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.
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.
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:
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.
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:
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.
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:
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.
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:
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.
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:
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.
Related Read: Farm Loyalty Programs: 5 Ideas to Create Repeat Customers
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.