Putting profits ‘first’ on small-scale organic vegetable farms

Relax! I’m not talking about prioritizing the pursuit of profits ahead of social and environmental considerations. I was just teasing you with that title 🙂

What I am referring to is how we view profit in our financial planning.

Is profit simply what is left over at the end of the year once all expenses are paid?

Building on the principle of Pillar 1, I propose we shift our paradigm and put profits first when we start working on our budgets for the coming year. The first step in crafting an empowering budget is to declare what profits (salary) you want for the coming year. In a certain sense, profit is the first ‘expense’ to be planned in a budget. 

Before: Income – Expenses = Profit
This year: Income – PROFIT = Expenses

There are two things that come out of this shift.

Firstly, we realize that we have a greater degree of flexibility in terms of our expenses (and our incomes, but we already tend to think about acting on income). This is a key element in moving towards greater financial mastery. It is easy to think we have no control over our expenses, but the reality is quite to the contrary. This flexibility exists both at the planning and the execution phase.

  • At the planning phase, the act of planning profits first opens the possibility to use our human creativity and ingenuity to see ways of modifying both our income and expenses in order to achieve our financial goals.
  • At the execution phase, we are able to keep our expenses in check by making conscious spending decisions by comparing each month how much we have spent in a particular category versus how much we had planned for. Given how passionate farmers are, it can be easy to spend too much when we don’t take a moment to pause and see how much money is actually left in that budgetary category.


FREE TOOL: Here is a spreadsheet that I have found useful on my own farm to track the evolution of my income and expenses on a monthly basis (using color coding to help me see the current situation of each expense category at a glance)

Secondly, this shift allows is to tap into the power of declaration. When we declare what net income we are willing to earn in the coming year, we set to work the immense power available to us when we focus our mind on a specific outcome. The mind is like a super-computer, it will work instantly to find answers to whatever questions we consciously or unconsciously ask it. If we want better answers, we need to ask better questions (aka, more conscious questions).


With the traditional way of seeing profit as what is left over, we are asking our mind to solve for the question ‘How can I have enough left over at the end of the year to scrape by and make it through another year?’. When we shift our thinking to ‘profits first’, we are asking our mind to solve a very specific question: ‘How can I manage my business so that I can pay myself an income of 30 000$ this year?’


The final element in this approach is to actually set up automatic monthly bank transfers from your farm bank account to your personal bank account. This way, you are actually paying yourself first. Start out at least with a baseline salary… 1000$ per month, 2000$ per month or whatever is authentic to you. The idea here is, once again, to prioritize and attribute your resources to what is most important to you first.

What do you see for yourself about this shift in mindsets?

What net income are you willing to earn in 2019?

By what date are you willing to complete an empowering ‘profits first’ budget for 2019?



Happy New Years! May health, prosperity and love reign in your life in  2019!

 

Pillar 5: Creating a rhythm of monitoring using a network of support.

Thanks to the first 4 pillars, we now have: a clear vision; identified our priorities; developed our plans; and implemented our systems. Now, it’s time to play ball!

Pillar 5 is all about consistency.

Small sweet actions taken consistently will always outperform erratic blitzes of activity followed by periods of inaction.

The question is: how do we create a farm culture that supports each member of the team to consistently play full-out and where everyone participates in keeping the farm on track to achieve the goals as planned.

Pillar 5 addresses this with two elements: Monitoring, and Support.

Monitoring… a.k.a. Keeping Score

Goals, plans, and budgets are not mere whims that we create in the winter and forget about till next year. They serve as a road map to keep us on track to achieve our goals. For this to occur, we actually need to check the map. Regularly.

This means keeping the bookkeeping up to date (minimally monthly) and comparing the current actual situation to the forecasts. It is amazing how many actions are possible to help keep the budget on track…This is attainable only if you know precisely where you’re at each month. Here is a tool that I used on my farm to visually know how each of my income and expense accounts was doing at any moment.

This principle applies to all our farm goals, not only to the financial objectives. The key is to check in regularly to compare your goals with the results you are actually getting. How often are you actually practicing the guitar? How present are you for your family? Are you taking one or two days of rest and rejuvenation each week? Whatever your goal is, it is critical that you check in with yourself. This is much easier if you have a clear, measurable goal. The 4DX system is a great example of this approach.

