Expanding or improving your current farming operations can be both an exciting and daunting undertaking. With so many factors to consider, how can you be sure you are managing your farm’s growth successfully? Let’s start by defining what success looks like to you, no matter what your goals are for scaling your farm!
Find Your “Why”
Implementing an effective growth strategy looks different for every farm and business. What long term goal will your improved operations help you fulfill? Start by defining the “why” behind your expansion. Whether you are looking to enhance the operational efficiency of your current processes, diversifying your crops or livestock, or entering a new market, any goal you set for yourself should point back to your “why.”
Your “why” could be to preserve a family legacy or simply to embark on a new challenge or opportunity. Look at your “why” as your guiding compass. When making decisions surrounding the growth of your farm, every decision should point back to your “why.”
Maximize Before Expanding
An inefficient operation will not become efficient just by growing. In fact, growth often magnifies weak spots in your business. You should be maximizing the assets and resources of your operation before you consider scaling up. Study your current practices and operational metrics – your average yields or production, equipment and facility utilization, financial metrics such as cost of production and capital structure – then compare them to industry averages, and more importantly, to the top 25% of operations in your industry. This will help you assess performance and the efficiency of your day-to-day business operations and give you an idea as to where your efforts at improving should be focused.
If there are areas in your processes that can be improved upon, focus on those first. For example, improving your cost of production could include adopting new technology to reduce input costs or redesigning your facilities to be more efficient and allow you to get the same jobs done in less steps.
When implementing new processes, it is crucial to effectively communicate expectations to your entire team, especially new employees. One of the biggest challenges of change management is getting buy-in from your whole team. As critical as understanding your “why” is, it is every bit as important for your team to know and understand the “why” as well. Clear and effective communication, including the underlying rationale, as well as an environment that allows open and honest feedback, can ease the transition of implementing new processes.
Find a Network of People
Finding the right people who can provide their expertise and support is essential to any growth strategy. Working with a team of experts who understand your business and your industry will save you time and resources in the long run. If you identify a weak area in your processes, it needs to be addressed to continue to scale your business. Consider working with an outside consultant that specializes in your industry and can bring fresh eyes, ears and ideas to your situation. Such consultants bring helpful experience from working through similar challenges with others. Your CPA or attorney can also be a valuable resource.
Specialized lenders, such as GreenStone, bring familiarity to the unique circumstances that come with growing an agricultural operation and can provide tremendous value to your expansion efforts.
Engaging with a peer group is another great way to hold yourself accountable and learn from the experiences of others who have already experienced many of the challenges you are facing. These relationships can help you learn growth strategies from others in the industry, how they managed their operations through periods of growth, and what they learned from it.
Never stop learning. Utilizing resources and continuing educational opportunities will help you learn from experienced peers in your industry. If you are a young, beginning, and or small farmer, GreenStone offers a CultivateGrowth mentorship to learn from experienced mentors.
Set Sustainable Goals
Once you’ve identified your growth strategy, it’s time to prepare for monitoring and measuring the results of your efforts. Establish a set of benchmarks or check-ins for yourself that will help you track your progress. This can be quarterly, semiannually, or whatever time frame will best help you stay on track with your goals. Know what metrics you are looking for and set a timeframe for when you expect to see progress.
Most importantly, check in to make sure your growth strategy is still aligned with the “why” behind what you are doing. If you don’t see the results you would like, take the time to reassess your plan and the execution of your strategies. There will always be things you will need to adjust from your original plan as you continue to grow.
Remember growth is not always linear (if only it were that simple)! You are solving an equation that is unique to your situation – that is the reason behind the emphasis on your “why”. You may have to slow down to gain momentum and see the results you are looking for in the long run. Again, no matter what your goals for your operation are, or what your growth strategy is, always go back to why you started, and your long-term vision for your farm.
GreenStone’s dedicated team of experts are here to support the growth of your agricultural operation. Contact your local branch today.
