By John Mesko • SFA Executive Director
Recently, I was invited to attend the 2014 Seedstock Conference in Los Angeles, an annual event that highlights innovations in agriculture, beginning farming, and local food issues. Being set in California means an emphasis on solutions for the massive drought affecting the state, as well as urban farming. Seedstock organizers recognize SFA’s leadership in farmer-to-farmer networking, and the need for better connections between West Coast and Midwestern agriculture.
This year, I was discussing, among other things, the importance of good business planning for beginning farmers. Because of our work on Adjust 2015, I was asked for my thoughts on what are the most important aspects of a good business plan. From what we’ve learned and from the collective wisdom of the Sustainable Agriculture movement, those keys are: Flexibility, Benchmarks, Exit Strategy, Sensitivity Analysis, and Professional Development. Over the next few issues of SFA Connect, I’ll share a bit more on some of these concepts.
Flexibility. In food and farming, there are so many variables: supply and regulatory issues, weather effects, labor issues, and family concerns. Farms, even large ones are typically classified as small businesses and as such face an uphill struggle from the start. These are often growing businesses, in a competence market requiring unique relationships with suppliers, customers and other producers. This interdependence creates great opportunity as well as great risk. The more dependent a business is on these connections, the greater chance problems can arise, requiring the business to respond with flexibility. According to the Purdue University Agriculture Economics Department: “Strategic risk management requires the capability to be flexible. Flexibility is the managerial/organizational capacity to change in response to changing circumstances. To be flexible, a farm must have the resources and skills to successfully change strategies regarding key strategic business choices, such as business enterprise focus, financial/organizational structure, marketing and channel linkages, growth/downsizing, etc. “
This is what Adjust 2015 has researched, and a good bit of the New Farm Reality Check curriculum we are developing will focus on building flexibility into business plans. Look for this to become available at the 2015 SFA Annual Conference, set for Feb. 14, 2015, at the College of Saint Benedict in St. Joseph.