Support

No person is an Island! We are made to be social creatures who thrive on love and caring. There are times when our strong, independent natures are very useful to us as farmers and entrepreneurs. However, when this nature dominates the way we run our farm, we end up taking on so many roles and responsibilities that we no longer focus our time on what is important. So much so that our passion turns into work and we no longer have fun!

What would it be like to ask for support? What would it be like to be part of a network of mutual support?

Very often, we already have the networks available to us. We just need to learn to offer, ask for, and accept support. This support can be in the form of our local and regional community of farmers, our friends and families, our farm employees, and professional services such as coaching or mastermind and coaching groups.

Our initial inkling is that ‘Support is for the weak.’ The old vision of a strong leader is someone who is independent, mentally and physically powerful and is able to make all the right decisions on their own. The new vision of a strong leader is one who surrounds themselves with all the best advisors, who is mentally and physically flexible, agile, and resilient, and who makes the best decisions by inspiring and bringing out the best in those around him or her.

Ultimately, support is out recognizing that we are not alone. It’s about reaching out and connecting with those in our networks. It’s about asking for help. It’s about generously being there for others. It’s about being part of something greater than ourselves

Is there someone in your network you’d like to connect with this week?

‘Vulnerability is allowing the winds of life to blow freely over your soul’ – Maria Nemith

Pillar 4: Building kick-ass farm production systems that support your farm lifestyle goals!

Have you ever had great intentions but have failed to follow through? Or perhaps you are like me and get very excited about making great improvements, but you lose interest and motivation after a couple of weeks? Do you find yourself doing work that is either redundant or that could have been avoided with the right preemptive actions?

Using the first 3 pillars, you know clearly what outcomes you want to produce, you’ve planned out how to get there, and you’ve made the decision to focus on the actions that get the greatest bang for your buck… now what!?

The key lies in the consistency with which we take action. In this context, farm production systems serve 3 outcomes:

  1. To support us to take action with greater ease by reducing reliance on ‘willpower’ and memory;
  2. To ensure that each action or task works synergistically with the other components of the farm thus reducing overall work;
  3. To allow us to effectively delegate to our employees and thus reduce the degree to which you are the bottleneck in your farm operation and free you up for focusing on your unique abilities, for working less, and living the lifestyle you would love to live.

What is a system?

A complex system is a self-perpetuating arrangement of interconnected parts that form a unified whole…” (The Personal MBA) and work to achieve a common outcome.

In the context of a small-scale organic vegetable farm, we could literally define dozens of systems. However, there are the 5 essential systems that must be in place:

  • Information Flow System
  • Soil Management System
  • Weed Management System
  • Harvest and Post-harvest System
  • Marketing System

Designing and optimizing farm systems:

Over the course of the fall and winter, we will be looking in depth at each system with the goal of identifying and implementing the key adjustments to support you in achieving your lifestyle goals for 2019.

To start with, here are some seeds I would like to plant in your brain for your consideration

 

  • What is the desired outcome of each system?
  • What are the key elements of each system?
  • Map out the system: How do materials and efforts flow through the system? (Both conceptually and physically. Pay particular attention to where the bottlenecks or weak links are.
  • What synergies exist between systems? For example, great weed control greatly increases the efficiency of harvest.
  • Are the processes and procedures clearly communicated in writing accessible to the whole crew?

 

 

Pillar 3: Prioritizing the use of time and energy on your farm

Let’s face it. We all have a finite amount of time and energy here in the physical reality and not all actions we do are created equal in terms of the wellness they produce in us.

This is where pillar 3 comes in!

When planning out how to use your time and energy (including the energy of money), start by dedicating the necessary time and energy to that which is most meaningful or important to you.

We often have the tendency to leave the most important for last. I’m as guilty as the next person in this.

  • ‘I’ll do yoga/play music/read/etc at the end of the workday if I have time.’
  • ‘I’ll spend time with my kids on the weekend.’
  • ‘I’ll pay myself with whatever money is left once the expenses are paid.’
  • ‘I’ll learn to do that when I retire.’
  • ‘I’ll fill out the field records later’.

I would like to share two simple concepts that have shifted the way I see things.

The Pareto Principle (also called the 80/20 principle):

80% of our outcomes result from just 20% of our actions.

