Planning for the Unexpected & Raising Money for your Farm Business with Tera Johnson
In this episode of the Direct Farm Podcast, we're delighted to host Tera Johnson, the founder of the Food Finance Institute (FFI). Tera shares the history behind FFI and how the institute works with sustainable food and farming businesses.
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Allyssa: 0:26
Welcome to the Direct Farm Podcast. We've got a great conversation for you today with FFI also known as the Food Finance institute. I am delighted to welcome Tera Johnson, Founder and Director for the Food Finance Institute. Welcome Tera!
Tera Johnson: 0:44
Oh, thank you. It's great to be here.
Allyssa: 0:47
So great to have you here and really excited for this conversation. So as the Founder of the Food Finance Institute, tell us a little bit more about your vision behind starting this organization. What needs were you trying to meet? How it was founded? Just a little bit more about the background.
Tera Johnson: 1:04
Sure. So I founded the food finance Institute at the University of Wisconsin. And I did that after I sold my company. People know me as the person who founded Tera's Whey the brand Tera's Whey, which is a whey protein product that you would find in a hippie co-op or a Whole Foods anywhere in the country. And after I sold the company, I was too young to retire basically and trying to figure out how I wanted to make a difference in the next chapter of my career. I realized that I learned so much about money doing Tera's Whey. I had to raise $14 million to start that business before we had any sales and which is not an easy thing to do, right. Whether I liked the process or not, I learned a lot about it and I realized that that skill was something that gets in the way of a lot of farms when they're trying to grow their business. And even when they're starting, but even more when they're growing, right. And wouldn't it be great if I could work with farmers who are trying to do that on helping them raise money and achieving their vision. So I went to the university and pitched it and they said, yes. So that was 2013. And here we are. When I first started, I said our mission is to make sure that every value added farmer, food entrepreneur, and food system enterprise that wanted to raise money could do it. That is a lofty goal, right. But I feel like visions needs to be inspiring and lofty. Right. So that was my, that was my vision at the time. And how I executed on that initially was I started consulting. So I started working with farmers and food entrepreneurs and soon realized there was kind of an infinite need for the work that we do, because it's such a problem for so many enterprises. So then I said, well, what could I do next? One solution was to hire more consultants, which we'd done. But I also spent a lot of time thinking about the process that I was always going through with clients. To help them raise money. And then I said, is there a way to accelerate that? And so that was what got me to create the bootcamps that I run around the country now. Well now it's all virtual, right. But I was on airplanes a lot. And other, I call those immersion training. And by immersive, I mean it's training and consulting bundled together intensely. So other immersion trainings, we have one that is specifically for raising equity. Cause I feel I went through that as an entrepreneur. You know, you have lofty things, you have a lot to get done and you don't want it to take six months. You don't have six months, right. So I always wanted, I wanted things that were challenging. And that would move me through something that I needed to do really efficiently. And so that was that spirit that went into designing the immersion stuff that we do anyway.
Allyssa: 4:10
A few things. I love how it's a passion project of yours that you have experienced going through some of those pain points that farmers are going through currently trying to start a business, having a stable business year over year, and then also that you identified the need. You found a way to meet that need, but you started small too, and you evolved over the years. So tell us a little bit more about your partnership with the university of Wisconsin system administration. How are you able to partner with them? Work with them? I understand that you're part of the business and entrepreneurship program. So how do you support businesses at the, as they're trying to achieve that financial stability with their business?
Tera Johnson: 4:54
Yeah. So what, the reason I wanted to do this at the university was usually in the private sector, if I were billing out for what I do, it's kind of like being an investment banker. So it's very expensive. And farmers can't afford that, right? And years ago the path was, you'd go to your bank, you'd get a loan, that was kind of it, right. It's like, it was kind of straight forward. It's not that way anymore, but they can't afford to pay for that kind of service. And I'm in a position because I sold my company that I could say, you know, what, what if we did this in a university? So I don't have to be charging investment banker rates to do the work that I, I do. And the Institute for Business and Entrepreneurship is a great home for us because the small business development center is located in there. There's also something called the center for technology commercialization that works on innovation. And there's a lot of work on helping companies get SVIR funding. And there's some research data groups in there too. So there's a lot of other resources that I can bring to bear because I'm where I am, right. And we have a big university behind us too. So if we are doing grant writing, which we do to, to fund some of our programs these days. We have this whole apparatus behind us who knows how to implement that and that's great because then I don't have to develop that. It's been a really good partnership and the university has been excited about it and very open to my work in not just in Wisconsin. So that was important to me because the need for what we do is national. Probably even international, right. But it's not a, it's not a local thing. So we certainly do work in Wisconsin and we work in other States too.
