I like to think of the operations and sales team as the invading army — looking to conquer more acres, market share and revenue.

Meanwhile the accounting and finance team functions in a supporting role as the supply lines, providing current information, forecasts and strategy.

Without the invading army, there is no business. But without the accounting and finance team, the invading army operates without up-to-date information and may eventually run out of supplies (cash).

Building the finance team for your agribusiness or invading army will require the right mix of processes, technology and people.

Processes

We start with processes because they are less expensive than technology and people.

Processes reduce waste, complexity and errors, and they allow a business to scale. Processes are more detailed than high level policies, but less descriptive than procedures. Processes are less of an issue when the owner/manager does everything, but they become more important as you start to hire employees.

Administrative processes include identifying who reads emails, who pays the bills and who has credit card and online banking access. Admin processes answer questions, such as how you want to pay vendors and receive payment from customers. Cheque fraud still exists, and online banking fraudsters can mimic company employees, so a good process is to always verify new banking information received online independently with the employee over the phone.

Financial reporting processes include how often financial reports are prepared and for whom. Are there accrual accounting adjustments? Sometimes people do what’s inspected and not what’s expected.

Is anyone reviewing the financial reports that are being prepared? Some business owners don’t have the time, experience or training to review reports. They need a trusted advisor to tell them what they need to know so they can execute their next business decision.

Technology

Once high-level administrative processes and financial reporting cadence are determined you can begin shopping for technology and software solutions. The options can quickly feel overwhelming. There are all types of software: payroll, bookkeeping, customer relationship management (CRM), and financial planning and analysis (F, P & A) software for budgeting and forecasting. Not to mention tax software, cash management and payables software and digital receipt software to name a few more.

When you combine these different solutions into one platform you have an ERP, an enterprise resource planning software solution. The reason companies don’t go directly to an ERP solution is the cost of implementation and onboarding.

Your software subscriptions and digital infrastructure together make up your technology (tech) stack. Too few software solutions and you risk slow, manual, error-prone processes. Too many software solutions and you run the risk of creating more manual processes to reconcile them all. Whether it’s payroll, invoicing or accounting records, companies require a source of truth they can rely on.

People

One of your initial decisions is whether you require an in-house or remote finance team or some combination.

An in-house team can gel faster and there’s less room for miscommunication but limits you to talent within driving distance.

A virtual team will have to work harder at processes and building connection but allows you to hire from across the country and the world.

Founders and owners should start with hiring administrative and bookkeeping positions first. Otherwise, they’re hiring at a higher price point to do this work.

Sometimes owners/managers do the bookkeeping themselves. They have the best pulse on their business, and this isn’t necessarily a bad thing. However, growth involves more transactions, people and decision-making, and bookkeeping is a common role to hire or “farm” out.

In general, bookkeepers and controllers focus on reconciling historical information. Financial planning and analysis pros and chief financial officers (CFOs) focus on go-forward forecasting and strategy. Often, companies have one person doing everything from bookkeeping, cash flow, strategy, HR and IT. Part-time contractors and fractional professionals should be considered for their expertise and to prevent burnout.

Stay ahead of the curve

In general, agriculture is ahead of the curve in adopting remote and digital finance teams because agribusinesses are often in remote rural settings.

Due to the current speed of business, even in-house teams require fast, reliable internet connections. Connecting your finance team with better processes, the right tech stack and people should alleviate the growing pains of your agribusiness.

The post How to grow a finance team for your agribusiness appeared first on Country Guide.

Emotional intelligence, first identified by researchers John Mayer and Peter Salovey in 1990, was originally presented as the ability to understand one’s own emotions (and to manage them effectively), as well as to recognize and influence the emotions of others. Sometimes referred to as EQ, or emotional quotient to distinguish it from IQ, or intelligence quotient, the concept was popularized by psychologist Daniel Goleman in his 2012 best-selling book Emotional Intelligence: Why it Can Matter More than IQ.

At its core, TraceyGurton, who teaches at the University of British Columbia Sauder School of Business in Vancouver, says emotional intelligence includes self-awareness, self-management (which covers self-regulation and self-motivation), social awareness and social skills. These human relations skills, or “people skills,” enable us to work with others more effectively.

Although emotional intelligence does not come naturally to everyone, Gurton, who teaches an emotional intelligence course for managers, says we can learn and get better at it with effort. According to Gurton, EQ training should involve some thoughtful self-reflection, feedback seeking, readings, facilitated workshop delivery, a lot of practice (activities, discussions, challenges), and a chance to interact and improve alongside others in a live setting.

Outcomes should include a clearer understanding of your own personal core values, your strengths and weaknesses and your leadership style. “We would also hope to enhance our confidence in giving and receiving feedback, enjoy improved communication with others, display a less reactive style of handling challenging situations, more empathetic interactions, and an appreciation of the gifts and talents of others,” says Gurton.

While it can be difficult to measure the impact of EQ training on the bottom line, Gurton says if managers choose to put their new skills into action, productivity, employee engagement, organizational commitment and overall organizational culture could be expected to improve.

As an added bonus, strengthening our EQ skills should pay off in our personal relationships as well as on the job. Gurton explains that training provides a journey of self-discovery, including how and why we come across to others the way we do. “When we become more self-aware, more mindful, more approachable, more civil, and yet also clear with expectations, thoughts and feelings, we become better and potentially humbler versions of ourselves. That cannot help but transfer into our regular everyday lives.”

EQ can cost you more than you know

Leadership coach Kelly Dobson says he is often approached by farmers who aren’t sure what the problem is but know something has to change. They may be suffering from chronic stress or there are recurring problems in the farm business, such as high employee turnover, that they haven’t been able to solve.

Dobson, who is also the leader of a fourth-generation farm in Fairfax, Man., works with his coaching clients to help them see how self-awareness, well-being, a growth mindset and business management are connected.

His clients tell him that one of the first things they notice after they start leadership coaching is that their stress levels have decreased. They also find they are “capable of more than they thought… that they can do more with the resources they have,” says Dobson.

It’s also common for farmers to approach Dobson looking for solutions because they are having a problem with someone else. But he points out that you can’t change other people, you can only change how you respond to them. That’s a breakthrough for many people, he says.

With greater self-awareness also comes improved communication. With more clarity, Dobson says people are able “to find the right time, right place, right tone and right words” to have the hard conversations with employees, family members and advisors.

He says that when people aren’t clear with one another, there’s a lot of energy tied up. “It’s exhausting to be stuck. It wears them down.” But when people “figure out what they want, they are in alignment and can take action to move forward.”

Fortunately, this is a skill set that can be learned with coaching and training, says Dobson. “We don’t have to be limited by our unconscious behaviour.”

Dobson says there are several ways to cultivate more self-awareness.

For starters, he says it’s about having a growth mindset, acknowledging “I don’t know” and surrounding yourself with others who have a different skill set.

When we are more self-aware, we also become more curious about others. “Curiosity creates clarity with fewer assumptions about the other person’s story,” he says.

Breathwork and meditation are tools that can help us regulate our emotions and nervous system. Too often we’re holding our breath or breathing shallowly as a result of chronic muscle tension which can lead to physical health issues such as high blood pressure.

Dobson says it’s also important to prioritize our physical health. “If you’re exhausted or suffering from burnout or you’re tired, haven’t eaten well, or aren’t hydrated, you won’t be showing up at your best.” There have been times, he says, when it has been necessary to help a client get into a better place mentally or physically before beginning the work to increase self-awareness.

