Updated: Jan 17
It’s no secret that farmers are the backbone of America, growing the ingredients that put food on the table and clothes on our backs. At Friendly Meadows, we want to see grain farmers thrive, so here we offer our first in a two-part series that will make your operation that much more successful:
1. Build positive working capital and short-term risk bearing ability.
It’s hard to run a business without working capital. So always ensure you always have positive working capital at all times.
As a business owner, it’s your duty to keep a close eye on your company's working capital. This will help you make sure that you always have enough cash on hand for daily operations. If your business is constantly running low on cash, it could be indicative of an issue with how you manage your finances.
Working capital is the amount of money that's available to pay for normal operations, including payroll and other expenses. It can also be used for expansion or cover periods where revenue is lower than it should be.
2. Pursue additional income sources.
Outstanding farmers don’t let their income streams go stagnant. Additional forms of income may be found on-farm, such as diversifying with livestock or taking on more custom acres. Or, an off-farm job can also be a good source of stable income. But there are many other ways to increase your returns for the time you spend farming or managing your land. Outstanding farmers take advantage of every possible marketing tool and haven’t stopped marketing just because they got another tractor, combine, or piece of machinery.
Farmers market sales
Sell farm products at farmers markets and other direct-to-consumer venues. “There is a large market for natural, organic and healthy food locally in the small towns where many commercial farmers also attend these markets. I always sell out of our produce at local farmers markets and sell more there than on my own farm. The network of customers is great, both locally and regionally,” according to Leading Edge Farm.
3. Develop solid financial acumen:
Acumen is the ability to make good judgements and quick decisions. This requires thorough record keeping and a solid understanding of your farm’s financials.
The financial records for your farm are critical to your success. They can tell you everything from how much feed you need to buy and what type of fertilizer is the best for your soil, to whether or not you should invest in an irrigation system. But proper record keeping takes time, and with all the day-to-day duties on a farm it can be hard to find time in a busy farming schedule.
What you need is a system that will allow you to record important financial data in an easy, efficient interface. This ensures that you can get the most out of your records and that they are kept accurate and up-to-date.