Allyssa: 6:44
Well, it's great to just have the access to those resources because it's more than just, okay, read a blog. This is how you start a business, but giving that, you know, one-on-one coaching the consulting and then having the university be able to provide you with additional resources or support there too. So tell us a little bit more about the clients that you serve. You work with various businesses representing different industries. So what types of farms and what types of other businesses do you work with through FFI?
Tera Johnson: 7:12
Yeah, so we, I tell people that we don't do conventional farms. And I say that because. There are so many resources out there. If you were a conventional dairy Farmer or you raised corn and beans, or you know, those kinds of farms, because there's extension exists to help folks like that. And where we come in is when people start doing value added, right. Or they're starting up completely value added, right. So, so this could be. It could be a fifth generation orchard that suddenly realizes that if they want to pass this onto a sixth generation. They can't just be selling apples to the packing house anymore. They're going to have to add value somehow, and maybe they're going to make juice, or maybe they're going to make open a cidery or something like that. Like that's when we get involved, because that's where our expertise is. In helping what I tell people, you're becoming a CPG company, when you do something like that. Right. And that's. That intersection between agriculture and CPG is what we're really good at. And so we work with farms who are in phases like that. And then we also work with food brands who are in, you know, trying to do the same thing essentially. We also do some work. I call it food system work because there are initiatives that tend to be nonprofits, but not always that are trying to solve gaps in the supply chain or. Social impact, you know, access to neighborhoods that have problems with access to good food and things like that. They're trying to solve this food system problem. We do work with them too, because they're kind of all part of the ecosystem of food.
Allyssa: 8:57
Yeah, and I think it's so important to you to touch on the collaborative aspect of it, both on the producer side, but also like you touched on, on the buyer and the consumer side it's it's education too. So kind of bridging the gap there with your collaborative network. That's I think a great resource for folks who maybe are looking for mentorship or others who are looking for resources and tools, it combines the best of both worlds. Tell us a little bit more about that and how the businesses or the clients that you work with are able to take their business to the next level, by having access to that collaborative network.
Tera Johnson: 9:29
Sure. So this was kind of early on too. When I came to the epiphany that the business model, wasn't going to be just hiring a bunch of consultants, right. Which it could have been, but I was like, how can I collaborate with people who are already out here doing this kind of work? And so we wrote a federal grant that we got, to do consultant training. So what I realized was people didn't really know the kind of finance work that we do. But they, they know some they're already working with plenty of farms around the country. Right. So what if we went and did training with them? So I designed his training and I took that on the road. And that is become this amazing network around the country for us. So we've got I want to, I don't know the exact number, but it's well over a hundred people that I've trained around the country. And they exist now as a network. So if a client comes to us and they're in Colorado, right. We're not in Colorado, but we've worked with people in Colorado, right. So we can connect people with the best resources. And now the other thing is, actually COVID accelerated this. It kinda doesn't in some ways matter where you are for some of this stuff anymore. Right. So we can connect people with like, what is the best accounting firm we've found who can work with this kind of business, right? Like what for example is scaling food business. That's going to raise a lot of equity needs a certain kind of like they need rigorous accounting and fractional CFO work. Right. We know where we can send them because of this work that we've been doing. So it just really amplifies the effectiveness to, to have this collaborative network around the country. Both, because it enables us to work with people from around the country, and also because it kind of brings this best practice to the work we do.
Allyssa: 11:29
And just like you touched on too, it's been an interesting year to say the least. So trying to figure out how to navigate, you know, when people are all online. So trying to have those trainings go virtual. And also in addition to that scenario planning. Because there are so many unknowns right now thinking about the future, but also thinking about the past this past year, a lot of businesses had to pivot and go down an uncertain road that maybe they didn't have experience or were unsure of where it would lead them to. So maybe tell us a little bit more about how you approach scenario planning as you are training and mentoring these clients.