Becoming more self-aware on our own is difficult, so Dobson recommends surrounding yourself with a support system — a coach or a mentor — who can help you develop this skill set. He says it’s possible to see big improvements even in a few months. “For the engaged client, the process is life changing.”

That’s been the case for Craig Lehr, a third-generation farmer near Medicine Hat, Alta. He says that being coached by Dobson has helped him to manage his own reactions so he can be a better manager. As a result, he’s more confident, better at recognizing and controlling his anxiety, and communicating.

A partner at Short Grass Ranches, Lehr says the operation’s land base and number of cattle have grown during the past two decades. At the same time, family members, who were also partners, have left and been replaced with staff. He has found managing staff is very different from working with partners.

Lehr realized he was micromanaging his staff instead of enabling them. “I would have run myself into the ground,” he says. Now, he keeps the vision of the kind of manager he wants to be top-of-mind to guide his interactions with staff. This has allowed him to take time away from the farm which he says is important for maintaining balance.

Lehr says he’s also making better decisions now, which has a direct financial benefit. “A poor decision can cost you a lot in a hurry,” he says. “It could cost hundreds of thousands of dollars or even millions.”

But the changes didn’t happen overnight. “There’s a learning curve. You need to do something many times for it to be second nature… I still make mistakes sometimes,” says Lehr.

Resources

• Part of Me: Learn Who You Really Are, What’s Driving You, and How to Get Out of Your Own Way, a book by Paul Wyman (Inner Team Dialog, 2024)
• Farm Business Management’s National Farm Leadership program
• Leadershift’s Insight program (eligible for cost-share funding in several provinces)

The post Adding emotional intelligence to your farm toolbox appeared first on Country Guide.

At the age of 11 she transitioned from city girl to farm girl when her dad became a fruit and vegetable producer to supply his specialty grocery stores. Today, she is the co-owner and general manager of Luckett Vineyards in Wallbrook, N.S. Despite taking a hands-on approach to learn the business by working in all facets of the operation, from harvesting grapes to managing events and working alongside the winemaker, she still has a hard time calling herself a farmer.

With the help of her full team of expert staff, Luckett manages the 130-acre operation that includes a vineyard, winery, bistro, tasting room and private event space. The farm offers an amazing view of the Bay of Fundy, attracting guests to enjoy a taste of Luckett Vineyards while taking in the scenery.

Luckett has combined a commitment to quality and customer service to make Luckett Vineyards a producer of award-winning vintages and premier Atlantic wine and an agri-tourism destination that’s worthy of the winery’s tagline, an experience to phone home about.

As the winner of the 2024 Atlantic Outstanding Young Farmers’ award, Luckett shares with Country Guide her experiences at Canada’s Outstanding Young Farmers’ (COYF) event, her team approach to leadership, where she finds inspiration for new ideas, and the opportunities she’s seeing for grape growers and Atlantic Canada farmers.

Country Guide: How long have you been farming, and what’s changed since you started?

Geena Luckett: I’ve been involved in the winery since it opened to the public in 2011, and I would say the only thing that hasn’t changed is that everything is always changing! Our local grape-growing industry is young and we’ve experienced a lot of change in a short period of time. Not to mention how quickly technology progresses in agriculture, the speed at which our climate is changing, shifts in alcohol and health trends, the acceptance of innovation, the list goes on. We’re in a constant state of managing and leveraging the changes. It’s exciting and nerve-racking.

It’s important to point out that our changing climate is creating new opportunities for Nova Scotia grape growers. In the short period of time we’ve been growing grapes in our province (around 15 years), we’ve seen a significant impact from changing weather patterns and extreme weather events. The silver lining is that our seasons and growing days are extending, providing opportunities to grow new grape varieties, but the extreme weather conditions have been hard to manage. In the few years I’ve been farming, I’ve experienced hurricanes, a polar vortex and late May frosts to name a few.

CG: Tell us about your Outstanding Young Farmers’ experience.

Luckett: It’s been an amazing, invigorating and eye-opening experience. To have the opportunity to be surrounded by so many like-minded people who bring so much expertise, knowledge sharing and different perspectives is something you don’t get to experience every day. My fellow Outstanding Young Farmers (OYF) are the next generation of Canadian agriculture, so getting first-hand access to insights and connections like the ones I made through COYF is truly special.

While we all came together from different parts of the country, I was surprised how much we had in common, even though our farm businesses couldn’t be more different. I admit, I underestimated the value of this experience when I went into it and I am so grateful for the connections and ideas I came away with. I encourage every young farmer to participate in their regional OYF and COYF, if you get the chance.

CG: In your opinion, what makes a good leader?

Luckett: The ability to dig in, teach, prioritize, delegate, spot opportunities, listen with an open mind and have the confidence to challenge the status quo.

I like a horizontal approach to leadership. That’s why I surround myself with people on my team who are experts in their field, and I rely on their knowledge and expertise. We foster a very hands-on approach with all our staff and encourage everyone to help and learn from each other when they can. I try to leverage and utilize the skills of leaders around me and encourage everyone to work to achieve a collective goal.

CG: How do you think your approach to farming is different from previous generations?

Luckett: Like many other farmers, my connection to farming did come from my dad, but I didn’t always live on a farm. I also didn’t go to school for agriculture, so sometimes I do feel like an imposter in this industry, but I truly embrace the “learn as I go” mentality.

I’ve noticed a little more balance in the leadership and management style with millennial farmers compared to previous generations. It feels like it’s more common now that farmers are really engaging in initiatives and efforts related to things like mental health and wellness, work-life balance and community connection. Also, because of social media, we have a greater access to each other as farmers and business owners—which can be a blessing and curse — and that creates more opportunities for idea-sharing, problem-solving, networking, partnerships and collaborations.

CG: What does farming look like today compared to when you started out?

Luckett: I’m working through my imposter syndrome!

Farming today means that I need to stay on top of trends, especially since much of our business caters to what our customers are looking for and following in terms of food and drink trends. That means I’m spending time researching what’s going on in other, more mature wine-growing areas and watching things like marketing and wine label designs, new packing ideas and styles of wine. An obvious development since I started farming is the low- to no-alcohol trend, and that’s something we’re watching closely.

Part of my research, including looking for new ideas for grape growing, winemaking and hospitality experiences, means that I travel. My husband and I love to explore other wine regions of the world that feature agri-tourism experiences like ours for insights and ideas. I get to talk to fellow farmers and business owners from around the world about their challenges and opportunities and bring new ideas home. Getting off the farm to travel and learn from others isn’t a new idea, but it may not be one that many farmers from previous generations made time for.

CG: Where do you see the agricultural industry going in the future?

Luckett: I think we will see the median age of farmers decrease as new generations become so much more connected and informed about where their food and food products come from and how they are made. And while food security and climate change continue to threaten agriculture, they are also highlighting opportunities for new technologies, artificial intelligence, sustainability and social responsibility that are all growing priorities for people joining the workforce.

The post An experience to phone home about appeared first on Country Guide.

Keltie MacNeill is the director of sustainability and community engagement at Benjamin Bridge Winery and the niece of the founders, lawyers Gerry McConnell and the late Dara Gordon. She explains that Gerry and Dara set out to learn what kind of wine the land’s unique combination of soil, weather, sun and heat units could produce.

The partners in life and business researched and hired wine experts from Ontario and France and determined that their terroir (i.e., the environmental factors that affect a crop’s growth and development, and the specific characteristics that results from those factors) could produce excellent crisp sparkling white wines using traditional, Champagne-style methods.

