Strategies to Get There
What are some methods to increase your chances of financial success?
Examine your whole farm business and look for places where you think you could eliminate costs or increase revenues. Look first for solutions that won’t cost any extra money.
Marketing: the more skilled you are at marketing, the more likely you will be able to command a higher price and sell more product (volume). This means providing very high quality product, excellent customer service, selecting the right market channels, and charging a sustainable price. Visit the Selling What You Produce section of this site for resources on marketing, or continue with this tutorial to learn about Pricing Strategies.
Management: If you want profits that are better than average, you need to be a better-than-average manager.
- For example, with livestock, you can look at reducing mortality and disease, as every animal you lose comes right out of your profit. Sick animals do not breed or grow well, which will also take away from your profit. It may sound harsh, but good managers cull animals that consistently underperform or simply aren’t a good fit with your farm’s management systems. Culling doesn’t have to mean killing – you may be able to find a home for the animal, but keeping it as part of your farm will only keep you from being profitable.
- Combine or expand enterprises: The more units produced, the less the overhead costs per unit. If you combine or expand one or more farming activities, it may become profitable.
Reduce input costs: Analyze your inputs to determine what you can do with less of- or do without. For example- if you are feeding hay and grain to animals, could you be utilizing pastures instead to be more cost effective? There are many resources online for extended grazing into the winter; a search for these, combined with conversations with local graziers and/or your local Cooperative Extension may help you get on track to reduce feed costs.
Reduce labor costs: one of your highest costs could be labor. Using appropriate technology, using family labor, and having efficient job routines can help reduce labor costs.
Reduce ownership costs: It may make more sense to rent land and facilities. The less money you spend getting started, the more likely you will be able to cover you initial investment.