Tera Johnson: 12:06
That's an awesome question. When COVID hit my, cause I have this network of people I've worked with around the country. Right. I was like, I gotta get the network together because things were devolving so fast, right? So I started a huddle every Monday I was like, okay, I'm going to get, I'm just going to be on. We're going to talk about what's going on and what it means for our clients. And I had one for entrepreneurs too. So I did that. And it became really clear to me that we needed a way to do scenario planning because there was so much uncertainty. We were sort of in that place before COVID right. Between climate change and, changing food preferences and consumers and stuff. But then COVID came. It's like, no, we have to look at like, if COVID goes this way, what are we going to do? If it goes that way, what are we going to do? And scenario planning is that's what it does. It's meant to help people plan to have these scenarios. So I said that on my huddle and some, one of the consultants who happens to run an impact fund on the East coast said. Well, that's what I do in my consulting practice beyond what we've worked on together with the funding. Okay, we got to talk. So we talked and he's, he's translated. He's trained by like Seminole thinkers in the world of scenario planning at Harvard and it's and really understands it. And scenario planning is usually something that very big companies do, right? Like huge teams and Exxon would do scenario planning, right. The military. But I was like, what would it look like if we created an online thing? And we had multiple companies go through it together, so, or farms come and do it together. It wouldn't be this like, think tanky retreaty thing that is sort of an elitist thing, but it's something for, for like your average food entrepreneur or farmer. And so we took the process that he used and Eric did an amazing job. Helping us translate it into something that we could deliver online. And make it accessible to to a much, much broader group of people. And it's an amazing thing. Cause I've had a business career, we've been through strategic planning where it was like, Oh yeah, we kind of talk about, you know, goals for next year. Really wasn't very strategic. It's just more like operational planning and this process makes you strategic thinker. It's building this muscle for doing that, and it is amazing. So I'm super excited that we implemented that we actually just finished our second group yesterday. And yeah, it's terrific cause you leave, not just with one plan, that's, what's so different, right? You, you leave with a way to think about planning and uncertainty and a couple of different paths that could all three equally be what the future is for you, but you have a way to understand, okay. If this future is what happens. Then we're going to do the following things. Or if this future's what happens, then we're going to do the following things and you can see people's anxiety just go down. Right. Because now it's not like. This nailbiting "Oh my God, what are we going to do?" If you know what I mean? Cause we don't have a plan and everything is changing and that causes massive anxiety. So it's very cool. I'm really glad you brought that up because it's a new addition to what we do that grew out of COVID that we're going to do it all the time. Cause I think it's really helpful for people.
Allyssa: 15:42
Yeah, I think it's just timely, you know. Just thinking about what we've been through as a society throughout the economy, everything that's been happening. But if you think about it really there's uncertainties, anytime you start a business. So being able to start it now, but also knowing that, you know, you've had great success with these businesses and how they're learning to pivot quickly and plan for the future even a year from now, when, you know, there could be other things that are uncertain in their business, so.
Tera Johnson: 16:09
That's what we tell people and it. And it gives it absolves you from feeling as a leader that you have to be able to anticipate the future. Like when you run businesses that often have, and entrepreneurs, right. Investors are asking you like, well, what do you, what is this going to do? It's a source of a lot of anxiety, I think for a lot of entrepreneurs and for farmers, you know, they're dealing with climate change, that's not going to change. It's going to get worse, right? Like how do you build a resilient farm business model when you have to face climate change. I mean, that in and of itself is a reason to go into scenario planning, right. Cause you're going to have different scenarios for what is going to be possible on your farm.
Allyssa: 16:53
Yeah. Kind of want to talk a little bit more on the consultant side, because obviously you have the consultants they're training these clients and the businesses and the farmers. This is how you approach scenario planning, but you have to also train your consultants to be prepared, to have those conversations with them. So what steps do prospective consultants need to take as they become trained and certified? And how does the consulting training process work?