But getting the winery up and running was a long-term proposition. From planting the vines, to harvesting the first grapes, making and then aging the wine, it took ten years to produce the first vintage. In the meantime, MacNeill says they released a low-alcohol summer wine called Nova 7 in 2008 “just for fun.” That wine turned out to be a big hit and has been the number one best-selling wine in Nova Scotia for a decade. Available across Canada, this wine is now a huge part of the winery’s portfolio and provides stability while they develop other wines.

In addition to producing award-winning wines, MacNeill says Gerry and Dara made it their mission to create a winery that would be sustainable and a positive addition to the community and landscape.

They wanted to become a “community-based winery.”

When the founders’ twin daughters, Ashley and Devon McConnell-Gordon, took over in 2010, the winery wasn’t open to the public, explains MacNeill, who joined her cousins in the business shortly after they took over. Since then, the twins have been “slowly and intentionally” building on the original vision. For example, they’ve expanded the winery’s programming from a small private tasting room to hosting many public events for all ages throughout the year.

Today the focus is on “creating a warm, welcoming environment in the Nova Scotia way,” says MacNeill. “It’s not about status. It’s about agriculture, it’s about community… the wines are world-class but not un-approachable.”

People first

The 170-acre winery has grown from a very small winery to one that employs 50 full-time staff and 50 seasonal workers. MacNeill says everything is done in-house from growing grapes and making the wines, to bottling and distribution. Sixty-five per cent of their ingredients are sourced from within an hour’s drive and MacNeill says they are always looking for ways to increase that percentage.

Although Ashley and Devon are in charge, MacNeill says the winery is run more like a collective with higher-level decisions made collaboratively by the eight or nine senior managers who each operate a department. “The small team at the top is in the loop about everything going on at the winery,” she says.

“They work on consensus-based decision-making with a lot of discussion,” says MacNeill, noting that women make up 85 per cent of the leadership team (as well as across the business), which is unusual in both agriculture and wine. “We will have very long meetings discussing topics until no one has any concerns,” she says, acknowledging that it’s not a management style for those who just want to jump in and get things done. However, she finds there is more buy-in, more autonomy and more accountability with this system.

Benjamin Bridge’s “people-first” ethos has been front and centre since the very beginning, says MacNeill. For example, to maintain life balance they’ve adopted a four-day workweek. They also supply a comfortable place for mothers to breastfeed.

MacNeill describes the winery’s organization as a “level hierarchy” where the gap between the highest and lowest paid workers is very slim. “Everyone has their roles defined but everyone moves where help is needed including the twin sisters who work in the business day-to-day, shoulder-to-shoulder with everyone else.” Their “open-book management” style hinges on a commitment to transparency, another value they’ve followed since the winery’s inception, she says.

Recently, Benjamin Bridge achieved its B Corp Certification, a designation that indicates a business is meeting high standards of verified performance, accountability and transparency on factors from sustainability to employee benefits, community support, supply chain practices and input materials.

MacNeill says they chose this particular certification because “it really spoke to them” as a way of expressing their values to their customers, the community and their team members in a holistic way. When she looked into what was required to meet B Corp Certification, she realized many of the requirements had already been met but were not yet enshrined in the winery’s policies.

She says they also take pride in the economic prosperity they have created in the Gaspereau Valley, a small valley within the Annapolis Valley. “Those are 50 jobs that weren’t there before,” she says. And in a region with historically low incomes, this rural economic development also draws tourists to the region.

Community building

MacNeill says that for the past decade, the winery has focused on social values which include collaborating with community groups and progressing on diversity, equity and inclusion (DEI) initiatives. She admits it can be difficult and overwhelming for a small business to find its way with DEI but they have learned you get there by having conversations and building relationships with the community. “It can be intimidating but the most important thing is to start and to start small, building slowly and intentionally with community resources. You’re going to make mistakes but it’s that active learning piece that’s important.”

As part of active reconciliation, the winery, has established a relationship with the nearby Glooscap First Nation. This collaboration resulted in a very successful Beyond Terroir event which was held for five years. And, through many thoughtful conversations, a popular wine has also been developed. The winery covers the cost of production while the shared profits support meaningful initiatives in the community. “We feel like we’re including Indigenous voices even though we’re not Indigenous ourselves,” says MacNeill.

Benjamin Bridge has also reached out to other community organizations, such as the Valley African Nova Scotia Development Association, through which senior management participated in anti-racism training workshops.

Building resilience to climate change

Incidences of hail, early and late frosts, droughts, cold snaps, and now forest fires have increased and are here to stay, says MacNeill. To survive the increasingly erratic weather, the winery is making changes to what they produce and how they produce it.

“Climate chaos is not for the weak,” she says. “Crops have to be more resilient and we have to be prepared to pivot.” Sourcing grapes from local growers spreads the risk as not all geographic locations will experience the same damaging weather. Changes to their production methods, such as non-vintage wines made by blending wines from multiple years instead of from a single year’s harvest, also “provides a little insurance,” MacNeill says.

“We need to be prepared for anything, to be agile and flexible,” says MacNeill, adding that they stay up to date on the latest science by participating in studies at the local university. They also ensure their voices as farmers are heard by participating on climate change panels.

Working together

Twenty wineries and about 60 grape growers comprise Nova Scotia’s small wine industry. MacNeill says working together by sharing equipment and developing growing techniques for the unique terroir of their region is essential to the success of the fledgling industry.

Annapolis Valley conditions produce great wines with naturally high acidity (Nova Scotia’s unique flavour profiles are recognized by the appellation “Tidal Bay”), but MacNeill says their growing conditions are much wetter than the dry soils of the Middle East where wine grapes originated. Techniques used to combat excess moisture include tile-draining the land, trellising systems that maximize ventilation and solar exposure, and spraying to control moulds and mildews. Development of hybrid grapes unique to Nova Scotia with better winter hardiness, such as l’Acadie Blanc, have also contributed to the industry’s success.

Producing the signature wines with the delicate flavours and natural acidity that the region is known for requires late-season harvest, in October or even into early November. “This is what put us on the map. That’s what you taste that can’t be replicated elsewhere,” says MacNeill. It also means gambling that the weather will hold until harvest is complete.

Looking toward the future

Benjamin Bridge is a trailblazer of non-alcoholic wines and an increased demand for non-alcoholic beverages means there is a good business case for producing zero-alcohol and low-alcohol wines. This also fits into their mission to be more inclusive. “It’s the fastest-growing sector of the market and a lot of fun,” says MacNeill.

Offering year-round events and drop-in wine service on the open-air terrace also capitalizes on the growing demand for agri-tourism, says MacNeill. “We have wonderful experiences that we offer on the farm for connecting to nature and to the farm.”

MacNeill says they will keep looking for the small wins and for ways to innovate. “Innovation is in our blood. It’s about continuous change. It’s about the long game.”

The post People-first winery plays the long game appeared first on Country Guide.

Stephanie Plaster, a farm management outreach specialist with the University of Wisconsin – Madison Division of Extension, talks with lots of farmers who want to diversify their farms with a value-added enterprise.

She uses several tools and exercises to help them plan what they want to do and how to do it. Here is her advice on how to get started on a successful side business.

• READ MORE: Side hustles for farmers

1. Visioning

What are your values, vision and mission? This can be done as an individual or at the farm and family level. “It can be helpful to make sure everyone is aligned with what they actually want for themselves, their business, farm, family and their future,” says Plaster. “That then helps them figure out what is going to help them achieve those things.”

2. Identify strengths and weaknesses

Again, do this for the individual and the business. “I always encourage people to ask other people to provide feedback, because other people — whether it’s business partners, family members, employees or friends — might be able to tell them what they excel at, or if they see their farm being a leader in something that maybe they didn’t recognize themselves,” says Plaster.

