Best Tool for Beginners: Cash Flow

Courtesy of Wally S., Wally’s Urban Market Garden, Saskatoon, SK 

Many beginning farmers who enroll in our learning programs already know the standard operating equipment of a SPIN farm – a cooler, tiller and seeder. An important tool they haven’t thought about is cash flow.

Cash flow is crucial for any small business, and it’s variability is a source of a lot of stress. One of the main objectives I had in creating the SPIN-Farming system was to make cash flow more steady and consistent.

One way to do that is to get off to a strong start early in the season. Being first at market with crops gives you early cash flow, before many other farmers have even started harvesting. It also gives you a jump on establishing regular customers. Examples of some of my early season crops: carrots,radish, scallion, spinach

Your crop repertoire also has to be diverse enough to support sales through mid and late season. So you need to aim to have a wide variety of crops,,consistently, as long as your season lasts.

Another way to achieve steady cash flow is to plan for it. That’s why important factors in SPIN’s business planning process is setting a revenue target and determining the number of your marketing weeks. Divide the two to get your average weekly revenue target. That’s your cash flow, and by tracking it each week, you can gauge your progress and be able to make adjustments as you go along to keep you on target, or change your targets, if need be.

Maintaining cash flow is among the most stressful parts of any business, but farmers have a lot more control over keeping it steady than they realize. They just have to plan for it, by thinking through their production strategically, and applying SPIN-Farming’s business framework. You may not always like the numbers you see, but you won’t be left at the end of the season asking what happened.

SF photo blog $1,000 spring farm stand

Early season cash flow is what SPIN farmers plan for. This is a $1,000 market stand in early May. .

LEARN THE BUSINESS OF GROWING FOOD FROM THE BEST MINDS IN FARMING TODAY IN THE SPIN ONLINE SUPPORT GROUP. FREE TRIAL MEMBERSHIP WHEN YOU PURCHASE ANY SPIN GUIDE

 

Be Ready to Be Dynamic

Thanks to Ray Derksen,John Greenwood, Darmaris Katt, Beth Hagenbuch and Adithya Ramachanrdan for helping Wally lead last week’s meetup. and sharing their end of the year assessments in 5 areas: crops, marketing, work flow, gear and revenue.

SF photo fb Taking Stock 5 members non holiday aThe main theme was in-season revamps to farm plans are now the rule rather than the exception. SPIN farmers are constantly having to change throughout the season in response to food trends, customer tastes and competition.

What that means for 2018: 2 plans – one that is “core”, based on predictable, steady best sellers. And another that is a flex plan, based on more niche, experimental crops that can be changed out quickly throughout the season. Real-time analysis and record keeping are more important than ever. Lots of software out there to help you do that.

Flowers are a blooming trend, along with farmers having to take a more active role in building traffic to their farmer’s markets. Finding motivated labor is a key challenge, and controlling costs is the top 2018 priority. Lots more insights on the current state of the backyard farming business in the replay. Now playing 24/7 when you log in here.

How Long Can You Keep SPIN-Farming?

Courtesy of Wally S., Wally’s Urban Market Garden, Saskatoon SK

Over the 10 years I’ve been doing SPIN-Farming workshops this question comes up at just about every one. SPIN-Farming is certainly more labor intensive than riding around on a tractor all day. And I know I’m not getting any younger, so the age issue isn’t going away.

SF photo blog Wally selfie young

Eventually you get too old to do anything, and that’s true for many vocations. Based on my experience, I would say going into your 60’s you should be good, if you’re in decent health. If you’re obese, then probably not. My wife Gail is in her early 60’s and works harder than people 30 years younger. But she is starting to feel it.

This is where SPIN-Farming concepts can really be put into play. You can adjust your intensity level and crop repertoire. I don’t think anyone in their 60’s wants to do a Curtis Stone-type intense greens production regime. Instead, you can skew intensity levels to 1 and 2 type production. Or maybe even do just 1 type production, or specialize in one crop, say garlic.

Once you get into your 60’s and 70’s many have supplemental sources of income, so they are not relying on SPIN-Farming solely for their bread and butter. When you’re younger, yes, you can be full out earning 6 figures at the top of SPIN’s revenue benchmarks. As you get older, not so much.