Tera Johnson: 17:20
Sure. So I do these consultant trainings. I did a lot of them initially because we were rolling out the program, but I do them a couple times a year. It's all virtual and it had gone virtual. This part had gone virtual even before COVID for the most part, because it's a selective thing of people around the country. But people who work in this space who've want to know more about finance in particular. Well, there's, I call it the 1.0 level, which is actually quite intensive. I tell people I have two kids who went to MIT and another one who went to the university here. They're very smart people, my kids. And I tell people my philosophy when they were little is , I don't want to be the filter about what people know and what they should be able to learn and what they can't learn at any one point in time, right. Cause I think we dumbed down the universe when we do that. So I teach pretty intensely, right. And then people learn what they are ready to learn out of it. And for some people they can, they're ready for a lot of it. Some of them learn pieces of it. So I've had people tell me, you know, maybe you should just come back and do the same thing again. Cause I think I'd be ready to learn something more. And I've actually, I had people join subsequent groups because they wanted to do that, which is. Totally cool with me. And then now I'm developing and about to take out a next round, like the 2.0 training. And so things like working with people coming out of scenario planning, because it's a new program for us. We'll, that'll be part of it and things and things like how do you finance processing businesses? That's a thing that has come out of COVID right. That people are looking for more. Locally processed meat is a big example. And understanding how you finance that is, is it's different than other kinds of businesses. So that that's an example of a topic that will be coming around with the next level of training. So, yeah, and a lot of those folks, I do a mastermind group, so they stay in touch with me. We're kind of like raising each other's votes as this goes on. Right. And it's, it's super cool to see people's consulting practices evolve as I've been engaged with them. It's just awesome to see.
Allyssa: 19:37
That's great to see the growth and how you've evolved. You've taken the feedback of the clients, but also the consultants too. Where's the need? How can we prepare you to prepare others as well?
Tera Johnson: 19:46
We couldn't accomplish anywhere near this if we did not have this network, the collaborative network you mentioned before. That's what enables us to do the amount of things we do.
Allyssa: 19:57
And then in addition to that, you have this digital resource hub, you have the educational content. You also have a paid version with additional resources, trainings, you have a community of practitioners. So you are providing multiple resources and avenues for clients to get the information that they need to be successful. And you also have edible alpha, which do you want to share a little bit more about that as well?
Tera Johnson: 20:22
sure. I'll share. So Edible Alpha is my podcast. I'm always thinking about like, how do people want to learn, right. Like it's not the way people used to want to learn necessarily. And so I thought what a great way to get content out to people who are going to learn that way. So I started it a while ago now. So I was kind of early to the podcast world and and I have been amazed at the quality of the content that is coming in these podcast interviews. In the sense that I pick people who are entrepreneurs or farmers or anybody in the financial ecosystem around them, like, so lenders or investors or funds or I dunno, turnaround consultants, like all of the people who would be doing it, the ecosystem. And I interviewed them on the podcast and it's been really useful material. So, I think they're really useful for people to just listen to it's it's wonderful to be able to take portions of it and then deployed into curriculum. I tell people there's no textbook for what we do. Right. It's comes out of experience and it's changing like right in front of us. So we need vehicles for educating that, keep up with that. And I find a podcast is a really good way to do that. So Edible Alpha has proven to be a really good resource for people. At least that's the feedback we get and we've had, I don't know, we're probably cause we've been at this for a while. I think we're probably hitting something like 45,000 downloads.
Allyssa: 21:58
That's awesome. And just thinking about the next generation of entrepreneurs too, and how, like you said, people learn differently now than they did 10 years ago, 20 years ago, et cetera. So trying to meet people where they're at and trying to teach them in a way that makes sense to them and how they can glean. You know, helpful tips or best practices and apply it to their business too. So are you finding that kind of the younger generation is able to absorb this information through the podcast or some of these other digital channels as well?
Tera Johnson: 22:27
I would say though, that us older folks have come along. So, so, You . Know, I'm really conscious about embedding it into other things that we do. So in consultant training, I'll be like, okay, so this is the following 10 podcasts where we covered this. So you may want, you may be interested in listening to it. And then they listened to it themselves, but then they also share it with clients . So it becomes a tool for them to teach also in, in their client work. So it's been super helpful to the whole network because of that.
