Planning for Profits… Monitoring for Results. (Aka how much money do you want to make?)

Profits are often thought of as being what is left over once the expenses have been deducted from the sales.

But, what if there were another way?

What if you could decide how much you wanted to get paid this year?

Well… you can.

In fact, the act of deciding how much profit you would LOVE to make this year is the critical first step in running a profitable farm business.

The more our intentions are clear and well defined with ourselves and the ‘universe’, the more we are able to manifest our goals and vision with ease.

What we’re doing here is rearranging the way we think of the profit formula:

From Income-Expenses= Profits… to Income-Profits=Expenses.

So, what’s it for you? How much money would you love to make this year?

Now, I’m not talking about some pie in the sky/ pipe dream number.

Pick a number that is attainable AND is somewhat of a stretch….something slightly outside your comfort zone… A number that, if you reached it, would cause to to celebrate and bust out the champagne (actual or metaphorical). I suggest somewhere between 10-25K $ per full time farmer (or even up to the 50K $ range if you are further along on the profitability journey.)

Great ! Now look at what gross income you can realistically expect to sell this year… somewhere between 10-25% more than last year.

Now, let’s take a look back at our rearranged version of the profit formula:

Income-Profits=Expenses

We anticipate what we can sell. We decide how much profit we want. We then have a clear picture of what our spending budget is for the year and we go about deciding how that budget will be spent.

Make no mistake… our expenses are way more flexible than we generally realise. Being passionate about farming, it is all too easy to spend way more than needed. Especially given that all too often we have no idea how much we have spent so far this year versus what we were planning on,

So plan it out! Both by expense type and by month. (Breath) I find it to be very useful to add a safety margin to this cash-flow projection equivalent to 5-10% of planned expenses.

Super! So you have a plan… now what?

Monitoring cumulative income and expenses EVERY MONTH is the key to results!

We can’t manage what we don’t measure.

Yes.. This means keeping your books up to date.

But the more important step is to compare where you are at currently with where you had planned to be…. and take actions to correct any deviations. This often means being creative or frugal with what we purchase when we see that a certain expense category is getting ahead of itself. Yes, it’s cheaper per screw to buy the box of 1000 screws… but if your hardware budget is running low, you’re better off with the box of 100 screws if that’ll get you through the year.

Alternately, this can mean exploring new marketing avenues or putting more energy into existing ones… though the control of expenses is what is more often overlooked in my experience.

So there you have it. This process does take some effort up from to get it all set up and running, but I promise you the results will surprise you. Personally, this method not only boosted my net income up past 70K$ per year (as sole manger of the farm, working 40-55 hours per week, with 5-6 employee) but it also greatly reduced my anxiety around money and took the guesswork out of operating the business.

Go make a ruckus!

Setting the stage for growing great crops

The second system I would like to dive into as part of the 3S triangle is pre-plant system.

By this I mean all the elements that go into creating a hospitable environment to receive the transplants or the seeds that will grow to be your crop. The pre-planting system sets the stage for the effective cultivation of vegetable crops.

The components of the Pre-planting Prep System are:

  • Farm layout and design
  • Drainage
  • Irrigation
  • Crop rotation
  • Fertilisation
  • Tillage

Here are some useful questions to consider when taking a closer look a the pre-plant system.

Farm layout and design

  • How are the various physical elements of the farm located with relation to one another?
  • Spaghetti diagram of the flow of people and materials (ie the flow of energy around the farm)
  • Are fields areas split into equal sized blocks?
  • Are field borders and pathways mowed regularly?

 

Drainage:

  • Does the water table sit low enough under field areas so as to allow proper aeration of the root zone?
  • Does surface water flow away from cropping areas in a controlled manner?
  • Does rain fall percolate rapidly into the soil?
  • Can the fields be worked within 2-4 days of an average rainfall event?
  • Does surface water flow away from farm roads and infrastructure in a controlled manner?

 

Irrigation:

  • Does the farm possess sufficient water reserves to provide 1-2 inches of water to vegetable crop areas per week for a 6-8 week period?
  • Is surface water channeled and captured in retention ponds?
  • Can the entire crop area be irrigated within 4 days with ease?
  • Can irrigation be automated to provide multiple short interval irrigations to key crops?
  • Are crop appropriate irrigation méthodes used? (Drip tape, sprinklers, timing, amount?
  • Is rainfall and soil moisture monitored on a regular basis?
  • How are irrigation decisions made?