3. Look for opportunities

What opportunities are out there and what are the possible impacts (positive and negative) on the farm if you pursue them? Plaster says, “It all starts with figuring out what you are good at, what you are passionate about, what opportunities are around you, and then being able to identify and pull all those things together into something that you are going to enjoy doing, and that is not going to place an additional burden on either you or your resources. Ideally you want to focus on something that is an opportunity that you just need to take advantage of.”

4. The business model canvas

The business model canvas (BMC) is a tool used to move new venture ideas to an action plan. Plaster has adapted the open-source BMC (developed originally by Alexander Osterwalder and Yves Pigneur, Strategyzer.com) specifically for agriculture (farms.extension.wisc.edu/articles/using-the-business-model-canvas-to-refine-your-farm-business-idea/). “The BMC has components that are easy to understand. It’s essentially a one-page business plan which becomes your elevator pitch. What’s important is answering those key questions so whether you are talking to your business partners, people you want to do business with, customers or lenders, you can clearly and succinctly communicate your business idea and be able to tell your story,” Plaster says.

5. The value proposition

Central to the BMC is your value proposition. What problem will your product or service solve or what need will it meet? What is unique or different about it and why would a customer choose to purchase it over something similar?

6. Key partners, activities and resources

The left side of the BMC has questions to help you identify key activities and resources — including people and skills — needed to deliver the value proposition.

7. Marketing

The right side of the BMC has questions to help you identify who your customers will be, what marketing channels you will use and how you will communicate and connect with your customers. These questions are often the most challenging to answer, especially for farmers who are in commodity agriculture, where markets and prices are generally well defined. Both of those things are much more fluid in an entrepreneurial-style value-added business. “I find the hardest thing for people is talking about their customers and market channels,” says Plaster. “These questions are focused on what do you know about your customers and how do you want to interact with them? What opportunities exist to sell the product? What market channels are going to be best for your specific situation?”

8. Identify your customer

Think deeply about who your customers will be and try to define them in as much detail as possible. Ask yourself questions such as: What do you think is the most common age range of your typical customer? Will they be men or women, families or individuals? What are their motivations to buy your product? Are they looking for a healthy lifestyle choice, family fun, a local connection or do they have some food challenges, for example, gluten sensitivity? “If you can be very specific and understand the motivations of your customers, you can better market to them, and create a product that customers are willing to buy, at a price that they are willing to pay,” suggests Plaster.

9. Setting prices

Know your exact cost of production for the product or service you want to offer. Do some market research into the prices of similar products from competitors. If your product doesn’t exist, compare it to other products that someone would buy instead of your product. Will you have different pricing levels for different markets, e.g., direct to consumer, discounts for grocery stores, distributors? Will you offer further quantity discounts? Consider your markets when setting prices. “Pricing can be a really big issue if you are creating your own food product, or if you are opening a farm store and serving your local community,” says Plaster. “For example, if you are selling beef directly off the farm, you can offer premium prices, but if you are selling to friends and neighbours with budget constraints it can be hard to ask the going market price. It can be a big stumbling point to balance the cost with the relationship you have with your local community.”

10. Marketing channel fit

The default market channel for many farmers launching a new product is the local farmers market, but does it fit your personality and resources? Do you like talking to the public? Do you enjoy bartering? Do you enjoy telling people about your business? Are you available when the farmers market is open? Do you have employees to work at the market? “If that’s not for you, that’s okay, there are other options,” says Plaster. “For example, grocery stores, corner stores or gas stations can be good places to get your product into, and for some people being able to connect with one gas station manager will be more attainable than having 50 or 60 people coming to them within a one-hour period.”

11. Learning new skills

Generally, nobody has all the skills they need to run a successful business, especially when it’s a departure from the kind of business they are used to running, such as a farm. The BMC helps identify what skills you may need to learn (or bring in), but how will you learn them? Start by finding someone local to speak to. Potential sources for contacts include economic or business development offices, such as community futures organizations, chambers of commerce, government extension specialists or universities. The internet can be a good place to look for low-cost or free courses and support programs, but often the challenge is finding them, so be prepared to do some research.

12. Communicate, connect and network

Talking to people is always your best resource, whether that’s to gain information about pricing and what people would pay for your product, or to identify potential customers and market segments. “A lot of these questions can be answered by just talking to potential customers, business partners or stakeholders,” Plaster says. “If you have some trusted people that you work with, have a conversation and ask them to refer you to resources or another person that might be able to help you. Networking connections can get you so much further than just going it alone.”

13. Attend conferences and tradeshows

This is another great way to connect with people in the industry and build a network that can be useful to your business. Plaster advises, “When you go to a conference, have a goal to connect with three to five people that you will follow up with after. If you can make that your goal, it’s more manageable and achievable.”

The post 13 steps to a side hustle on the farm appeared first on Country Guide.

So, if grain farming is back to squeaking out a profit for the foreseeable future, what can we do about it?

1. Confront the facts, but don’t lose faith

In his book, Good to Great, Jim Collins shares a quote from Vietnam prisoner-of-war Admiral Jim Stockdale who was tortured over 20 times during an eight-year imprisonment.

Stockdale said, “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

What are the brutal facts of your current reality? How is your cash-flow situation? What loan payments are coming due? What’s your net worth or equity level? How realistic are your internal valuations for inventory, machinery or land? How good is the relationship with your lender?

2. Up-to-date reporting

If you can’t answer the questions above, you likely have a financial reporting issue. The days of doing an entire year of bookkeeping annually in the winter months is increasingly problematic.

This is especially true for operations with significant debt. Banks, advisors and the dollars invested every spring require more up-to-date information. Once the financial reporting issue is solved, better budgeting is possible. Remember, though, that all bookkeepers are not created equal. Find a good bookkeeper or become one.

3. Zero-base budgeting

As farms grow larger, winters get shorter and next year’s planning begins earlier. The annual budget should be set once crop rotation, crop inputs and acres have been finalized.

Instead of taking last year’s budget and using that as your starting point, zero-base budgeting starts with a blank page and validates every line item on your budget based on your goals and priorities. Everything is fair game including acres, machinery, labour, inputs and consultants.

Crop mixes, machinery purchases and evaluating land options are examples where zero-base budgeting “decision packages” can be developed.

Decision packages should include costs and benefits, budgets, alternative options that were considered and recommended decisions.

Zero-base budgeting also allows more members of your farm and advisory team to become involved with the annual budgeting process.

4. Off-farm employment

As the old saying goes, behind every successful farmer or rancher is a spouse who works in town. Off-farm employment was normal in the rural Saskatchewan I grew up in and I don’t think that’s ever changed. Farming is usually a low-margin business and I’ve witnessed impressive farm growth achieved with off-farm employment.

If you’re finishing high school, some of the best advice is still to go to college or university or get a trade. Additional education and skills can always be brought back to the farm.

5. Think outside the box

Confirmation bias, or seeking out information that confirms our existing beliefs, is a common problem. This bias underlies the “we’ve always done it this way” mentality. I’m a big fan of peer groups and Texas A&M’s TEPAP program which emphasizes continuous improvement. Challenge your assumptions and beliefs. In commodity agriculture, the competition includes our neighbours and producers from around the globe. The competition is brainstorming how to become more efficient and a lower-cost producer — and so should you.

The post 2022-Level Farm Profits are Over. What’s Next? appeared first on Country Guide.

Almost three years later, that focus on quality sheep production has netted twenty-five mature Dorset ewes and two Canadian Arcott rams.

