There are many aspects to farming that need addressing in order to be successful. To me, the most daunting of them all is the business-side of it all. I don’t really have much experience when it comes to business management so this is where I likely need to devote most of my time during this transition. Fortunately, there are many resources that offer assistance and direction when trying to assert the ever challenging crunching of the numbers. A few organizations that I would recommend would be The Young Farmers Coalition and the Farmer Veteran Coalition. These folks will set you up with plenty of information to get you started. Feel free to check out my post titled, “The Many Coalitions” to learn a little bit more. Another resource that is valuable is Enterprise for Equity.
For those that are interested in agriculture, they do have a specific “Agri-Preneur” program which is a three part program to give you the tools needed to understand farm-focused business. Personally, I have yet to register and attend due primarily to scheduling conflicts, but it’s certainly one of the highest on my priority list. Once you finish the program, you also have access to certain perks such as different rates on micro-loans and mentorship. This truly seems like a valuable tool and would encourage anyone to take advantage. Those of you who don’t have an interest in agriculture, they also offer general business programs as well an “Art-Preneur” program which I would imagine is essentially the same as the agriculture focused program in regard to mentorship, and various perks.
The resources that I have been using are mainly from books. Typically I’ll cross-reference from the few different books that I have. Here are the ones that I’m currently using: Crop Planning for Organic Vegetable Growers by Frederic Theriault and Daniel Brisebois, Fearless Farm Finances by Jody Padgham, Craig Chase, and Paul Dietmann, Sustainable Vegetable Production From Start-Up to Market by Vernon P. Grubinger, and The Lean Farm by Ben Hartmann.
Although there is great information in all of these books, I find the most use out of Crop Planning for Organic Vegetable Growers and Sustainable Vegetable Production From Start-Up to Market. One of the major differences that I’m experiencing from the beginning is the fact that I’m working to procure a financially viable business with models and markets already in play. However, I find it important for myself and Zack to start from the beginning, as if this were a business starting at step one.
The two books I listed are the one’s that I cross-reference the most. Whenever I’m working on running numbers for a budget and such, I’ll have these open. The Crop Planning book is light, quick, and easy. It’s to the point and helps you understand in more broad strokes. The Sustainable Vegetable book is a little bit more in-depth and detailed which is fantastic when needing a little more insight as to “why” the decisions being made are important.
I’m now going to get into a little bit of detail about some of the early steps Zack and I have made in trying to hash out a budget.
First, we began with labor. We tried our best to come up with a wage that would work best with everyone which in most cases reflects experience and skill. In establishing labor costs, we decided to estimate costs and set them as salary for budgeting sake. With all of our employees, both part-time and full-time, we predict around $200,000 in costs. The typical word of advice is to double this amount to account for the rest of the years expenses. Doing this leaves us with a projected $400,000 goal to cover our total expense. Fortunately I have past Profit and Loss statements, and Balance Sheets, to make a rough estimation on what we can plan to spend on other facets of farming such as fertilizers, supplies, and fuels.
After we established our projected expenses, we estimated our total gross income with a 500 member model. Basically, to determine this, I looked at our 2018 member subscriptions and scaled it down to fit our scale. This left me with:
Large Shares – 60 Members @ $47/Share
Medium Shares – 255 Members @ $36/Share
Mini Shares – 185 Members @ $31/Share
We also added our three largest “add-on” shares. Fruit, 170 members, $25; Flower, 50 members, $15; Storage, 30 members, $55 (one-time).
When we add these together after multiplying Members by Price then multiply that by the number of weeks (20 in our case). We then added the final Storage share at the end since it’s a one week share. This left us with a total projection of $456,350!
We were very excited for these results and hope that we can make this a reality. This is only a portion of our plan so far, and it’s coming together smoothly.