A Profitable Farm Business is a Sustainable Farm Business - Part 2
In this episode, we sit down with Tom Bennett of Bennett Farms (MI) to discuss the importance of driving profits to build a sustainable business model. Tom shares why Farm profitability should be the main focus of Farmers looking to scale operations.
This is the second episode in a two-part conversation with Tom. Bennett Farms is a pastured-poultry Farm located in Edwardsburg, MI. Tom serves thousands of customers in Michigan, Illinois, and Indiana.
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Rory Loughran: Hey everyone, I just wanted to jump in before we get started with the interview here with Tom and let you know that this is actually part two of our interview with Tom. If you want to hear part one, you can listen to last week's episode, uh, where we kind of lay the groundwork and start diving into all these topics that we're gonna continue talking about in part two.
So, if you wanna go back and listen to that one first, if you've already listened to the first one, then without further ado, here is part two.
I know you talked about audiobooks of being one of your big forms of learning for other people. What are some of the ways that other farmers can dive in and grow this part of their knowledge [00:01:00] base?
Tom Bennett: Yeah, I mean it the reason I'm where I'm at now with the audiobooks is cuz I basically ran out. Everything else to listen to on the internet. went through, I listened to every single podcast in the World that had anything to do with farming. Like when I was early on, when I still had a day job and like before I even started farming, like I was consuming everything I could get my hands on, but it was all like farm directed stuff.
It wasn't, I wasn't really thinking about the business stuff as much. I knew that I had to be profit, like you said, but there was so much farm stuff to still learn from, like Joel Salatin stuff. Podcast like Your Guys is, which wasn't around when I was started, but I would've listened to every single Direct Farm Podcast there was if I was me four years, four or five years ago.
So I just, I consumed everything else there was on the Worldwide web to listen to, and then I found Audible and I ran. Anything that had farming in its name and now I just, great courses series are like college lectures from like professors at college. They're 27 hours long.
[00:02:00] Most of them you get your money's worth. Your one book credit like that you use you get 27 hours of Cambridge quality like business courses. Like you can't beat that. Like it's good value. Every now and then I'll light it up with something fun. Like right now I'm listening to something on the the history of Chicago, like from its founding until present day.
And there's so much information there that's just fascinating cause we do markets in Chicago every weekend. And it's interesting to me, but also now I know more about the culture and the history of the city. So maybe that'll help me at some point have an intelligent conversation with a customer at a Chicago farmer's market.
Because oh yeah, Pullman Street, did you know... So.
Rory Loughran: Yeah. Do you have, and I know you mentioned one marketing book earlier, are there any other kind of books that you would recommend maybe are good starting points for people to look into?
Tom Bennett: Yeah. Besides the profits first for marketing. It's not really gonna help anyone with like regenerative farming, but just from a business standpoint and like learning about growth, the meat [00:03:00] racket by Christopher Leonard.
Which is more to do with the growth of Tyson and Cargill and Purdue and all of them and like how they came from being just a backyard farm to the conglomerates that rule the world of meat. It's a very fascinating listen, and even though a lot of us that are selling direct to consumer aren't fans of them. It's still an interesting read because even if you hate those companies for whatever reason, it's still good to know how they got to where they are and things.
That was a very good book too. The meat racket. Very interesting. Listen, and it's inspirational, Don Tyson, how he came from nothing, just like dirt road farmer. He had a half a bale of hay and a used pickup truck when he left home. Built the, one of the biggest meat corporations in the world.
He started out raising chickens in his backyard and, so it's a pretty cool story to listen to. You'll gain some insights from it.
Rory Loughran: Yeah. I know you mentioned this earlier, you said almost like a one to one ratio on [00:04:00] business books to farming books.
Tom Bennett: If not heavier. If not a heavier ratio. More business than farming.
Rory Loughran: yeah. So that was my question is how much time should farmers be dedicated to learning the business side of things? How much effort and time should they be putting into that? I don't know if how you wanna break that out, but, and I know it, it can get gray cuz you were saying too you listen to this stuff while you're doing deliveries.