 

Crop Rotation:

  • Is there a systematic crop rotation?
  • What area of each crop family is cultivated?
  • At what frequency do the crop families return to a given block?
  • Are green manures integrated in a systematic manner?
  • Does the rotation decrease the presence of weeds?
  • Are targeted bare fallow or occultation periods used to reduce weed pressure?
  • Does the rotation build or deplete soil health and fertility?
  • Does the rotation include any deep rooted fibrous root systems?
  • Do you have enough crop land to implement the necessary rotation system?
  • Is the soil protected from erosion for the winter?

 

Tillage and fertilisation:

  • What is the bed prep sequence from start to finish?
  • Are soil profiles used to make decisions regarding the need for deep tillage?
  • Do tillage practices reduce or increase weed pressure?
  • Are stale seedbed techniques used?
  • Is deep tillage followed by deep rooted green manures to stabilize the work?
  • Is the source of fertility (compost, manure) introducing weed seeds?
  • Is the fertilisation regime increasing or decreasing nutrient levels?
  • Is the fertilisation regime balancing or unbalancing nutrient levels? (Especially K vs. Mg)

 

Quite a bit of food for thought… Bon Appétit !

 

Sticking to your goals vs. go with the flow… or both?

And we’re off!!

After spending the winter enjoying the abundant snow here in Magog, we’re hitting the road… shifting into nomadic mode… #vanlife 😉 First stop: Earthaven Ecovillage in North Carolina (www.earthaven.org)

Well, in fact, we were supposed to leave last wednesday, April 18th. We had set that date as part of the goal setting process (S.M.A.R.T. goals: Specific, Measurable, Attainable, Relevant, Time Based).

The thing is, last week rolled around and we just weren’t ready. It was Tuesday night, and there was still a long list of minor improvements we wanted to make to the van, our stuff wasn’t packed, and the house was a mess.

Goals are meant to bring us joy. The process of reaching for a goal is a playful one. Indeed, to take an example from sports, a goal is ‘the object towards which play is directed’… as in GOOOOOOOAL! By comparison, tasks bring you relief (as in completing your tax return is a task, not a goal). Thank you ACE for this great distinction (www.acecoachtraining.com).

So instead of forcing ourselves to achieve the goal we had set of leaving by april 18th, we realised that it would bring us much more joy to push back our departure date by a week… we have that flexibility, so we might as well enjoy it! Plus, it turns out the weather in North Carolina last week was really not great for camping anyways… and this week is going to be beautiful!

The key is to live intentionally, to make conscious choices in our life with full awareness. To be flexible with ourselves and to have the degree of self awareness and support necessary to discern between abandoning a goal out of fear vs. joyfully updating a goal to reflect the current YOU.

What goals do you have?

Are they S.M.A.R.T.?

Are the goals you have set for yourself in the past still pertinent today?

Do they bring you joy?

Paradigm shift for greater farm success and quality of life.

Someone much wiser than I once said, “If you want better answers, ask better questions.”

I love this! What I get out of this is the importance of being aware of what criteria are we solving for. If we set out to solve for “how can I make at least the bare minimum amount of money I need to survive from the farm while working however many hours in order to get it ‘all’ done?”… then that is exactly what we will go about solving for.

What if we asked a more empowering question?

What if we put our mental abilities to work solving for more interesting parameters?

Organic farmers tend to be a very smart and innovative group of people. I have no doubt in our collective ability to find solutions to whatever ‘problem’ is before us.

  • How can we earn a net income of 40-50K$ or more per farm owner while working less than 50 hours per week even in the summer?
  • How can I earn a sustainable net income of XYZ$ from the farm? (What would this look like for you? Cost of living, travel, retirement planning, your kids education… How much would you love to be earning from your business?)
  • How can we structure our farm so as to leave us feeling energized and available for the other areas of our lives?
  • How can we find balance between work and personal life?
  • How can we design a farm that does not depend on our presence to be operational?
  • How can I run a kick-ass farm and still be emotionally available to my spouse and children?
  • How can we take a 2 week family vacation in the middle of summer?
  • How can we eliminate weeds from the farm?
  • How can our farming practices be not only sustainable but regenerative?
  • How can we farm without relying on industrial animal manures for fertility (ie pelleted chicken manure… aka Acti-Sol)?
  • How can we create long term, fulfilling, well paid employment opportunities on our farm?

Now it’s up to you! What questions would you LOVE to focus your attention on?

Looking at this list, I find several questions that seem impossible to me. I wonder, “Am I being realistic? Am I setting the bar too high?”

