibility-related steps necessary to launch a successful agricultural farming business.” You’ll be guided by a roster of experts that includes an agricultural banker. If that makes you queasy, that’s a good sign. Savvy marketers know to “sell the dream”, and this email came from a state-funded education agency. Their particular model of farming is one that’s been pushed by both government and sustainable agriculture groups for decades. It might not be right for everyone.

Time-consuming paper exercises and detailed 3 year plans bear little relation to how effective you’ll be at growing vegetables or running a business. Long wordy business plans don’t necessarily indicate an understanding of what is most likely to determine success. Borrowing money before you’ve put a shovel in the ground can dig you into a financial hole you can’t get out of.

Working with hundreds of new farmers over the years, I’ve heard lots of different reasons for wanting to start a farm. I haven’t heard a bad one yet. What I do hear is many aren’t ready to take on the traditional farm commitments of owning lots of land, investing piles of money and making a big lifestyle change. Some are more risk adverse than others. Most don’t come from farming families. Here’s usually what they do know.

They like working outdoors; they like physical work; they like the idea of providing a product everyone wants and needs; they see lots of people flocking to the farmer’s markets, specialty grocery stores and neighborhood restaurants, so they think they would like to try farming to see if they can maybe make a business out of it.

What startup farmers need to focus on in their business planning is how they will make money, and that is what they need to be able to make clear to themselves. That can be thought through on the back of a napkin as follows:

> List your start up costs. Keep them as minimal as possible.
> Decide on the number of your marketing weeks, which is the amount of weeks you will have products for sale. Novice farmers plan on 20–30 marketing weeks to keep the work load manageable while mounting the learning curve and juggling other commitments.
> Set a benchmark income figure. The benchmark for novice SPIN farmers is $500/week gross for 20–30 marketing weeks, for total first year income of $10k — $15k.
> Sound too ambitious given what else is going on in your life? Half the amount of income and the number of marketing weeks.
> Divide total income by the number of your marketing weeks to get your average weekly income total. That’s targeted weekly cashflow.
> Budget overhead at no more than 10% of your total income.

What you now have is a framework for pacing and measuring yourself, keeping yourself honest, and eliminating unpleasant surprises, since you can evaluate and gauge your success against your starting benchmarks as you go through the season and make adjustments. At the end you can reset benchmarks based on experience for year two.

For feedback on what is mission critical to your business success, spare me your psychological profile. Use your energy for digging deep into your garden beds, not your psyche. Just show me your numbers.

SPIN stands for s-mall p-lot in-tensive.
SPIN Farming is a commercial production system designed specifically for growing spaces under an acre in size. It was developed in the mid-90’s by Canadian farmer Wally Satzewich. Those who practice it use gardens, community plots and vacant land to start and operate moneymaking farm businesses that serve the needs of local communities.