So this time doesn't necessarily have to be exclusive to just sitting down and learning, but how much time do you think people should do.
Tom Bennett: If your farm is suffering and like your animals aren't doing well, then obviously you need to focus on that. You can shift. It doesn't have to be a hard and fast like number every week. There's some, like today I'll probably spend only two hours taking care of animals and chores.
That's it, like two hours. And then I, but I'm gonna spend eight hours in my office right here doing computer work. Editing already edited my website today, added another link to a a news article that was published about us. I'm scheduling stuff for next week, so I probably spend at least two thirds to three quarters of my time on business stuff.
[00:05:00] And during the summer it's probably 50. Because we got a lot more production going on in the summer. But yeah, I don't know. Whatever's suffering the most like focus on that day, but just don't forget about the business stuff. And don't ever get complacent. I remember when I was starting out, right?
And so when I was trying to make this a thing, like as a living. I would feel like I did a lot of stuff. Oh, I got my website up, or I got this done, or I accomplished this. And I think some people would coast on their accomplishments for a little bit. Oh, I got this done. I can relax now.
Don't ever relax. Keep it full till all the time, like your business depends on it, and you'll be all right. It's when you're like, oh, okay, I've done enough. I don't need to, I've got all my websites up, my online store. Okay, I can just do nothing. Like now I can just play in the dirt.
Like always stay on top of it. You're either moving forward or you're moving backwards. There is no standing still. So if you're not making progress every day you're losing ground, one thing that would drive me [00:06:00] too early on when I was like trying to build a brand and trying to make a farm, is like I would see these other farmers on Instagram that were like killing it.
Like they were doing it, like they were doing what I wanted to do, and it was like a Sunday and I'm like, inside, maybe I just got up and I was checking my phone and I would see these other guys doing it, and it was like, man, I'm never gonna but it fired me up, like to be better, like I want to be that good too. You gotta have a little bit of competitive spirit, I maybe. But yeah, just don't ever coast on your laurels and relax. Just keep getting better every day. Also one thing I wanna add into this podcast is, sometimes I hear farmers say when they're like, wow, you do 14 farmers markets a week.
We can't do that because, it just doesn't make sense for us to pay an employee to go to our farmer's market booth because, it doesn't, financially we can't do that. It has to be me or my husband. If you can't pay someone to run your booth for you, you need to fix what you're doing because that means you can't afford to pay yourself to do it either, and that means you're working for free.
That's a clear red flag. If [00:07:00] you can't scale what you're doing, what you're doing is broke. Only things that function properly are scalable, like from an income standpoint. So if you're like, oh, we can only do human markets cuz it's just me and my husband and we can't afford to hire someone else because there's not enough money in it, then you need to figure out how to get more money in it because you and your husband can't do it either.
If you can't pay somebody to do it or you shouldn't be unless you're just retired and this is, your hobby.
Wanna get out and see people on Sundays, which I see a lot of that, but just keep that in mind, it needs to be if it's truly working, it should be able to scale.
Rory Loughran: Yeah, that's a really great point. And I like too what you said about Accomplishing things and then being like, oh, it's done. Cuz I think a lot of times with getting farms online, we see that a lot. It's that is the big hurdle. And so it's oh, I got my farm store set up. I got my website set up. I'm good now. But that's that's where the work starts. Now you're online now you gotta work twice, three times is hard to start advertising against the whole online world.
Tom Bennett: [00:08:00] yeah. It's and some farms don't want to do that. I gotta call, so there's several farms at the farmer's markets, I've met that utilize Barn2Door. And it's funny cuz I'll spend my time like when it's slow to farmer's market, like helping the other farmers that are on Barn2Door. And so I'm like anyways, I had one lady who's like a a social media like marketing person that's wanted to be hired by this other farm that I know for three hours a week to run their online stuff.
And she called me. She was like, Hey, they use Barn2Door. I know you use it too, can you tell me about it? I'm like, look like, cuz he is wanting her to set up his store and do all this stuff. I'm like he has all those tools available to him. He doesn't need you. Like he has a Barn2Door rep that does that stuff like, helps him with that for you.
