Family Farm Management: 5 Steps to Success

Did you know the vast majority of farms in this country are family owned and operated? Family farms make up 97% of farms in the U.S., and small farms account for 19% of total agricultural production.

However, economic and technological factors can make family farm management difficult to navigate.

Family farms are great for the economy and even better for local communities. By understanding the current challenges and best practices of family farm management, your farm can streamline operations, reach more customers, and drive more revenue.

The Challenges of Running a Small Family Farm

Customers and many local restaurants are clamoring for sources of fresh, locally-grown food, which means family farms have unique opportunities to grow.

But just owning a family farm doesn’t guarantee success — and managing a successful farm comes with a number of challenges.

Limited finances: Smaller farms are generally working with less money and less access to affordable labor. Many small farms don’t have access to as many bank loans and other financial resources, which translates to less funds for installing infrastructure and a lessened ability to wait out supply chain hiccups.
Lack of customer awareness: With less staff and funding, family farms often lack the expertise and tools to market themselves effectively. Without dedicated people to handle marketing, small farms have less chance to connect with new customers and create business opportunities.
Limited access to technology: Modern technology has transformed how businesses in all industries do business and sell to customers — but many farms don’t have access to an industry-specific point of sale (POS) system or e-commerce platform, and other tools they need to streamline their operations.

5 Steps to Successful Family Farm Management

Whether you’re starting a farm from scratch or looking to expand your business, it never hurts to go back to basics. Consumer and technological changes profoundly affect how small family farms keep their operations efficient and profitable.

Here are 5 steps you can take to improve your family farm management:

1. Separate Your Family and Farm Budget

When running a family farm, it’s easy to start mixing your personal and farming expenses together. But without a clear picture of what your family needs to live on, it’s hard to know how healthy the business side of the farm is.

Creating separate budgets for your personal and farm costs gives you an honest look at what your family needs to live (food, car insurance, etc.) versus what your farm needs to run (seed, tools, payroll, etc.). On a practical level, tracking separate expenses also makes it much easier to write off any business expenses for tax purposes.

If you’re using a farm POS system, you can use your inventory management software to help build out a farm budget. With all of your sales and purchase orders in one place, you’ll have a strong grasp of the money going in and out of the business.

There are also some really helpful guides online for how to set up farm budget tracking sheets.

Long story short: the sooner you separate your expenses, the better.

2. Craft an Honest Business Plan

A business plan is an essential (but often intimidating) part of family farm management. While it may sound complicated, we promise it’s not as bad as it seems.

Put simply, a farm business plan outlines:

What you hope to achieve financially
How you’re going to do it
When you’re going to do it by

Inevitably, this will go hand-in-hand with your farm budget, since setting financial goals is connected to what your farm spends every month. For new farms, make sure to include startup costs as well. Combined, these numbers will give you an idea of what kind of revenue you’ll need to pull in to turn a profit.

Creating a business plan gives everyone an honest look at your finances and helps you set actionable and quantifiable goals for both the short and long term. So instead of acting on a hunch or juggling a bunch of opinions, you can work on data and numbers that everyone can agree on.

A business plan is also required for applying for loans or grants, so learning how to create an effective one is a great skill to have at any stage of your business.

One more pro tip: a business plan is a living document. You probably won’t get it 100% right the first time and may need to rethink it a few times. That’s OK! The goal isn’t to create one perfect plan and stick to it, but to have a plan for change as your business grows.

3. Invest in Farm-Specific Technology

Managing a family farm isn’t easy — especially when you’re expected to compete with and deliver customer experiences like bigger farm businesses.

Investing in family farm management technology can significantly reduce the time and effort needed to manage the business and admin side of your farm. Using software with farm-specific features is also a great way to create new, convenient offers for customers without needing advanced technical know-how.

Here are some key features to look for in a family farm management solution:

Advanced inventory management: Having the ability to add custom items to your inventory and set prices will give you a real-time view of what’s in stock so you never oversell or lose track of fresh or frozen items.
Sell by weight functions: Many farms need to sell items by weight. Make sure you use a system that supports it natively so you can always provide accurate pricing.
Point of sale: If you plan to sell items in person, having a point of sale system that links up directly with your inventory will make the process smoother by ensuring your online and in-store inventories match.
E-commerce: Taking your family farm online is a great way to expand your customer base. Try to find farm management software with built-in e-commerce capabilities and a website builder to make the process simple.
Flexible payment options: Popular selling options like online sales and subscribe-and-save require flexible and PCI-compliant payment processing.
Custom reports: Using reporting tools lets you monitor sales performance, inventory, and more so your small farm can make smarter, data-driven decisions.

In the end, you’ll be surprised how many hours you can get back with the right software in your corner. Perhaps most importantly, farm-specific tools help expand what you can offer customers with features like subscribe-and-save and online sales.

4. Know When To Hire (And When Not To)

As a farm grows and things get busier, it’s often farm owners’ first instinct to bring on more hands.

Sometimes, that’s exactly what you need. For certain types of work, there’s simply no substitute for a skilled and passionate worker. But depending on why you’re getting busier, the time and money needed to hire someone new isn’t always worth it.

A great first step is to start tracking your time. With a rudimentary idea of where your hours are being spent, you can isolate exactly where your inefficiencies are coming from. Ask yourself a few questions:

What does everyone spend the majority of their time doing?
Are there any redundant tasks?
Are there things technology could help with? How much time do I spend on data entry and orders?
Are all of our work processes consistent? Are some people more efficient at certain tasks than others? If so, why?

By asking yourself these questions, you can determine whether you need to hire help, cut back on certain tasks, or invest in technology to streamline processes.

Collaborative farming is potentially another great way for small and mid-sized farms to pool their resources. But there are a few risks (and benefits) to consider when going that route. Having a solid handle on your own farm’s strengths and weaknesses first is a must.

5. Don’t Forget About Marketing

Marketing is likely not the first thing that pops into your head when you think of a family farm.

We don’t blame you — but family farms thrive on building relationships with customers, and consistently marketing yourself is a great way to do that in the digital age.

While “making a marketing plan” might sound like something only big companies do, marketing for farms can take a lot of different forms, such as:

Social media: Posting consistently on platforms like Facebook or Instagram can show off your farm and let people know about new products and the latest offers.
Newsletters: With a farm POS system, you can ask for customer emails to sign them up for a newsletter.
Website: A website is the handshake of the modern age — having a clean-looking website is a great way to introduce yourself to the world. Additionally, using software like GrazeCart to sell online can increase your profitability by giving your business a wider reach.
Customer loyalty: Setting up discounts or subscriptions is convenient for customers and a great way to drive customer loyalty.

Use whatever method for reaching customers that feels natural to you. But make sure you use some form of customer outreach to keep your farm’s name at the top of peoples’ minds.

Make Small Family Farm Management Easier With a Trusted Partner

It’s a great time to start a family farm, with more people than ever seeking out sustainable and ethical alternatives for their food. But like any small business, it can be tough to build success with fewer resources.

Solutions like GrazeCart were built by farmers, for farmers, to help local and family-owned farms thrive. With powerful features for inventory management, sell by weight, e-commerce, and more, GrazeCart gives family farms the tools and flexibility they need for long-term success.

Try out your free 14-day trial of GrazeCart today.