Farm businesses as are unique as the people who own them. While there’s no silver bullet formula to structure your farm for success, Steve Nicholson of RaboAgrifinance said there are four things successful farm businesses have in common that you can do, too.
“Our better operators have multiple businesses,” he told young farmers attending the Tomorrow’s Top Producer conference. Unconventional diversification often yields the most return, he said, adding his clients have a range of additional businesses including crop insurance, grain elevators and even selling branded products. “We have a customer buying manure, composting it and repackaging it and selling to Home Depot or Lowes,” he said.
2. Inventory strengths and weaknesses.
The most successful business owners can identify the strengths of their leadership and add expertise to their teams. “Bring good people to the operation that help it get better,” he said.
3. Organize your operation.
No matter the size, Nicholson said it’s critical to treat your farm businesses like any other business and give everyone a title. CEO, CFO, production manager, logistics manager, procurement manager, etc. “Think about all of the things that have to happen to make your farm work,” he said. “Your strength is in that office making those decisions. Bring that excellence to the operation.”
4. Be flexible and opportunistic.
Always have a plan a, plan b and a plan c, Nicholson said. Be open to new opportunities presented. Warren Buffet said “the plan itself is opportunism. There is no plan before that.” There are always opportunities in agriculture, according to Nicholson. “What is the market demanding? What is the consumer wanting to purchase?” he said. “Don’t let your biases get in the way of a business opportunity.”