Like all you're gonna do is find out whose Barn2Door person is and call them and ask. I was like, no. He needs to learn how to do this himself. He has to update his store, if you do it for him, he's never gonna learn and then he can't add a product or, things like that. So yes you do need to do that and [00:09:00] figure out how to do it.
If it's not your thing, say you're, maybe you have a daughter or an aunt or somebody that works on your farm, that can do it full time. You also don't want to have just one person know everything because then they've got the golden handcuffs on you. If you've got one key employee that's like your entire, like internet knowledge is all with that person, you are screwed If something happens and they leave, like you'll be starting over.
So make sure that everyone knows, or at least you do what's going on. Yeah. I forget what the original question was, oh, yeah, you gotta stick
It. You're never done. Always keep, I set a goal for myself a month ago. You were asking me before the podcast started, you're like, Hey your social media's been doing good. We love your, whatever, couple videos.
And I was like, yeah, like we doubled our followers in a couple weeks. And the whole reason that's happening was because I was in my bedroom one day and I said to my wife as I was walking out, I was like, you know what I wanna do, like just for kicks. I was like, I wanna see if I can get to 10,000 followers on Instagram in 12 months from today.
Just to see if [00:10:00] I can do it. Not because I care, because I like, just as a goal, like challenge to myself. I was like, and so that's why we doubled our followers in that fast, and that's why I've been posting like more entertaining, content and stuff like that. And it's just a side thing that, I can just a personal goal and see if I can do it.
So follow to see if if that happens. Yeah.
Rory Loughran: I'll include your your handle at the end. Definitely. I was curious too, like. How much of a plan, social media could be a little different. In terms of that, there, it's almost like the wild West where you just need to get things out. But when you decide to make a goal like that, I think what's really important is having that plan first.
Did you come up with any plan for social media in terms of oh, we wanna start doing this kind of stuff, or we wanna start posting this much, or if not social, is there another example of that with your farm? You've put that plan together to accomplish the goal, not just set the goal and, cause I think sometimes people can put that goal out there, but then there's not a real path to reaching or accomplishing it.[00:11:00]
Tom Bennett: Yeah, no, I always, I probably, to my detriment, I always set the goals and then I figure out how to make it happen afterwards. First, I did the math when I said it and I'm like, crap, I've gotta get 35 new followers a day or something.
That's not gonna happen. And then I started making some reels and I started getting a hundred and something followers a day, new ones. I'm like, oh, maybe this is possible. But, with social media, my goal there is more brand building. Just fun and light. Like I'm not trying to sell stuff on Instagram, cuz Instagram's like, na, yes, most of our followers are regional and local to us, probably.
I'm just trying to have fun on there and just post confident that people wanna consume. I'm not like, trying to sell people stuff and if you are using it as more of a sales avenue, which is fine. Keep in mind you should do, Three, maybe three posts that are fun.
Not trying to sell people on stuff, and then one post that's a sell post. If you're just constant, buy our meat bundle, oh, this is on sale, or buy this click link to follow. Like people are gonna tune you out like [00:12:00] they don't wanna be sold to all the time. What are you giving them? For them following you, you have to give 'em some entertainment or some knowledge or something.
Some farms come at it from they're more of an educator and they want to educate people. That's cool. That works. I'm just more of not so much in educating, I just make the Instagram stuff fun.
Rory Loughran: Yeah, and it is, it's Bennett Farms, Michigan on Instagram. If you guys wanna check 'em out, there is some really fun stuff on there. One of the other things I wanted to ask you about because like you just said, a lot of your social media content is just of focusing on the fun side of things and giving to people, giving 'em stuff to entertain them.
And we've talked so much about, like the numbers and the business side of things. At the end of the day, you are running a regenerative, sustainable farm. You're doing you're rotating your birds daily. You're rotating your hogs, I think you said every couple weeks. And your non GMO foods it's a really, a great farm that you are running and it's having a really great impact on your land.