And although the Borsas are new to sheep production on the Prairies, they are not alone.

Gordon Schroeder, executive director of the Saskatchewan Sheep Development Board, says that the sheep industry is growing provincially and nationally.

While the board doesn’t collect official demographic statistics from their producers, judging by those participating in shows and taking part in workshops, Schroeder puts the average age of sheep producers between 30 and 40 years old. This is far from the national average age of 56 in 2021, and 55.8 for Saskatchewan alone.

The development board is seeing a lot of young people get into sheep because of lower entry costs.

Much lower capital costs than other sectors is one reason Carla and Tyrone Borsa chose sheep. Sheep also require less land compared to other livestock and government entry grants were available to help the family get started.

“The biggest expense is normally the breeding animals,” says Schroeder. “Sheep don’t need a lot of facilities and they’re not hard on facilities, so you can accommodate sheep in just about anything you have.”

Growing up on a cattle farm, Carla knew she wanted to raise her two young children with farm animals but needed a livestock operation that would be conducive to their children’s safety and active participation. When the Borsas decided to give sheep a go, the little red barn, a remnant of the long-ago cattle operation, was easily converted into a sheep barn. Well-insulated with suitable pens and alleyways, it is the perfect maternity ward for lambing during the coldest months of the year.

The first bundle of lambs arrived in chilly November, a challenging time of year for first-time lambers. “Minus 20 was the coolest. You might think that’s pretty cool, but lambs are up and at it right away,” says Carla. Tyrone adds that the key is just keeping them out of the elements.

The second round of lambing went much smoother. “It was a lot better in the sense that everything was lambed much closer together, and we had a much more uniform group of lambs,” says Tyrone.

Rams brought to the farm this past August ensure that the 40 summer-pastured ewes will begin the winter lambing season in January. This means that animals are ready for sale in April or May just in time for Easter and ethnic markets. The Borsas have high hopes for twins, triplets, even quadruplets to make the most out of their commercial market efforts.

And there are plenty of market options for Saskatchewan growers across Canada through the Saskatchewan Sheep Development Board, farm gate and direct sales, and out-of-province markets. Schroeder says they ship a load every two weeks, averaging 15,000 to 20,000 lambs per year. “If someone calls and tells us they want 50 lambs in mid-September, we’ll record that and fill the order as it comes,” he says.

The development board and producers ship animals east and west. Schroeder says that producers just have to do their research on what market option works best for their farm.

“Sometimes auction marts are a little bit more risk,” he says. “You don’t know what the prices are, but there can also be very good gains on it. There are buyers that have a set price before those animals leave the farm.”

Schroeder says that as the sheep community continues to grow, more producers mean even better access to markets for everyone. “They need volume, and many producers don’t have volume on their own. That’s why the board got into market facilitation in the first place,” he says.

• RELATED: TMRs offer benefits to sheep producers

Courtney MacDougall, president of the Saskatchewan Sheep Breeders Association, says, “We’re finding a lot of on-farm auctions going so that’s pretty inspiring as well. I think when you look across the provinces, that’s not always the case. As an association, we really pride ourselves on being able to provide more avenues for our industry and the producers to advertise and sell.”

Several production models

There are three different production models in Saskatchewan, all with various degrees of resource and labour needs.

The Borsas use the semi-confinement model, which is the most popular among provincial producers.

While their model requires more labour and housing since lambing takes place during the coldest winter months, Carla says it works well for them. “Dorset sheep have great mothering instincts, and they can also be bred out of season,” she says. Out of 30 ewes, they only had to intervene to help a ewe four or five times. On one occasion, only Carla and her two young children, Grace and Ella, were home (Tyrone was at his day job in Saskatoon), but the three of them got the job done. “If that had been one of our cows, I would have been phoning for backup,” Carla says.

Other production models have ewes lambing on pasture between May and June, but that requires more pasture land. Larger operations use the synchronized accelerated model where lambing occurs three times in two years, requiring more labour but less land. The range grass lambing model means animals give birth on the range during the summer months, which requires less labour but more land.

When I visited their farm on a blustery June day, Carla and Tyrone pointed out their two pastures, including one newly fenced area surrounding a copse of trees that had never been grazed. Carla says the sheep love it.

“They’re eating all the brush that’s never been grazed. It allows us to have two separate pastures for different breeding groups, because these ewe lambs will be bred to our new ram lambs.”

Not without its challenges

One major challenge for would-be sheep farmers is that financing is currently hard to come by, says Schroeder, because lenders are hesitant to offer money when they’re not familiar with niche markets, like sheep.

Farmers also need a significant number of animals to make a profit, which is why smaller operations often need an off-farm job to cover costs. However, Schroeder sees this in all livestock industries across the agriculture industry and says that to make any size of operation work every farmer needs a proper business plan and to set goals.

“There’s no money in any kind of farm enterprise if you don’t have enough volume to justify your costs, unless you have a different goal,” says Schroeder.

Predation is also an issue because lambs are easy targets for coyotes and wolves.

Tyrone says they’ve solved this issue by fencing around their pastures with very little clearance between the ground and the fence, keeping sheep in and unwelcome animals out. They also have a guardian llama and another on the way. While dogs can be a wonderful addition to the herd, they say that because there are dogs on surrounding farms and their farm is situated on a major highway, a llama in the sheep pen works better for them.

And it really comes down to learning what’s best for them, their sheep and their operation.

Learning fuels farm and sector growth

Learning was, and continues to be, key to the Borsas’ success. The sheep production network in Saskatchewan, including the development board and a group of sheep-raising friends, helped make their entry easier, so Carla and Tyrone are always ready and willing to answer any questions if they can help someone else.

“Our biggest goal was to really make sure we had a good understanding about the production model that we were going to use, and how we were going to do that going forward and make sure we were doing it properly,” says Carla. “There’s lots of things to learn and you want to have it down to a T.”

Carla can’t say enough good things about the development board’s workshops and training opportunities, especially the basic 101 course, Getting Into Sheep, which helped them find their footing in the industry. She says she can’t imagine having the same amount of success without a strong provincial sheep industry behind them.

“We had a good start, our feet under us, and then we just tried to grow it from there. We attend as many industry events as we can just to learn and develop those contacts,” says Carla.

MacDougall also raves about the board’s “top notch” workshops that have helped farmers across the province get into sheep. It takes a lot of sacrifice to raise any animals from birth to market, whether that’s for meat or their genetics, and many sheep-raising lessons are best learned hands-on.

MacDougall says that amazing mentors and organizations are a great asset to the industry, as are the two shows and sales that feature the province’s sheep genetics, Grasslands and the Canadian Western Agribition in Regina.

And since the Borsas’ Rosthern farm is only an hour from Saskatoon, quick trips to the city for supplies usually include a stop at the board office where they can sit down with Schroeder, whose door is always open.

“He can pretty well answer any question on the spot. Any questions that we have, it’s always a quick response,” says Tyrone.

After two years of learning the ropes, the Borsas are more than likely going to hit their three-year goal of a 50-breeding-ewe herd for next year. But they still want to make sure they’re doing it right and they know that having a strong network of peers and resources will continue to be important to their business growth.

Schroeder highlights that the last Grasslands Sheep Exhibition in July 2024 featured 37 junior sheep producers from five provinces showing homegrown sheep, and that sheep production is currently number five out of 48 4-H programs in the province. Entries increased at the regional show in Saskatoon prior to Grasslands this past year as well.

“We’re going to see that translate into future sheep producers,” says Schroeder. “Not all of them, but there’s definitely going to be a chunk of those that are going to continue on in the industry.”