Allyssa: 23:03
That's that's great to see that it's beneficial to everybody. I think podcasts are, you know, a way that people can be doing a task listening in and still absorbing information. Not everyone has cable, they don't have TV or, you know, maybe they don't have access to, you know, a computer all the time, but pop in a podcast while you're, you know, doing the dishes or something. And you can, you know, multitask at the same time. So.
Tera Johnson: 23:28
And in rural areas in particular that's an issue, right? The bandwidth can be an issue for rural areas. I love the accessibility of podcasts.
Allyssa: 23:37
How would you describe the conversation amongst both your clients, but also your consultants as well? We touched on earlier last year, the many uncertainties going into this year as well. So how has the pandemic effected how you train your clients and how your clients are able to operate their business in this time?
Tera Johnson: 23:56
Yeah, well, I think the pivot to online has been, you know, Something that we're all seeing and all dealing with. Right. What's been fantastic is so some of our clients or our farms that we work with were already online before COVID right. They had made that leap the ones that had already been online, their businesses exploded. So. They had more business than ever, but that's, you know, you can grow too fast, too. Right? So you grow too fast. You don't have enough working capital to keep up. Like, ironically, you can, you can grow yourself out of business if you grow too fast. So we had a group of people who were in that situation. And because of COVID the other group I would say would be people who weren't online before. The learning curve is, big, right. To get online. Don't really have a good website. We don't have a shopping cart. We don't have, you know, there's all kinds of things that need to get put into place. And then. Understanding how to use social media to do the promotion effectively and all that kind of stuff. So that whole area of digital deployment, if you want to call it, that was a huge topic this year. And capital wise, like how are we going to stay in business? I mean, I had people who, who were literally had a hundred percent of their customers because they, they did restaurants. Right. Farm said would supply restaurants evaporated. Right. So that's the turnaround skills, like how do you, how do you work with people about. Basically hoarding cash, right? To try to build a strategy, to keep yourself in business financially until things improve. We did a lot of that kind of work. And I don't think we're done. I mean, we, you know, PPP and EIDL came at the right time and they've been super helpful and they've kept people going. There's still a lot of uncertainty I feel like it's like a few months ahead of us. Some of the dark underbelly of this hasn't really been apparent yet. So I mean, sadly, I think it's coming, so we still work about it with everybody on all of that. And for me, if you've got a 13 week rolling cashflow statement that says you're not gonna run out of money and and you have like a trajectory that looks like it can work and maybe some of these scenario planning kind of skills that help you to adapt. Like that's, that's kind of the sweet spot of where you want to be right now
Allyssa: 26:26
Yeah. Is there success story that you have in mind of a client who was able to pivot their business model, go online or experience success in a time when a lot of us were like, where's this going to go from here?
Tera Johnson: 26:41
Sure. So they already did have an online store, but they didn't deliver direct to consumer. So they had to pivot, which doesn't sound like a big deal, but it's actually a big deal because now you've got to actually pack individual orders, right. And you have to figure out shipping and you have to price for shipping, and you've got to make sure it actually works. And that FedEx will show up at your, which seems like it would be easy, but it's not, none of this is easy. And so they managed to in, I think it was like three weeks. They sent out a thing, not delivering anymore. You can order it and we'll come and it'll come in a FedEx box. And they pivoted really fast. And I, I think their business was up like, 200, 300%. And they weren't little before. I mean, they were decent sized, but that was a very big shift. Because one day shipping FedEx from their farm can get them to Chicago and Minneapolis. Right. And Chicago, that metro market is 10 million people. Minneapolis is six. And then you add on Madison and Milwaukee right now we're, I don't know, 18 million, 20 million people within a day shipping. Right. So that is really different than the County they live in.
Allyssa: 27:59
Yeah. I mean, it's great to hear because one out of three or, you know, shopping for food online, and that trend is continues to go up and to the right. So especially now it's the time like you said, to get online and if you're not, you know, trying to figure out a way, if that's a viable option to you, there's a lot of open green pasture there with in terms of, you know, the, the market. So it's kind of untapped at this point. So being able to serve your local community and experienced big success there too, especially with restaurants closing down and other businesses too. So trying to pivot in that time, what would you say would be I guess your preferred resource or tool or for farmers specifically what would you recommend for them? What best practice or advice would you have for farmers during this time?