As in:

  • 80% of your profit comes from 20% of your crops;
  • 20% of your customers cause 80% of your pain in the ass;
  • 20% of your actions result in 80% of your experience of joy and happiness.

Now, I don’t necessarily think of this in terms of precise numerical values. The point is that by focusing on a limited number of high-yield actions can we can maximize desired outcomes.

Parkinson’s Law

Tasks expand or contract depending on the time and resources we attribute to them.

  • To visualize this, imagine a university student who is able to write a term paper in 24 hours despite having 6 weeks to total to do so.
  • Market harvest can take all day but it can also be done by 3pm or by noon.
  • You can take hours to answer emails, or you can bang it out in an hour.
  • A financial plan can be adjusted to accommodate the profit you would love to earn if you start your budgeting process by declaring the profit you want.

Of course, there are limits within physical reality about how far we can push this. I invite you to try it out and test those limits. You may be pleasantly surprised with the results.

When we apply the Pareto Principle and Parkinson’s Law to how we choose to spend our time in a typical day at work, we see that:

  • Certain actions contribute much more to our desired lifestyle than others;
  • We can dedicate resources to these important actions;
  • Human ingenuity and the elasticity of tasks make it that we still are able to complete the rest of the necessary by less joy generating tasks.

Two books that have greatly shaped the way I think about these principles are ‘The Personal MBA‘ and .’The 4-Hour Work Week‘. Definitely good additions to your winter reading list!

 

Alright!  Your turn now:

  • What 20% of tasks on the farm contribute to the majority of the benefits in terms of your experience of joy, profitability, and happiness?
  • What 20% tasks contribute to 80% of your headaches and heartaches?
  • Given what you have just seen, what aspects of your farm are you willing to delegate, outsource, or simply stop completely?
  • What are the 3 actions that you are willing to build into your plan as un-negotiable demonstrations of your intention to live a lifestyle you love on the farm?

 

**Please note that all amazon links here are ‘affiliate links’ meaning that I get between 4 and 10% of the sales depending on the type of product. Of course, this does not affect which products I list…. it’s just that if I’m going to put links anyways, I might as well generate some income while I’m at it!

 

 

 

Pillar 2: Bridging the gap from visionary reality to physical reality on your organic farm.

Great! Thanks to pillar 1, you have now clearly and vibrantly described the outcomes you want to produce on your farm and the lifestyle you want to live…. So f*%king what?!

Without action, vision is useless… just as without vision, actions are futile. Both are crucially important if we are to live a full, satisfying, and meaningful life.

As laid out by Maria Nemeth in ‘The Energy of Money’, Every action and accomplishment in physical reality must first exist in visionary reality (sometimes called Metaphysical Reality).

In visionary reality, everything is possible, the energy is light and free-flowing, everything is possible. Just think of how easy it is to imagine what you would love; to build your ideal farm in your imagination.

In contrast, everything in physical reality requires energy (time, money, etc), the only certainty is uncertainty, and everything is in a state of constant change.

As we seek to bring our vision from visionary reality to physical reality, we hit trouble at the border….. Much like a space shuttle heats up as it enters the atmosphere as it returns from outer space. Without the proper protection, that space shuttle will simply burn up, just as our visions require the proper support as we bring them across the border from visionary reality to physical reality.

This is where the art of crafting SMART goals (INERT LINK SMART GOAL) and the systematic use of planning comes in. Plans are the bridge to get us from visionary reality to physical reality. In the context of a farm there are three plans that are essential:

  1. Cash Flow financial plan
  2. Crop plan
  3. Personal project plan

As Boy Scout Master taught me: If you fail to plan, you plan to fail.

Key Elements of a Good Plan

We’ll get more into detail in later blogs about each of the type of plans that essential to every farm but first,  there are certain elements of every good plan:

Linked to a specific S.M.A.R.T. goal

The whole point of a plan is to serve as a roadmap to reaching a certain outcome. In order to know with clarity where you want to go, each plan is linked to a S.M.A.R.T. goal.

Specific: Identify your desired outcome as precisely and as detailed as possible.

Measurable: How will you know whether or not the goal was achieved?

Attainable: We want our goals to be a stretch… but not so much as to be demoralizing. The idea here is to set goals that bring us out of our comfort zones and invite us to master new skills.