The post Balancing the ups and downs of raising sheep appeared first on Country Guide.

“We always need something to aim for, and whether the goal is attainable or not, giving ourselves a direction to point at helps keep everyone focused and aligned,” says Bergman.

Bergman and Wassenaar own and operate Haybury Farms Inc. and Claybank Organics where they grow conventional and organic crops in Jarvis, Ont., and in the Algoma district of northern Ontario. The two entrepreneurs also operate Winfield Contracting, a commercial snow removal business that serves Haldimand County, and a construction business, County Line Construction.

Managing diverse businesses across varying seasons, geographic locations and growing climates means Bergman and Wassenaar depend on their staff of 19 full-time employees, open communication and strategic planning to achieve success.

“Our business relies on a handful of people to manage everything, so we need them (and ourselves) to show up at their best both physically and mentally,” explains Bergman. Bergman says individual goals can be health- or family-related while business goals are divided into the relevant enterprises, but they are all intertwined.

Business partners since 2015, Bergman and Wassenaar have grown their farm operation to 4,500 acres between the two Ontario locations. The expansion to northern Ontario in 2021 came from their goal to invest in land that made the most financial sense. After significant research and an unsuccessful attempt to partner with a larger group to expand north, the two invested in 1,500 acres in the Algoma district where they felt their dollars would stretch the most. “It was a giant leap of faith, but we believe northern Ontario is where the land market is heading,” says Wassenaar.

Managing more land in two distinctly different farm locations requires more equipment. To maximize horsepower, the partners float their tractors back and forth between locations, driving more than six hours each way, and keep tillage, planting and harvest equipment at each farm.

Bergman says he’s blessed to have such a good business partner in Wassenaar, noting that neither of them would be able to own and manage their businesses independently. Both believe that surrounding themselves with good people is key to their success. They rely most on their accountant for guidance, and seek professional and informal advice from agronomists, industry specialists and peer networks. “Farming has changed so much, that we’ve found the most value in talking to people of similar age, experience and situations,” says Bergman.

Success for the long term

Bergman explains that all their businesses are dependent on the weather, so they break their business planning and goals into seasonal three-month periods. Monthly meetings between Bergman, Wassenaar and their management team keep everyone on track and feed the agendas for weekly staff meetings.

Wassenaar says that their goals have changed as the scope of their business has grown. And as they’ve grown their ability to take on more risk has expanded too. This year, the team set out to achieve their biggest goals yet: to increase the profitability of their northern Ontario acres so the farm can be a self-sustaining operation and complete a three-year shop building project. Wassenaar says that the shop build fits into their long-term expansion strategy because its new size will accommodate future business growth. “Long-term planning is constantly on our minds and part of our annual written goals,” he explains.

For Bergman and Wassenaar, planning long term means looking five to 10 years ahead. Within the next decade they would like to expand their equipment lineup to match their land base, accumulate more acres and transition into more management less hands-on roles. They both have young families, and like many farmers, struggle with balancing their workload and time with family. Bergman says it’s hard to learn to let go of the day-to-day so one of his goals is to enhance middle management roles within their companies to take some pressure off him and Wassenaar.

The challenge is how to measure success when so many of their production and financial goals are tied to variables they can’t control, such as weather, input costs and commodity markets. But Wassenaar believes if their business and personal lives are better off than the year before, they are making progress. And if they don’t achieve their goals, they try again.

“Sometimes I like it when we don’t meet our goals because it gives us a reason to look at things critically and fuels our motivation,” says Bergman. “Success looks different for everyone, and for us, our goals are focused on growth, efficiencies and progressive management.”

Legacy underlies decisions

Father and son team David and Brett Francis are expanding their mixed farming operation of seed potatoes, field crops and beef to enhance the farm’s sustainability for the next generation. They trust their instincts and make one decision at a time.

Decisions made on Francis Farms in Lady Fane, P.E.I., are rooted in generational knowledge passed down through the family since it was founded in 1844. And decisions must result in a farm profitable enough to support the family, nimble enough to adjust to market conditions and provide a balance between work and lifestyle.

“If the decision feels good and you’re truthful with yourself about the situation, then it’s likely the right choice to make,” says David. He says that it’s also important to weigh external factors into every decision, but that with so many uncontrollable dynamics in agriculture, it’s best not to get too caught up in negative “what ifs.”

David admits the family never follows a formal goal-setting process. They take the same, practical approach that has served the family for generations: they look internally to assess their strengths, assets, equipment and what they enjoy doing.

Since Brett returned to the farm after graduating from Dalhousie University in 2008, the family has set and achieved several goals, each designed to reduce the farm’s exposure to risk.

Francis Farms has grown seed potatoes for generations and has developed a reputation for high-quality products. Their cost of production is higher, given the specialized equipment, stringent regulations and inspections, and the labour required to sort and ship seed potatoes each spring.

“We’re proud to provide seed for potatoes grown across the province,” says David. “It’s a unique opportunity, and our goal is to continue to serve this niche market.”

Traditionally, the family sold the potatoes on the open market, but five years ago they decided to mitigate their risk by contracting their potato production. Today, 80 per cent of production is contracted to processing growers in P.E.I. Not only did they reduce their marketing risk, but they were able to refocus their resources on expanding their land base and crop and livestock marketing.

Like many farms, the Francis family relies on rented land. They work hard to maintain great relationships with their landlords and recognize the importance of a reliable land base for the sustainability of their farm. “The sustainability, profitability and the ability for the next generation to take over the farm factors into every decision we make,” says David.

The family is also diversifying to further improve sustainability and risk management goals. They’ve added a feedlot to finish their cattle, and they’ve purchased feeder cattle to expand the herd. Three factors influenced this decision: the proximity to Atlantic Beef Products, a federal beef processing facility just eight miles down the road; the ability to utilize their own feed sources and market their crops through the finished beef rather than selling their barley and straw through previous channels; and a new year-round employment opportunity to maintain a reliable labour source. Since they already know how to manage beef cattle and had most of the equipment to expand, the decision made sense.

Future vision

Despite an informal approach to planning, decisions are not made lightly on Francis Farms. David and Brett work closely with their spouses, Vicki, a retired social worker, and Keshia, a school social worker. Both are involved in the farm management and contribute to its success. The family also relies on trusted advisors, especially their tax specialist and accountant who visit the farm regularly, and they acknowledge the hard work of their full-time and seasonal employees. And while not always planned, the impromptu business meetings in the shop or around the kitchen table are where open and honest communications help shape the strategic direction of the farm’s future.

David and Brett’s vision is to maintain the legacy of a productive, efficient, profitable and enjoyable place to live and work. “Farming is a responsibility, and I want to create an environment that supports and feeds our family and community, while leaving what we’ve built for the next generation,” says David.

Strategic intents

Stacey Meunier is certain there’s no way she and her husband Chad would be where they are today if they weren’t intentional about following their farm values. “Our values and vision statement guide our day-to-day decisions and our overall goals,” explains Stacey.

Chad and Stacey own Meunier Livestock Ltd. in Barrhead, Alta., where they raise 4,500 cows, manage a finishing feedlot and crop forages to feed their cattle. Ranching with the help of 16 full-time staff and raising four children keeps the couple busy, especially since the farm has grown substantially since they took ownership of the family operation in 2016.

They set their vision for the farm on day one and “Everything we do must align with our vision: thriving plants, animals and people,” Meunier says.

Meunier refers to their goals as intents and says they have typically identified four to five overarching intents in each of their strategic plans. “Our approach to setting our goals, or intents, creates a framework that enables us to make detailed plans that inform our decisions,” she explains.

