5 Ways the Next Generation of Farmers Can Build a Resilient Business
Most Farms operate as a family business. As a result, there comes a time when the next generation has to take over the Farm. To take the business to the next level, it’s essential to understand how the world has evolved, keep up with the times, and adapt your Farms’ business model to move forward.
We recently sat down with Karoline Rose, founder of Cattleman U, on the Direct Farm Podcast. Focusing on strategies that encourage, empower, and educate Farmers to update their business models, Karoline touched on 5 ways the next generation of Farmers can build a resilient model to create a sustainable Farm business.
1. Measure your Business to Improve It
Candidly, knowing the financial status of your business is essential to determine if you’ll be around next year. Research shows that successful businesses forecast their revenue at least 12 months in advance. Farmers should be looking at where they want to be in 3, 6, 9 and 12 months to determine if enough cash is coming in versus going out. Gaining visibility into these numbers is vital to make important decisions for the future.
Start by simply looking at current operations and analyzing what's working and what's not. You have the freedom to make the necessary changes to your Farm business based on those analyses. Big picture planning is key. If you’re currently accepting orders, consider using an accounting solution to analyze your margins while keeping the books in check. Across the 1000’s of Farms we work with, we find Farmers who use the Barn2Door + QuickBooks Online integration to forecast revenue and track cash flow, gain better insights into the health of their business and understand how to grow their profit margins.
Read: How It Works: QuickBooks Online + Barn2Door
Watch: Manage your Business and Improve your Margins with QuickBooks Online
2. Your Brand is your Most Important Asset
Establishing and maintaining a strong brand identity is important for Farmers to attract new customers and retain loyal customers. A good brand is consistent in fonts, colors, logo, messaging, packaging, and most importantly, is recognizable to your Buyers.
As the market gets more crowded (whereas more Farms will continue to establish businesses), more consumers will become loyal to the brands they trust. With changing Buyer trends and high expectations of branding, it’s essential that Farmers invest in creating an experience customers can recognize.
The first step in building a strong Farm brand is to be present on all channels - web, mobile, social, and email. With consistent messaging and posts about the Farm, your Customers will begin to connect to your brand. As creatures of habit, Customers will buy from your Farm regularly if they feel connected to your Farm. If Buyers are uncomfortable with your Brand, it's possible that your Farm business could lose business or fail to be distinguished from commodity products.
3. Know your Customer Base to Inform the Right Pricing Strategy
It doesn't matter what your neighbor’s prices are or what others are charging at the markets. Why? They're not selling the same product as you. Your pricing strategy should reflect the perceived value of your products (including the value your Brand represents). For instance, Starbucks sells its coffee at a premium based on the quality of its products plus the perceived value of its brand promise.
Should your Farm pricing strategy be limited to cost-plus? Absolutely not. Depending on your practices, quality standards, and demand, setting the right price is essential to creating a resilient business based on the value delivered. Often, a higher price is associated with a high-quality product. Don’t be afraid to charge a premium price if the quality of your products and loyalty to your brand are high.
Watch: Pricing your Products for Profit & Ease - Paul Greive of Pasturebird
4. Social Media: A Double-Edged Sword
Americans are online 6+ hours a day on average. Whether your current or future customers are scrolling through Facebook, watching Instagram stories, or checking their email, everyone has their routine(s). So, if you want to access more customers and drive additional sales, it’s essential to be active on all channels.
While social media is a great platform to share information about your Farm and encourage potential (and loyal) customers to engage with your brand, don’t be misled by other Farms’ presences. If you stay true to your values and share what means the most to your Farm, your social media following will increase organically. While it’s common to see “overnight successes,” don’t let that deter you from engaging Customers on the platform. Keep in mind it will take time to see your efforts “pay off.” Consistency is key to a successful social media strategy.
5. Sell Direct
For the next generation of Farmers to grow a business to its fullest potential, it must be easy and convenient for customers to purchase from your Farm online - anytime, anywhere. To do so successfully, your Farm has to meet the expectations of Buyers and commit to building a direct-to-market business.
The benefits of selling direct include higher margins, better price controls, a larger customer base, and flexible purchase options. However, to create a resilient direct business, Farmers need to commit to this model, start targeting their buyers, and establish an online presence.
Listen: To Serve & Connect by Selling Direct
Barn2Door powers Farmers with the software and the service to grow and manage direct sales. If you’re curious how we could help your Farm build a thriving direct-to-market business, watch this 5-minute video.