Relevant: Which of your Life’s Intentions is this goal related to?

Time-based: By what date do you declare that this goal will be achieved?

Also, powerful goals are writ

For example, here is an example of a SMART goal I personally have.

By November 15th 2018, I enroll 3 participants in my Farmer to Farmer Group Coaching Program. Life’s intention: To be an effective agent of change.

Includes the appropriate safety margins

Remember when I said that in physical reality, the only certainty was uncertainty… I wasn’t kidding.

Every good plan includes appropriate safety margins. This allows you to set realistic (and even slightly ambitious) targets and still have some wiggle room to account for the joys of living in physical reality.

Reverse engineered back from the envisioned outcome.

Equipped with a written vision statement from Pillar 1 you now know where you want to be in the medium time range (2-3 years out).

Given the lifestyle you see you want to be living 2-3 years out, what are the steps to getting there? Work backward from your vision to see what you need to achieve in the coming year.

For example, if you see that you would love to be earning an annual net income of 30 000$ and you are currently making 15 000$… what net income are you aiming for in 2019? 20 000$, 22 000$, 25 000 ? What would be attainable but would require you to stretch beyond your current level and skill set.

 

Your turn now!

Which 3 elements of your vision are you willing to move towards in this coming year?

What’s your plan for getting there?

 

**Please note that all amazon links here are ‘affiliate links’ meaning that I get between 4 and 10% of the sales depending on the type of product. Of course, this does not affect which products I list…. it’s just that if I’m going to put links anyways, I might as well generate some income while I’m at it!

 

 

 

Pillar 1: A clear and intentional vision of the lifestyle you would love to live on your organic vegetable farm.

Do you ever feel like you are serving the farm rather than the farm is serving you?

What would it be like for you to be so clear about why you are farming and what purpose the farm serves?

This is exactly what the first of the 5 pillars is all about. My basic premise here is that the farm is a tool. It is a tool we choose to use to live a certain lifestyle AND to make a certain contribution to the world we live in. The challenge we sometimes experience is that we are so busy with the daily operation of the farm that we lose sight of why it is we are farming.

This is where the 5 pillars of lifestyle farming come in.

Over the coming weeks, I would like to dive deeper into each of the pillars. The 5 pillars are:

Pillar 1: A clear and intentional vision

Pillar 2: A S.M.A.R.T. game plan for bringing that vision into reality

Pillar 3: Mindful prioritization of how we use time and money.

Pillar 4: Solid farm Systems

Pillar 5: Monitoring results and using Support.

Pillar 1 is all about knowing where we want to go, what outcomes we want to produce, what success actually looks like for us. Success is simply defined as doing the thing we said we would do, with clarity, focus, ease, and grace. Success is a highly personal experience. Comparison to others is a pure waste of time (it’s like comparing our intimate knowledge of our inner selves to the outer appearances of someone else.)

So, What is your farm for? What life would you love to live? What contribution would you love to make?

Here is an exercise I have found to be very useful in crafting a clear vision. I invite you to set aside some time in the coming week to reflect and develop a written vision. And don’t forget, this is not something static, this is something that is in constant evolution and will shift and grow as you progress on the journey of life.

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Crafting a Powerful Farm Vision*

What is a vision?

A vision is a clear and vivid declaration from your heart of the life you love… and intend… to live. It may pertain to an area of your life or to your project, farm, team, organization, community or the world.

Why craft your farm vision?

Remember, our definition of success is: doing what you said you would do, consistently with clarity, focus, ease, and grace. When you are clear about your vision for the lifestyle that you would love to live, you focus your energy and act on what’s most important to you and on building a farm that fully supports that lifestyle. Your actions consistently answer the question “what would someone with my vision do next, standing where I am standing?”

“Acting from” vs. “Acting toward” your vision

When you act from your vision in the present moment, you’ll notice your vision moving toward you. Action from your vision means using what’s available to you right here and now, to bring your vision into physical reality—versus seeing your vision as something vague “in the future”. In something as long-term as farming, it is refreshing to be able to plan for the future but live in the present.

How Your Vision Relates to Your Life’s Intentions and Goals

Your vision is an outgrowth of your Life’s Intention (an underlying aim, purpose, or direction that brings great meaning to your life). Your vision provides energy and clarity as you go for your goals. As we know, things in physical reality take energy, they are constantly changing and unpredictable. When we’re focused and engaged with our vision as it relates to our life’s intentions, it provides the motivation to continue taking action.