Each set of intents — they’re on their third iteration — is incorporated into the farm’s business plan. Measurements are established for each goal, but as Meunier points out, because agriculture is constantly changing, they are prepared to adjust or change their intents to meet each new situation. Some measurements are tied to numbers, like their 2021 goal to increase crop yields, while others, such as learning to farm by their values, are harder to quantify.

Their approach helps them define short- and long-term goals, though Meunier points out that on a farm, a short-term goal can take a few years, while a long-term goal could be 10 or even 100 years when factoring in farm sustainability and succession.

Looking back, Meunier says their initial set of intents was very task oriented, and their most important goal was developing a comprehensive succession plan. Their second round of intents was focused on increasing revenue and decreasing operational costs. At the time, they also challenged themselves to farm by their own values and align everything they did with their five core values: honesty and integrity, strong work ethic and efficiency, being intentional, community and continued learning.

“Intentionally farming by our values was one of the most challenging, yet impactful goals that we set for ourselves,” reflects Meunier. “If we hadn’t written the goal and acted deliberately, we may not have achieved it.”

Their third, and most recent set of intents proved to be the most difficult. In December 2023, Stacey and Chad found themselves at a crossroads about the direction for their business. They had recently expanded and were facing a tough cattle market, so they reached out to a trusted advisor for help. “By consulting a third-party advisor, we were able to gain input, decide on and clarify what will serve our farm,” she says.

Their latest set of intents is quite broad compared to previous versions, but this shift reflects the complexity of their business and changes made in recent years. For example, two of their intents are to develop and expand key relationships and improve management and operational infrastructure. Intents might be general, but Meunier says they’ve identified key action items and assigned timelines that will help them achieve their goals.

Shared goals

“It’s easy to set goals, but if you don’t see them every day, or position them in front of you, I question the ability to get them done in a timely manner,” says Meunier. That’s why their current list of strategic intents is posted on the office wall. She says this keeps them focused on their end goals and provides a visual for staff to see what everyone is working towards.

The farm’s vision statement is also posted on their office wall and company vehicles so everyone in the community can see what they stand for.

Stacey and Chad use bi-weekly staff meetings to share how each intent fits into the overall picture of the farm’s success and update staff on tasks associated with each intent. “It’s important that everyone understands how our goals impact everyone individually and as a whole,” says Meunier. The couple also make a point of sharing accomplishments at monthly staff lunch-and-learns so everyone can celebrate their contributions.

“If we don’t achieve our intent after two years, we analyze the situation. Sometimes we shelve the idea and come back when the time is right,” says Meunier.

Meunier’s advice to farmers: make time to get away from the farm to plan. “Space and distance help with clarity and finding a new perspective,” she says. She also recommends openly communicating goals with family and staff, so everyone buys into the idea and overall direction.

“Setting strategic intents is the key to our success,” she says.

The post How these Canadian farms thrive appeared first on Country Guide.

Potential buyers must meet the owner’s criteria, often including that they must be a good bet to protect their legacy, which means they may also be scarce. You must also plan for the effects of the sale on customers, employees and the community. 

Plus, of course, you want to close on a deal that provides the value your business is worth. 

How do you put a dollar amount on your life’s work? Work that has been a lifestyle, not necessarily based on rigid accounting processes, but rather on a lot of intuition, carefully nurtured relationships and on-the-ground experience. 

It’s true that the value of a business’s worth lies mostly on its balance sheet and income statements. But the narrative — that is, its operations including customers, suppliers and markets — can affect the way those numbers are translated. 

What does that mean? Let’s break it down. 

If we tease out the term — “numbers narrative” — we can say that the “numbers” component is an objective. It’s a black-and-white reflection of the business’s financial past, present and future. 

The ‘narrative’ component, by contrast, reflects its values and history. It’s the sum of the relationships with customers, suppliers, banks, etc., plus its operations, its products and its markets, all coalescing to form a powerful narrative that provides the context for the numbers. 

While every business starts with a narrative — a story about the business that unfolds over time — the numbers are an equally important piece of that story throughout the farm’s decades of growth, particularly during the valuation stage. 

When it comes to selling a business, it’s the combination of the two — number and narrative — and putting them together in one holistic term that offers the most complete perspective for a potential buyer. 

“The data can validate the narrative,” says Lisa Courtney Lloyd, vice-president of business development at Market Maker Agriculture, a company that buys privately owned, seasonal agribusinesses. “Numbers give you power to understand your business regardless of what you want to do with it.” 

Many business owners have their narrative down pat, though generally in their head. They know their values, goals and founding history; their customers, operations and products; their best-sellers. 

“But how, where do you make your money?” asks Courtney Lloyd. “If you don’t know the business’s numbers you only have half the story.” 

Whether you’re still growing the business or, like Market Maker Agriculture’s clients, you’re ready to sell, having only half the equation won’t give the answer — or the eventual value — you’re looking for. 

Where do you make your money?

Even if you’re not looking to transition ownership of your agribusiness, Courtney Lloyd says that linking numbers and narrative together is key to continuing to build a strong business. 

She suggests digging in to discover which are your business’s value streams, all of which can be analyzed in terms of both numbers and narrative. 

“For example, if all you did was look at the numbers,” Courtney Lloyd says, “you might decide to get rid of a product because it doesn’t have a strong margin or it’s losing you money. But the narrative might indicate that this product is why customers come to you in the first place. That product is your competitive advantage. So, you need both. 

“It’s like the famous business principle of ‘you can’t manage what you can’t measure.’ If you objectively measure the black and white numbers around that product, you might find it’s not making you the money you thought it was, but customers love it, and they keep coming back.” 

As part of the value stream exercise, Courtney Lloyd says you should also determine your cost of production, which includes taking a close look at inventory. 

Inventory affects your working capital and cash flow. This can be a huge risk, especially for seasonal businesses, and it can affect your valuation during the business sale process. “Many people don’t see inventory as money sitting in the yard, as part of the numbers component,” Courtney Lloyd explains.

“They see it more as part of the narrative, you know, they’re focused on having just-in-case inventory so that if a customer calls, they can respond. But if you’re sitting on a lot on inventory, it becomes an opportunity cost.” 

Courtney Lloyd explains that while it’s important to be customer-centric, it’s also important to look at the numbers and see if you can tighten things up a bit. “A pile of ‘just in case’ inventory here, there and over there might represent hundreds of thousands of dollars that you could be using to generate something more for your business, especially if that inventory has a lifespan.” 

She also suggests having a look at the numbers behind customers. Are they truly a great customer, generating demonstrable profit, or are you just bending over backwards to give them huge discounts because you’re worried about losing them? “I’m not suggesting that you get rid of these customers, but we have to go back to that old adage again of ‘when you can measure it, you can manage it’.” 

“If all you’re doing is reading numbers and someone’s not explaining the story behind the numbers, why they’ve changed, that’s not really helpful. You want to know why there’s a change and is it good or bad.” 

Risks are part numbers, part narrative too

When owners are looking to sell and get the most value for their business, the numbers, processes and systems all have to be in place. Alignment signals a less risky acquisition. 

“If you’re trying to reduce risks, your business is going to be strong whether you sell it or not,” Courtney Lloyd counsels. 

“Risks can affect your valuation. If you are getting ready to sell in three, four, five years, then people who buy businesses, like Market Maker Agriculture, will discount risks so it makes sense for an owner to just make a stronger business by reducing as much risk as possible.” 