Tera Johnson: 28:47
You know, farmers, it's interesting. If you're a food company and you go to a bank, if you don't have a three year performance that is you know, forecasting out for three years, you don't get money. Like they're like, Nope, we need to see this in order to right. In the farm world, if you go to an ag lender they'll like, well, what is your cashflow for the next year look like, right. They may not even require a lot of documentation. That worked really well in a time where we didn't have all this uncertainty, but now we have all this uncertainty. And actually I think the banking community is doing everybody a disservice and not pushing back and saying, no, no, we really want to see what this plan looks like. Right. Financial plan looks like in, in more depth, right? So it isn't just your budget for this year. Because there is so much uncertainty and we have to be prepared for change and the money side of it right. In a way that we never had to before. So I use a tool that is a a pretty comprehensive annual cashflow forecast, but it's something that I think is approachable for people who have been farming. This is probably more detailed than they're used to, and then we help people turn that into something that goes for three years. So you get more foresight into the money side of your farm. So that would be one thing. And then the other thing, I think this is all emergent, but opportunities to just maximize the ability to take advantage of conservation services, revenue, streams. They're going to be more and more of them right there. They're coming right now. And they're going to be more of them. And I look at farms that I work with and they're not even really using in necessarily things that already exist. Like equip is an example of of NRCS. Program that is a cost share. So they, they match 50 50, and you can use that for fencing and movable fencing and implanting pastures and all kinds of things that farms do, the kinds of farms that we work with do and there aren't really being entirely utilized. Right. So I think moving forward as we're all going to be trying to make our farms more regenerative and also just more resilient in the face of climate change, it's not just a cost, it's actually going to become a revenue stream for farm. So yeah, I really encourage people to take advantage of that.
Allyssa: 31:16
And I think you brought up a great point of the cashflow and how important that is. It's not just, okay. You have money in the bank today, but what does your financial situation look like a year from now two years from now? Are you able to sustain, you know, throughout this time? So would you say that in terms of recurring cashflow, have you noticed that farmers are adding in delivery or subscriptions or other ways or avenues to ensure that they have that cashflow longterm?
Tera Johnson: 31:45
Yeah. That's interesting question. Right. So, this goes with that maturation of getting online and having, right having the plan for how you're going to sell online. I think like the CSA model of prepayment and you get a share, right. What I tell farmers is that the consumer is getting accustomed to that, right. A certain set of consumers is, and that's pain ahead of time. Great for cashflow, right. Spreading the risk. There's a lot of great things about it. And there are ways to translate that into other things. So people are like, well, I do meat. Yeah, you do meat, but people will do a CSA for meat. Or they would do a subscription for me, right. That, or they, or you could put $500 on. You know, upfront, and then you order from a shopping cart, like you could do these things with consumers. I think a surprising few farmers have actually implemented things like that, but other than CSA, which people seem to understand. So I think it's kind of like, let's spread that out and, and make it more ubiquitous in how farmers go to market. It would help them so much if they did that.
Allyssa: 32:57
For sure. And even thinking about value added products or partnerships with other farmers too, you don't have to limit to just the products that you have available on your farm. If you're able to partner with another local farm and work together, then that's another option too, for revenue stream.
Tera Johnson: 33:13
Yeah, totally. Yep. Other Farmers, other products, you don't have to make all the products. You know, actually the hard part I think is, building the customer base actually like that, that exercise of getting good at that is the hardest part for people. I think, and so once you get good at that, then that's like gold, because now you can bring in other products that you may not, you know, you don't need to do. Maybe you don't do lamb anymore. You work with somebody else who does lamb. Right. And you can get more efficient at pigs, or I don't know, right there, it just opens up so much as you start building up the consumer side of your business,
Allyssa: 33:53
We often times talk about the four levers for farm success. So that's the price, the quality, brand, and convenience. And I think sometimes it's so easy to lean in on quality. Okay. We have a great quality product, but then like you mentioned that missing piece of brand. So how do you market it? It's a great product, but you have to be able to tell people about it and share your story and price it at the right price. Because if you undervalue your product longterm, how are you going to sustain as a business? And then you also have to know your market. So providing those convenient options too is critical.