Criteria for a powerful vision

  • First person narrative vs. laundry list. Your vision is a story, with you as the main character.
  • From your heart vs. your head. Ask: what would I truly love? What inspires me the most about this? What would have me go to bed grateful and wake up energized?
  • What’s possible vs. plausible: Suspend doubt and concerns about “how” you will achieve it.
  • What you want vs. what you don’t want, what you “should” want or how to get there.
  • Vivid vs. abstract: Ask yourself, can I see myself in this vision?
  • Present-Tense vs. future-tense: articulate your vision as though it is happening right now.

Exercise: Creating & Using Your Vision Statement

  1. Take a blank piece of paper (or open up a word doc).
  2. Identify the Life’s Intention that gives this vision meaning and purpose. (See life’s intentions inventory.)
    1. What is your farm for? What life’s intention gives deep meaning and purpose to your farm? Chose one and only one!
    2. Write it at the top of the page and use it as the focal point for your Vision Statement.
  3. Imagine talking to a friend in 2-3 years into the future. You hear them say  “Seems like things are going really well for you! Will you tell me about it?”
  4. Now imagine answering them, “I’m glad you asked!” What do you hear yourself saying next? Write it down, painting as clear and vivid a picture as possible of your experience.
    1. What lifestyle are you living?
      1. What types of activities are you doing?
      2. What does your weekly schedule look like? How many hours per week are you working on the farm?
      3. What other interests are you pursuing passionately?
    2. How much money are you earning from the farm?
    3. What contribution are you making?
    4. What does the farm look like so as to fully support the lifestyle you would love to live?
  5. Go for “good enough”. If your internal voice of worry says anything about it needing to be “perfect”, simply say “thank you for sharing” and finish the current draft.
  6. Read your vision every day for the next 30 days. Ask yourself at least once a day, ideally in the morning: What would someone with my vision do today, standing where I’m standing?

* Vision instructions inspired by Jeremy Blanchard, leadership and life coach. Adapted specifically for use in the context of farming. 

The 5 pillars of building a small scale organic vegetable farm that supports the lifestyle you would love to live

We don’t often think of farming as a lifestyle business, but it absolutely is. There is some lifestyle that you would love to live and some contribution you would love to make to the world… and farming is the vehicle you have chosen to do so. Yes… chosen. It is so important to remember that farming is a choice you make. No one is forcing you to farm. The world will not fall apart if you stop. No matter how seemingly committed to the farm you are, always remember that there is a way out and that you are CHOOSING to farm. (through good times and bad, health and sickness, till death do you part 😉 )

Given that you are choosing to farm.. to use the farm as the vehicle to living a luminous life, there are certain foundational principles to insure that the farm you are building actually is supporting you in living the life you would love to live.

5 pillars of building a farm that fully supports the lifestyle you would love to live:

  1. Know what the farm is for! Be clear about the outcomes you wish to create, what lifestyle you would love to live, what contribution are you here to make? Lead from your heart, not from your brain… or more precisely…. Lead with your heart and manage with your brain.
  2. Put first things first: Now that you know what is important to you, build your farm around these elements… profit, family time, a specific contribution you want the farm to make in the world. Literally schedule out time ahead of time for these activities, start you budget with the profit you want…
  3. Have well designed farm systems that make it so the farm is operating smoothly and is working in support of your lifestyle and contribution goals. It is crucial that the activities be organised into coherent and well documented systems. The chain is only as strong as it’s weakest link. Similarly, the farm operation is only as strong as it’s weakest system.
  4. Put in place a network of mutual support and use it! No one is an island, though it may sometimes feel like you are.  
  5. Monitor, update, and adapt. This is the step that separates the sheep from the goats .. umm, what the heck does that mean 🙂 A vision and the resulting plan are only useful when they are used in real life. Monitoring insures that you are aware of how things are going. All too often we have a great vision or we make a great plan and put it on the shelf. The key is to us your vision inspired plan as a road map to creating the life you would love to live. To do so, you have to know where you are on the map, and you have to check in regularly to see if you are still on the right path, to see if that path still leads where you wanted to go, and to see if that destination is still a place you want to go.