If thinking about selling, one of the first things Courtney Lloyd suggests an owner do, if they don’t have one already, is to get a good accounting system. This can help owners highlight areas for
risk reduction. “It doesn’t have to be an expensive system,” she says, “but you do need to get some numbers down, run some reports, and use them to support the narrative direction of your business.” 

On the flip side, someone who focuses too much on the numbers and not enough on the narrative runs some risk as well. “People who have a good idea about the financials sometimes forget to take a look at the relationship side of the business when they’re getting ready to sell,” Courtney Lloyd says. 

Share the stomach acid

If the owner is also the key person with whom suppliers and customers have relationships now is the time to start sharing and transitioning those relationships, Courtney Lloyd says. “Otherwise, it will be seen as a risk if the main decision-maker, the main relationship person, is walking out the door. There’s so much information to transfer, so why not start now?” 

She likes to say that owners or main decision-makers need to “share the stomach acid.” 

“We often see as the key part of the narrative component that the main decision-maker owns the relationships,” says Courtney Lloyd. The business is their baby, so even when there are other competent people who can make those decisions or fulfil a duty or role, the owner is still calling the shots. 

“We’ll often hear owners say their employees are so great that they can run the business. Or the owner will say that they’re working a lot less as they transition into those few years before they decide to sell. But the real test is whether they’ve been on a holiday where they haven’t checked in too much,” Courtney Lloyd says. 

“The owner will say that they work a lot less but as a potential buyer, we still wonder who is making most decisions or maintaining relationships. If an owner can go on holiday and not check in, then chances are someone else in the organization is able to make decisions.”

How do you know if you’re ready to sell your agribusiness? How do you prepare for the sale of your business? What will a buyer look at? What is your business really worth? Check out Market Maker Agriculture’s Seller’s Guide for tips to lead you through each step of the process.

The post The numbers you need to know when selling an agribusiness appeared first on Country Guide.

“The details of a farm’s finances, business plans, or even tax rates may seem like suitable conversation topics among family or farm employees,” says Stu Person, national leader, crop services with MNP.

But, adds Person, “that would not likely be acceptable in any other business environment.”

So, where do you draw the line?

1. Know where you belong

“Just because a person is family doesn’t mean they have a right to know everything,” says Person, talking specifically of financial details. “My advice to clients is that a person must be part of the farm ownership and management team to be entitled access to this level of information.”

That advice makes sense for most Canadian farmers, but, in many cases, the follow-through isn’t as easy.

Karla Rahn, farm business advisor with Ottawa-based Ag Risk Managers, believes that how a farm owner or farm management team decides who is entitled to what level of access to the details of a farm’s financial info is not a one-off decision. It requires a look at a farm’s values, and establishing who has a vote and who has a voice.

The first step to determining where a person fits and how much information should be shared with them is to establish their role on the farm, especially if it is a family business. Both Person and Rahn recommend that family farms use the Three-Circle Model of the Family Business System to help everyone understand where they belong within the business.

The three-circle framework clarifies seven groups within the family business (including the circles and their overlaps), each with its own legitimate perspectives, goals and dynamics.

Recognizing where each individual presently fits can also help identify where they may want to move to in the future. For now, determining a person’s role can create boundaries and outline how much, or what level of information they are entitled to.

For example, Person says family owners should have access to more information than family employees. Of course, the level of information shared will be different from farm to farm, but there isn’t much of a downside to formalizing and documenting roles, responsibilities and even access to varying levels of management information.

2. Set boundaries

“Breakdowns happen when people don’t know expectations and what their roles and responsibilities are,” says Rahn. That’s why a part of setting boundaries includes defining and documenting each person’s role.

This not only helps a farm owner when it comes to managing who should have access to financial and business information, but also supports a collaborative and healthy working environment because people understand the expectations.

Depending on the size and structure of the farm, defining the levels of information access can be achieved through job descriptions, shareholder agreements, corporate bylaws, or partnership agreements.

Rahn notes that people can get their backs up when formality and policies start to be imposed on the farm in part because they may believe it implies a lack of trust. But that’s not the case, Rahn says. Establishing roles within the farm business is a positive step. It means the farm’s management is setting expectations and it’s building a foundation for an individual’s growth and development, and for healthy communication and accountability.

Also, Rahn says, farmers need to ask themselves what the risk is if certain people aren’t given a voice? The dynamics of personal relationships can make this challenging, but if they should have a voice, that may mean they should also have some access to some numbers.

3. Clearly communicate

Building a culture of open communications and trust is essential in every business, especially on farms with their close family and employee relationships.

Rahn says that fostering good communications is most helpful when issues occur and will enable concerns to be addressed in a healthy way.

“Transparency and openness build trust and confidence,” she says. “Open communication will also encourage accountability and help individuals excel within their defined roles, but this is all easier said than done.”

Open and clear communications also need to be extended to farm advisors, especially those who support the farm’s cash flow or financial management. Person reminds farmers of the importance of transparency and honesty when working with advisors, especially banks, lenders and accountants who can only provide advice based on the information they are provided.

“The more information a farm owner can provide, the greater understanding we have of their business so we can support our clients” says Michael Menzi, senior director with Farm Credit Canada. “Accurate financial statements are important, but so are relationships and honest conversations so we can help farmers through even the most challenging times.”

4. Understand governance

A farm’s governance may also dictate who has access to information. Person says farm owners should be sure to understand their obligations towards shareholders, management or business partners. “You’re not hiding anything by giving the right level of information to the right user,” he says.

While a farm’s governance may vary based on size or legal structure, establishing who has access to varying levels of information can be included in written agreements. Rahn suggests farmers get comfortable with formality. She believes that a farm’s business structure or governance model contributes to who has a voice and who has a vote, and this influences who has access to what information.

“Formality, or written agreements and defined roles should be part of running a farm business, and while it may appear difficult within farm families, it’s an effective approach to building healthy communication skills, respecting boundaries and taking accountability,” says Rahn.

5. Get organized

Nothing strengthens a farm’s financial organization like timely, detailed financial records. No matter who you share the information with, having a clear understanding of how the farm is performing is essential. Person reminds farmers to make financial planning and recording a priority, saying “timely and high-quality information is valuable.”

Accrual financial statements top Person’s list of recommended financial documents. He believes these are especially important for measuring a farm’s performance and risk assessment.

Menzi says accurate financial reports also tell a story, enabling farm owners and their advisors to get a full picture of how a farm operation is performing today, and help with future projections.

“Use your financial information. Listen to what it is telling you and make changes as needed,” advises Person, who is encouraged by the shift he is seeing where more farms are taking a higher degree of interest in their financial results and in planning for the future. He also believes this renewed interest is forcing accountants and farm business advisors to raise their game in how information is presented so it is more meaningful and easier to understand.

“There’s a level of vulnerability that comes with sharing information too, especially a farm’s financial or performance numbers,” says Rahn, reminding farm owners that, however uncomfortable it may be, transparency and openness lead to trust and confidence. This is especially important when working with stakeholders, such as bankers, lawyers, accountants, estate planners and family advisors.

Rahn explains further, saying “transparency brings vulnerability, openness brings change (and letting go), and together this builds trust and confidence within a relationship and for the business.” Overall, it translates to improved business results, but Rahn reminds farmers that transparency doesn’t mean sharing everything with everyone.

It may help, too, to turn to your advisors to help navigate challenging situations. “You can always include a trusted advisor to lead discussions, if necessary,” says Rahn.

“There’s an appropriate level of information for people within each farm business arrangement,” says Person, who also believes that making the distinction between each person’s role needs to be taken more seriously on farms. “Whether you are family or not, the dissemination, or sharing of financial information needs to be more formalized.” 

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