How do you balance that? Cause that is, I think a things people worry about is, that I don't want to be just worrying [00:13:00] about profitability and end up with a farm that goes against their moral values. But making sure that you can run a sustainable farm sustainably.
Tom Bennett: If you're poor you're gonna have a sustainable farm because you won't be able to afford the stuff to do it the bad way. Basically, if you're starting out from nothing, we're all gonna start out as sustainable farms, because we don't have confinement buildings and things like that.
To me, there's never been any temptation as far as like to switch over to a conventional method. There's no incentives in it. I, it's like, what do I want to take on half million dollar loans for, to sell commodity pork? That's one of the things that why do people buy from me and not from, the grocery store, or because it's a higher quality product. If I lost that, I would lose my customer base. They're not buying from me because I'm the cheapest. Cause I'm not, everything I, they're buying from me is more expensive than they could get at other places. But you can, it's funny, I just got off an interview with a college graduate student from, I think it was Western Michigan or Michigan University.
She's doing I think like a thesis paper on regenerative agriculture and it's [00:14:00] place in like the future, economy. And and that was one of the things we were talking about is regenerative ag scalable and yeah, it is scalable. You could feed everyone in the country through regenerative practices.
The problem is that most people aren't willing to pay for it. Because it's always gonna cost a little more the processing cost, things like that. It's gonna be, McDonald's is never gonna sell a 99 cent pasture raised chicken sandwich and there's some people that can only afford that, the 99 cent sandwiches.
So it's, yeah, we stay true to who we are cause. It's what we do, it's what we believe in. And there's, we would have to build an entirely different business if we did it differently. So all our branding and everything would be out the window. So
Rory Loughran: Yeah.
Tom Bennett: Scale is not bad.
Like it's not evil. And I'm still small. 300 hogs a year. 6,000 to 10,000 chickens a year. A few hundred turkeys, like that's not big by anyone's standards, but you do have to get to a point to where here's basically [00:15:00] how it works. Okay? You're never gonna be able to make a living selling, I tell people the magic number to get to is a half million a year at a half million dollars in sales a year.
Just revenue. You can support a family off that like comfortably, as well as you could getting a hundred thousand dollars a year job off firm, like you'll live well, but you need to get to at least that skill because once you get to a certain size, your personal expenses in your life, those become a rounding error.
Imagine if, even if you were getting to keep so many cents per dollar of the more dollars you make, the more cents per dollar you get to keep. So at some point you've gotta get to a certain size and then your life expenses become a joke. My mortgage is like 1500- 1600 bucks a month for my house that we had built on the farm.
That's laughable. I spend a thousand dollars a week on milk. Like for that we from Amish country dairy that we re like your life expenses become a joke because it's insignificant. Once you reach a [00:16:00] certain volume of sales through your farm. So you do want to grow, but you want to grow profitably.
Rory Loughran: Yeah. As a final wrap up, what would be some of your advice, whether it's a new farmer or beginning farmer in kind of diving into this or maybe fine tuning some of this for their business?
Making sure that things are sustainable. That if they have a regenerative farm, that it, that farm will be around long enough for that their practices to actually make an. Which is I think the key to all of this is that, like you said at the start, you can have a sustainable farm that's good for the earth, but if your farm is only in business three years, then your impact on the earth will only last in three years.
Tom Bennett: you may have actually done more damage that way because while you're in business for those three years, just losing money on every single sale you make, you're screwing another farmer that's actually making money on the sales he makes for three, like you're flooding the market with another farm that's not gonna be around next year, that's selling their ground sausage for way less than they should.
Keeping sales from a farmer that will be here for 50 years. [00:17:00] So you're almost like, if you're gonna do it, do it for real, don't sell yourself short. You might run sales or specials to maybe try and gain some market share, but, yeah. One of the things I would say that would probably help the most, When you start out and you're doing this as a hobby farm, as a side hustle, start out doing bulk animals, whatever, you need to keep growing until the point to where you're going to break because you can't do it all anymore. Like when you get to the point to where you're about to have a mental breakdown because you cannot work your off arm job and continue to do the farming that you're doing because you've reached a point in sales that you're farming by headlamp every night in the dark.