The motivational speaker part of me (ahah, “part of me” = monkey mind symptom of fragmentation) says “hell no! Set the bar high and surprise yourself with what is possible. Every great discovery has come from the realm of the unimaginable… the unfeasible. Shoot for the stars, even if you don’t make it you’ll get to the moon”

The other part of me is saying “Don’t set yourself up for stress and overwhelm”

The thing is, I am grateful to be able to see this last paragraph as a monkey mind fest. The potential for feeling overwhelmed is always present regardless of what questions I am trying to solve… there is absolutely nothing about setting the bar low that guarantees less stress. The key is that regardless of what our goals are, we need to have the ability to release our dreams to the universe. To dream and envision an outcome while simultaneously accepting the present moment exactly as it is. Carl Jung reminds us that living with paradox is a fantastic part of the human experience.

Go on! Make a ruckus!

What empowering questions are you interested in solving?

How to plan your week in a way that nourishes all your roles.

Few people know it better than farmers… we all wear many hats!

Father/mother, spouse, you (ie. yourself…doing something just for you), friend, farmer, CEO/leader, marketer, bookkeeper, grower, plumber, carpenter, mechanic…. and the list goes on!

I used to regularly fall into the following pattern… focusing almost exclusively on one role until another role was totally neglected and couldn’t be ignored… then I would over-focus on that role for a while etc..

Of course this is normal, we are passionate people by nature. We dive into something wholeheartedly. But it doesn’t take much to shift this way of being towards a more balanced approach that nourished each of our different roles every week; or at least allows us to make the conscious decision to neglect one of our roles one week if that is our choice.

What are the major roles you play, what are your main hats? Think both in your private and business life.

I suggest that you plan out your week on Monday morning. List the various role that you will nourish this week, and make sure that you are doing something for each role every week. It doesn’t matter how small your action for each role is… just the knowledge that you are attending to even the more neglected roles can be a wonderful signal to yourself that all the facets of your life are attended to and advancing.

What is one action you are willing to take this week to nourish one of your roles that you have been neglecting?

Key Pillar of an efficient and effective farm: The Information Flow System

Alright! Let’s loop back to continue the discussion of the third leg of the 3S triangle.

I’ve always loved planning. The problem is that these ideas aren’t worth shit if they stay stuck in my head!

What I realised when I started the farm, was that no matter how clear the ideas and plans were in my head, I needed to be able to communicate them effectively to my wife for us to work as a team. This challenge was only exacerbated when we started having employees and the farm crew grew and took on more and more tasks that I had been doing intuitively.

I’m not saying anything new here…. we all know the importance of good planning, effective communication, and record keeping.

The thing is…the time has come for us to consider the flow of information as a cohesive and crucial farm system.

The information flow system is connected to all of the other farm systems. With a well functioning information flow, the farmers and farm staff knows at all times what needs to be done, where, when. In addition they have the means of recording for and communicating this information to the other members of the team. The recorded information serves to get all the staff on the same page, meets Organic or GAP Certification standards, and serves to refine the following year’s planning.

The information flow system is a cycle involving: planning, communication/implementation, record keeping, and data analysis/feedback loop.

Planning:

This is where you get the ideas and information out of your head and onto paper. Key elements are: Crop plan, 2-3 year business plan, financial plan/cash-flow forecasts, fertilisation plan, clear and labeled farm map, and standard operating procedures for common farm tasks.

The idea is to shift some of the work from the busy summer months to the winter. The better our season is planned out during the winter, the more we can focus on the actual implementation during the summer

Communication/Implementation:

Now that you’ve go these plans onto paper… how are the people in the field going to access the information when they need it?

The key is to have the necessary information available right where it will be used. So…plastified charts taped to the wall in workstations, dedicated binders in the greenhouse, in the direct seeding action pack, on the tractor, etc. We need to be able to access it immediately, not have to go up to the barn/packshed to get it from a central binder…. or even worse.. running after the farmer to get some important detail out of her head.

The other element of communication regular crew meetings, and the use of written task lists rather than oral instructions.

Record Keeping:

Do not gather excess data! Record keeping takes time and excess data reduces the chances that any of the data will ever actually get used.

What questions are you seeking to answer?
What data do you need to gather in order to answer those questions?
What data are you required to gather for fiscal or third party certification processes?

Data that will be processed goes directly into a cloud based spreadsheet whenever possible to eliminate the need for data entry (which is a tremendous barrier to the data ever actually being used).

Record keeping materials (computer or paper) located directly where the activity takes place.

Keep a pen tethered to all paper based record keeping locations (a pen taped to a piece of baler twine and stapled to the wall does a great job).

Allocate time in the day for staff to keep records up to date: record keeping takes time and this time is profitable.

