What is farm management?

Farm manager - farm management - what is farm managementI came across farm  management when I was researching my how to get money as a new farmer post. At first, I didn’t think it was that important. I mean as a new farmer, how much are you  managing. In reality, if you have created a business plan, you have already started managing your farm.

What is farm management?

It doesn’t need  an epic plan. It  needs a direction that you want your farm to go into. It is how to best manage the skills you have, to meet the goals you set.

It is about identifying the gaps that you have as a farm, and addressing those issues. It is about seeing what other farms are doing, and seeing if you can do it better by setting goals and measuring results.

You can take a fun approach to management. You can think about things like what are we doing? How can we do it better? What are you good at?

When you are new farmer, your management plan gives you the opportunity to sit down and check what you’re good at , and what you’re not. It allows you to  make decisions based on your strengths and weaknesses. This is an opportunity to talk to your peers about your management plan. Because you’re starting from scratch, getting a friend to look at what your plan is  important. Your peers can give you ideas about things you never thought of, and can help make your plan stronger

Questions to ask yourself about farm management:

  • What are my strengths?
  • What are my weaknesses?
  • What are the areas I am missing in my plan, and how can I fix them?
  • What is my competition doing?
  • What can I do better?
  • What are my goals?
  • What am I doing to measure results?

Farm Management Canada is also a great place for a number of topics about management.

As a young farmer, where do you start?

It’s about identifying the gaps that you have at your farm and addressing them. You need to think about your farm as a business. This is where it really comes to play. By thinking about your farm as a business, you will treat it as such, you will do things like a SWOT analysis, which helps you find strengths,weaknesses, opportunities and threats.

It’s also about setting goals. Think about using a business tactic like SMART goals. Smart goals are about setting goals that are specific, measurable, attainable, relevant, and timely.

According to Joe Dickenson one of the most important things you can do as a young farmer when creating your management plan is, to talk to other farmers. Talking to your peers is a powerful tool. It gives you the opportunity to check your plan. You will get different perspectives, new ideas, and a second set of eyes. This is another reason community and farming go together.

When it is all said and done, it boils down to having direction. As a new farmer, if you have made your business plan, you should already have an idea about where you want to take your farm.

Does every farm need a farm management plan?

Not every farm needs to have a management plan written in stone, but every farm needs to have some sort of plan.  As I mentioned before, having direction is important. You don’t have to have your whole plan down on paper, but if you do, it shows you exactly where you want to be.

As a new farmer, you’ll need direction. Because you are starting your farm from scratch, knowing the direction for the plan is very important.

Let me reiterate, not every farm needs a plan written in stone. All you need to have is a direction that you are heading.

Farm management on a large-scale

When you are dealing with a large-scale farm, it becomes much more important. You need to manage your staff, you need to manage what type of crops to choose, you need to manage your investments, and need to manage yourself.

However, in our case we are just new farmers, so it is unlikely that you are dealing with a large-scale operation.

What do other farmers have to say

I recently had a chat with Joe Dickenson from Dickenson Farms and Lyndsey Smith from RealAgriculture.com.

I asked them the same questions I discussed here.

  1. What is farm management?
  2. As a young farmer, where do you start with farm management?
  3. Does every farm need farm management?

Here’s what they had to say:

If you can’t see the video, click here.

A couple of the organization that Joe mentioned were: Junior Farmer Association of OntarioFédération de la relève agricole du Québec, and Canadian Young Farmer’s Forum.

Measurement

One aspect that we talked about in the video was measurement. Measurement doesn’t necessarily mean you need to be crunching numbers all the time. What it really means is, having an idea about results. Think about return on investment.

Questions about measurement:

  • Did I get enough bushels per acre?
  • Did that tractor I bought perform well enough?
  • How can I improve the yield of my crops?

Thinking about the results are important. If you have direction, but you don’t measure the results, why bother with the plan.

Consider this information when you are creating your farm management plan.

Are there other things that you are going to consider when you make your plan?

Further reading for new farmers

 

 

 

 

How to write a business plan?

How to create a business plan - how to write a business plan

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photo from Nemo on pixabay

I recently found out that if you apply for a Canadian Agriculture Loan Act loan you need to write a business plan. I found this out when I was doing research for my how to get money to start a farm post. It makes sense because they are offering you half a million dollars to start your farm. Why wouldn’t they want you be serious enough to write a business plan? So because I found that information out, I am now writing this post about how to write a business plan. I am going to get information that will pertain to the farm because hey that is what we are talking about here.

A business plan is basically a map of where you are going to go with you business. It lets people know where you are and where you going. Therefore, it is very important to write a great business plan, so that you will be able to get the money you need.

How to write a business plan for a farm

A business plan is going to focus on a few things.

  • A great summary of what you are proposing.
  • An overview of the business’ aims. In this case it will be the farm’s aim.
  • A summary of what the product or service is going to be. If you are going to produce vegetables or do the farmer’s market, you want to talk about that.
  • A management breakdown. In our case this doesn’t really apply unless you are starting a farm with multiple people.
  • A financial forecast which include market research or product information. Do you have to do market research as a new farmer? I am not sure about that one.

A business plan is going to be broken down into parts. From what I can tell, it is very similar to an essay.

There is going to be an introduction.

  • Here is where you put the summary of the details of the business. In this case it is going to be your farm.

There is going to be body.

  • Things you want to cover in this sections.
    • What are your business goals, so in this case it is going to be what do you want to do with your farm. i.e are you going to be doing cash crops, livestock or agriforest.
    • What your business is going to do in laymen’s terms, so it is crystal clear. Here you can talk about what particular things your business is going to do differently. (I am not sure if this would actually apply to a farmer, but it is worth noting.)
    • What the market is like for your business, so you should take a look at your competitors. (Again not sure if it applies to farmers.) You would also outline who you are targeting, so think about  a farmer’s market, restaurants or co-ops.
    • What your financial forecast will be like.
      • Here you are going to talk about what your strategy is going to be, for example, how are you going to be able to pay the money back.
      • You can also talk about how you are going to price things. Think about goods you are going to sell and for how much.
      • Also, talk about which markets you are going to focus on, and if you have any plans to do some advertising. In some cases a farmer might do some advertising if they sell goods right on their farm.
      • In your financial forecast, you are also going to identify who your key personnel is going to be. Outline what their experiences are, and how many employees you might need.
      • In this section, you might want to identify where you are going to be located.
      • Talk about any special equipment you might need. This is particularly important for farmers because depending on what type of farming you are going to do. Think about what type of equipment you will need based on the type of farming. For example, if you are going to have potatoes, you need a special harvester.
      • Specify how much money you want from them.
      • Establish what the key risks are and how you are going to address them.
      • Talk about what you think your numbers are going to be, so how much you are going to make.
Finally, there is going to be a conclusion.
  • Here you are going to highlight the key points of what you talked about.  In most case, it is going to be about the numbers: how much you want, how much will you make, and when can you pay it back.

This gives you a good idea how to write a business plan.  I am not an expert in business planning, so I did do some research for this particular post. I got some information from the BBC strangely enough.   I also found a way more in depth ‘how to create a business plan’ at the Small Business Administration in the United States. Also, FCC provides a business plan template to help farmers. This is one of the keys factors in the possibility in getting a loan from FCC.

Having said that, here is what is consider business plan essentials.

  • Management background.
  • What are the business goals.
  • An assessment of the competition.
  • Research that backs up what you said the forecasts will be.

Conclusion

Writing a business plan is hard work, but if you want to start farming you better be ready for hard work. I know it isn’t the same kind of work, but it is a necessary part of the process to get the money you need to start your farm business.
What things are you going to include in your business plan?