Tera Johnson: 34:25
I'll never forget. I was doing a bootcamp in a really rural area in Wisconsin, and there was a pig farmer there who, who has just beautiful Berkshire pork. I mean, just great. Right. She's has a CSA and she's selling online. And I, one of the things that people do with me in bootcamp is a differentiation exercise, where they list their their competition. And I make them look at how much they charge for their product compared to, and whatever other attributes. So she came to me and said, Oh my God, I realized when I did this research that I'm charging like half of what people are charging, right. Yeah. And it's because if you ask your neighbor in rural Wisconsin, how much you're going to pay for pork chops, they're going to tell you. A very low price. Right. They're going to tell you commodity at the Piggly wiggly. Yes. That is the name of a chain of grocery store. So yeah, but that's not Berkshire pork. That's not heritage pork. That's not, you know, lives a life outdoors in deep bedded pens. Like there's nothing of that in that pork. Right. So I think that whole thought process is hard for farmers of how much is. What I make worth, right? That idea is really different. And they talk to their neighbors at church or whatever, and they won't cause, but that's not your target consumer. Right? So that's this whole CPG way of thinking that that is so different for farmers, right? We're not just taking it to the, taking it to the. Grain elevator anymore and getting the price of the day, right? It's with no, no differentiation.
Allyssa: 36:07
Well, knowing your market. Cause I think sometimes it can be overwhelming and you're trying to be all things to all people. And you're better off focusing on your local market where you're able to price your products at what they're valued by the consumer. And you're able to meet them where they're at and have a business that's thriving because you're able to see that value and provide that value for your consumer. But it's a targeted group. It's strategic.
Tera Johnson: 36:29
I mean, the sad part is for a lot of the people we work with who were in really rural areas, they can't sell locally. You know, there are fewer people in Iowa now than there were like 20 years ago. Yeah. If you're not in a real rural state, you don't realize what's been going on has been contraction and they won't pay a premium. Right. So, so people like that have to go somewhere else. So I spend a lot of time helping people identify, well, who is your target consumer? Are they here? No. Then you've got to go where they are. You have to figure out a way to go somewhere else. Depends where you're located, right. For farms around Madison, no problem. Right. We've got, we've got enough people here where foodie culture will pay ridiculous amounts for food on this so, yeah, so it really depends.
Allyssa: 37:21
Before we sign off Tera, is there one final piece of advice that you would like to share?
Tera Johnson: 37:25
Sure. I was in a Vistage group when I did Tera's Whey. But one of the really wise people in that group he took his electrical contracting firm from over from his dad. It was two trucks. And now they have over a billion dollars in sales every year. So this one person now he's been at this for 40 some years. And he said to me, Tera, it's not about you. It's about your team. And I was like, huh, okay. You've got to start up. You can't hire everybody, but you can still have a team. That guided me so much when I did Tera's Whey and it guides what I'm doing right now. And I love to see that happen when entrepreneurs go, Oh yeah. You know, I can surround myself with people who are going to be on my team. I don't have to hire them all. In the beginning you can't. And it is for all of us, it's about a team.
Allyssa: 38:19
For sure. Yeah. We're in this together and it's the collaborative aspect. It's the partnership aspect. And knowing that you have those resources, not only the tangible resources, but people to, you know, other people to bounce ideas off of too. It's truly valuable. Well, thank you Tera so much for the conversation today. I truly enjoy chatting with you.
Tera Johnson: 38:39
Oh, me too. It's been great.
Allyssa: 38:41
Yeah, this is terrific. I want to extend my thanks again to you, Tera and the entire team at the Food Finance institute and the Institute for Business and Entrepreneurship and the University of Wisconsin system. At Barn2Door, we are delighted to partner with colleges, universities, organizations, across the country to support farmers as they look to grow their farm business. For more information on FFI you can visit their website, foodfinanceinstitute.org, and to learn more about Barn2Door, including access to numerous free resources and best practices for your farm, you can go to barn2door.com/resources. Thank you for tuning in, and we will see you next week.