You can't, that's when it's time to either quit your day job or scale back on the farming cuz it, you can't go like that forever. I took that as long as I could before I jumped into farming full time. And it probably shaved a couple years off my life at the end. It was rough.
It was so [00:18:00] rough. It wasn't good on your marriage. You'll all find this, you know that this transition is gonna be hard on, on your marriage on your lifestyle. Try and do as much as you can, but once you reach that point and make that jump, the first year is a little scary cuz you wake up oh my God, like the only income I have is from the farm.
What? But then after a while you realize those sales are always, it just keeps getting better. So the first year's scary. But it gets better. So yeah, do both until you can't do 'em anymore. And then make the leap. Don't quit your off farm job too early because you'll just end up back within with a job to support you, or maybe you don't want to quit your off farm job. Some people are just happy farming, on the side. It's just something to do and sell bulk animals and that's great too. Get a lot of the infrastructure stuff done out of the way while you still do have a steady job.
So that way, your first year in farming, you're not having to put in $10,000 worth of fences and buy $5,000 worth of chicken crate and all these things. Try and do those in your early years if [00:19:00] this is the direction you're going. That's what I would recommend.
Rory Loughran: Yeah. Awesome. Thanks so much Tom. What would you say is next at Bennett Farms? I know you, before we started recording, you were saying it's going into a little bit, hopefully quieter time of year, but what's ahead at the farm?
Tom Bennett: Oh yeah. So we're staying busy. I actually still have chickens on pasture right now, and I will have until December 6th. So I know I told you in the beginning, mother's Day through Halloween. But we had sold out of all of our chicken so fast throughout the summer because of some new markets. And we don't like selling out is a, like a product is not a good word around here.
Like we don't want that to happen. I know a lot of farmers are like sold out no dude, that's bad. That was, that means you failed to plan properly on like your forecast and sales. That's a, that's lost opportunity when you're sold out, so we ended up, I ended up squeezing in another batch of 800 birds.
And it was cold last week. It was rough, but we made it through and I only got a week left. So anyways, I guys still got chickens out here to take care of. But next year we're gonna go increase [00:20:00] chickens, increase turkeys, pigs will probably stay the same, maybe a little more, maybe 50 more than before.
But yeah, we wanna keep growing and we're gonna take on some more markets. Add. People ask me all the time, they're like, what's your end goal? Like, where's this going? Like, where are you trying to take this? When is enough? Enough? And honestly, I think what I'm trying to do right now is for the future of my farm, I want to grow our sales in this tri-state area.
Michigan, Indiana, Illinois, as as high as I can million multimillions. And direct consumer sales in this area. And once I've tapped that out or I've got this on autopilot, I'm gonna leave either my eldest daughter or a very capable farm manager here and I'm gonna go to Tennessee or another location that has metropolitan areas, but maybe there's a spot for me to fit in and build another farm.
Doing exactly what I did here. I'm gonna do it [00:21:00] somewhere south, 10 hours. So then I can even feral piglets and warmer weather in the winter, like in that three state regions. So it's I would like to start another farm within five years. Maybe that's my plan once I figure out that's after beef and after we completely dominate this footprint.
But it seems like a good idea to me.
Rory Loughran: Yeah. Does to me too. Awesome. Tom, thank you so much especially after we talked about how valuable time is for farmers. I appreciate you taking the time to come on here and talk with us.
Tom Bennett: yeah. No problem. Thank you guys.
Rory Loughran: I want to extend my thanks to Tom for joining us on this week's podcast episode here at Barn2Door.
We're humbled to support thousands of farms across the country, including Bennett Farms. If you would like to connect with Tom and other farm advisors, you can attend those Barned Door Connect sessions that we mentioned. You can register for those weekly sessions barn2door.com/connect . And for more information on Bennett Farms, you can follow them on their Instagram at Bennett Farms Michigan.
Thank you for tuning in. We'll see you next week.[00:22:00]