Data analysis

Ok.. so you’ve got all these records.. now what?

Records exist mainly to inform future decision making processes. To facilitate this we need to reduce the manual data processing as much as possible. Structure your spreadsheet based record keeping systems to automatically process data whenever possible. (Ex: Automatically calculate yields as you record harvest). Also, Structure your spreadsheets to be able to easily filter the data so as to be able to find the needed information for different purposes.

So… what next?

I invite you to get out a piece of paper and map out the flow of information through your farm systems.

Where are the bottlenecks?

Would the farm crew have all the necessary information to function without you for a week?

What would you love to do during your mid-summers vacation week? 😉

What is your farm for?

No.. seriously, what is your farm for?

It’s not for feeding people that’s for sure (come on… let’s face it, if it costs $0.12/lb to ship vegetables from california…. local farms are not actually about producing food to feed people).

So… what does your farm produce and why do the people who consume that value it?

I’m not just talking about physical, tangible products here….

I’m talking about what’s really going on.

Small local farms produce: happiness, fulfilling lifestyles, vibrant children, un-excelled flavours, textures, and smells (no not the farmer’s armpit), freshness and prolonged shelf life, connection and understanding, a sence of environmental responsibility and stewardship, freindship, laughter, status and status symbols, nutrients, vitamins, beauty, diversity (both in terms of rural cultural diversity and in terms of biodiversity).

Even the food that the farm produces for a client is not just food… the client is buying a story… a story that we tell them, and a story that they tell themselves; and that story certainly includes several of the element mentioned above.

Some of these products are for the clients, and some of these products are for the farmers themselves.

So… your turn now! Leave us your answer in the comments section below: What is your farm for? What does your farm produce and why do those who consume that value it?

Write it up into a farm vison statement! Post it on your wall, in the wash station, in your office…. Advertising works; advertise your own vision to your self!

Savouring the experience of the moment

I personally have never been one for perfectionism and have always embraced the motto « Good enough is perfect ». This is not to say I aspire to poor quality work, but rather that ‘done’ work is way better than ‘perfect’ or ‘excellent’ work… I might even go so far as to say the ‘done’ work is better than ‘good’ work. The fear of producing mediocre work is too often a break, preventing people from even getting started on the creative process. The standards we set for ourselves of what would constitute ‘good’ work are often so high that we barely even dare start upon the journey, lest we break ourselves against our ideals.

I use « Good enough is Perfect » all the time as a tool to accomplish more. It has been my method of kicking ass… or as I recently heard, of ‘barrel assing’ my way through life. Build it and move on the to next project, barely taking time to acknowledge myself for my accomplishment and always hyper aware of how it could have been better and how the next iteration will be an improved version.. It’s like standing before a beautiful field of vegetable you have grown, and only focusing on the 10 weeds present.

What if there were another way of seeing « Good enough is perfect » ? What would if be like to look at a piece of work or a project, be satisfied with it’s condition, and actually acknowledge ourselves. As in « wow! This is good enough, let me savour this moment of accomplishment. » What a sweet experience that would be!

So, to all me fellow  « ass kickers », let’s slow it down a notch. We have nothing to loose but our angst! Let us enjoy ourselves and savour the present moment all while kicking ass and bringing our creative visions into reality!

 

Letting go of dreams while going for them 100%

Clearly defining our dreams, visions, and goal is a tremendously powerful action towards living the life we want.

But there is a nuance here! Don’t let your dreams ruin your life.

When I was 21 years old, Jolianne (my spouse and business partner) and I developed and articulated a very clear vision of what our dream farm was going to be like. It was going to be 100 acres of hay, pasture, grain, and vegetables all in rotation. There was going to be animals too: draft horses to do the farm work, pigs, cows, sheep, chickens… and with 3 wild naked children running around, playing in the mud and getting into all sorts of mischief.

Now, don’t get me wrong… I love this dream! What happened though is that as the years went by, I did not allow myself the flexibility to adapt this dream. We launched our farm straight out of university and commenced to build a business that would allow us to buy this dream farm. Thankfully, we were able to launch our business using a rented farm. Along the way, I realised that 100 acre farms in our area weren’t selling for 350K$ anymore…they were selling for 5, 6, or 700K$. Add on the cost of the needed infrastructure and it was clear this was going to be a million dollar project at the very least.

Did this make me hesitate.. not in the slightest! When the going gets tough, the tough get going… and I was going to be both tough and smart, so this would be no problem! And so, I kept on building the business that could sustain this anticipated debt load.

We several time came very close to buying such a farm… I am so grateful that I somehow realised that this debt load would absolutely not contribute to the quality of life I valued and had envisioned!

The thing is …. I had grown attached to the HOW of my vision which had out shadowed the WHY. There was obviously some deeply valued life’s intention that led me to dream up that vision of my dream farm in the first place. I was more focused to how I thought I was going to live out that life’s intention in physical reality than focused on the life’s intention itself. That are many ways to skin a cat (as the saying goes) just as there are many outcomes that can satisfy a given life’s intention.

I am so grateful that I was able to see this in time! Is a privilege to be able to put this experience to the benefit of others via my coaching practice! (The wild thing is that i have since acquired several tools via my coach training that are exquisitely useful for this type of situation).

What is it you want to create?

Now… WHY do you want to create it?

Yes! That’s the important part!

Write it down somewhere and check in periodically to be sure that the goal you are pursuing is still in alignment with the life’s intention you were seeking to fulfill.

Soils, Sales, and Systems: Part 2

Over the course of the next couple of weeks, we’ll dive deeper into each of the legs of the 3S pyramid on our quest for the triple bottom line: People, Profits, and Planet.

Soils:

Soils and soil ecosystems are the foundation of human life as we know it. The operation of a profitable and sustainable farm business is contingent on the presence of healthy, vibrant, and fertile soil ecosystems. I won’t go into detail here about soils as the organic movement is already full of knowlege on this topic. I encourage you to seek out and learn from the wealth of books and teachers out there.

I would like to highlight that there is a hierarchy of soil health factors…. that as long as the lower tiers of the soil pyramid are not solid, efforts to impact the higher tiers shall be in vain. So… don’t waste your time with microbiological activators or biodynamic preparations if your drainage is the limiting factor. Focus on addressing the weak link and a solid soil pyramid, tier by tier.

Sales:

The second leg of the triangle is sales.

Ultimately, what is important is profits. However, profits does not start with an S… just kidding. With healthy sales, profits will occur naturally when the two other legs of the triangle are sturdy. That is to say: in a farm environment with healthy soils and optimized management systems, the key elements for profitability are in place.. if and only if the necessary sales are generated.

Our businesses can only grow as far as our imaginations can reach. There is a tendency within the small farm movement to limit what we think is possible; to not dream big enough. At what ever scale you are opperating, aim to be at the upper limit of that scale without unintentionally stepping into the next scale up. To take an example from the boxing world, it is better to be a heavy light-weight boxer than a light heavy-weight boxer. Another way of seeing this is that we must seek to maximize sales for a given set of fixed costs. Your greenhouse cost $25K to build regardless of whether you manage to sell 10 000$ or 30 000$ or 50 000$ of product per year from that greenhouse. The greenhouse doesn’t give a f*** if you underperform!

Basically, what I am saying is that many farmers sell them selves short (literally) simply because they aim too low. If you’re farming 1 or 2 acres bio-intensively, you could be aiming for $150-200K in sales. If your farming in the extensive model with 5 or 6 acres in production, you could be aiming for $200-300K in sales.

Systems:

The third leg of the triangle is farm systems. A system refers to the coherent organisation of a number of components, tools, and procedures to achieve a defined outcome. When carried out in a systematic manner, the outcome of the actions in a system is greater than the sum of the parts ie. When combined in a systematic fashion, the final impact of the actions and tool is greater than what they would have achieved in an individual or haphazard manner.

Systems are both an organizational tool and an analytical tool.

Systems can often be broken down into a number of smaller systems. The farm as a whole is a system composed of a number of smaller interconnected systems

The key farm systems are:

  • Information flow (planning, communication of that plan to the field, record keeping, analysis, financial planning and monitoring)
  • Marketing and PR
  • Pre-planting Prep (Tillage, fertilisation, drainage, field layout, crop rotation design)
  • Crop Establishment (seedling production, transplanting, direct seeding)
  • Crop Maintenance (Irrigation, pest + disease management, trellising, pruning)
  • Weed Management (strategies, cultivation, physical barriers)
  • Harvest
  • Post-Harvest
  • Distribution
  • Maintenance and repair
  • Humans (wellbeing, training, accountability, growth and developement)(farm owners, employees, interns, volunteers, managers)

In order for the whole farm to function to its full potential, each of the farm systems must be optimized and the various systems must be integrated (logically linked so as to create synergies between the various systems). For example, it is clear to see that the Weed Management system and the harvest system and linked. When the weed management system is functioning properly, harvest will be way easier than if you had to search through waist high weeds just to find your crop.