You can cycle through SPIN’s four models of operations many times throughout your life, ramping up and dialing back your business, depending on circumstances. As you get older you might change from full-time year round to part-time year round or part-time seasonal, with non-intensive production. If you’re multi-locational, you can give up the plots furthest from home base and start downsizing. SPIN-Farming is readily adjustable to the energy you can you put into it, and totally predictable because you can quantify the rewards you’ll get back. It’s up to you to make the calculation on how, when or even if, to quit. When those outdoor plots get to be too much, there’s always the den or basement.

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Welcome to No Trace Farm

Courtesy of Roxanne C., Philadelphia PA

This is a situation SPIN farmers try to avoid. Even though the yard owner wants to champion it, and there’s no law against it, front yard farming isn’t always a good idea. Controversy feeds the media and sells newspapers, but it works against building a business. In your face farming isn’t healthy for anyone, and sometimes even when you’re right, you’re in the wrong. .

So remember when you are starting and operating an urban and suburban farm that backyards minimize conflict, fences make good neighbors, and farm diplomacy ranks up there with soil maintenance and food safety as a best practice.

Read more about farm diplomacy here. 

SF photo blog no trace farm

It is much easier to farm without distractions or discomfort, so the main objective is to have your farming activities be a non-issue.

GET MORE PRACTICAL ON-THE-GROUND ADVICE FROM THOSE WHO ARE OUT THERE MAKING MONEY FROM GARDEN-SIZE PLOTS (USUALLY IN BACKYARDS) EVERY DAY. IN THE SPIN ONLINE GROUP. FREE TRIAL MEMBERSHIP WITH THE PURCHASE OF ANY SPIN GUIDE.

 

 

How SPIN Farmers Are Building Their Own Supply Chains

Courtesy of Roxanne C., Philadelphia PA 

It took several generations to dismantle local food supply chains but SPIN farmers like Mary Ackley, owner/operator of Little Wild Things City Farm in the heart of DC, are rebuilding it pretty quickly, without Trump-size infrastructure investment or government policy changes. All she’s using is some off-the-shelf e-commerce software that keeps her business open 24/7 and offers just-in-time ordering and delivery.

The software that powers her business wasn’t even designed for a local farm business, but with a little tinkering, which farmers are great at, she integrated Shopify with Trade Gecko and a few apps to get it to do what needed to be done. She says the most-used feature is same-day delivery by Postmates courier. So not only does her business shorten the food supply chain, it improves upon the old one by producing just what chefs need, when they need it. No waste. Steady production. Highest quality product. Dependable relationship between farmer and chef. Steady cashflow.

Here’s how it works, and here’s how new farm businesses are being created a lot quicker than most would think possible, even if it is one SPIN farmer at a time.

GET MORE IDEAS ON BUILDING A SUCCESSFUL FARM BUSINESS FROM MARY AND OTHER SUCCESSFUL FARMERS LIKE HERE IN THE IN THE SPIN ONLINE SUPPORT GROUP. FREE TRIAL MEMBERSHIP COME WITH THE PURCHASE OF ANY SPIN GUIDE.

SPIN-Farming Certification Means Business

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What’s it good for? SPIN-Farming certification doesn’t leave you wondering. Once you’ve earned it, what you’ll have to show for it is a moneymaking farm business. The certification program is focused, rigorous, performance-based and produces a measurable ROI.

Completion time depends on the level you are starting from. Here are the levels:

SPIN-Farming Levels of Achievement

$ Pro 1 (Basics concepts) – Novice ($500 average gross/week)
18 Credits
Covers:                                                                                                                                     >Design
>Production techniques
>Basic, low-cost infrastructure and gear
>Harvesting & prepping practices
>Safe farming practices
Graduation requirement: present the plan that generated $500 average gross/week in revenue- crops grown, unit amounts, sales channels, pricing, number of marketing weeks

completion of this level signifies a novice farmer

$$ Pro 2 (includes 2.0 concepts) – Apprentice ($1,000 average gross/week)
21 Credits
Covers:                                                                                                                     >Equipment investments
>Land base allocation
>Extended marketing period
Graduation requirement: present the plan that generated $1,000 average gross/week in revenue – crops grown, unit amounts, sales channels, pricing, number of marketing weeks

completion of this level signifies an apprentice farmer

$$$ Pro 3 – Experienced ($2,000 average gross/week)
12 Credits
Covers:                                                                                                                                   >Work rate
>Cropping strategies
>Crop repertoire
>Extended marketing period
Graduation requirement: present the plan that generated $2,000 average gross/week in revenue – crops grown, unit amounts, sales channels, pricing, number of marketing weeks

completion of this level signifies an experienced farmer

$$$$ Pro 4 – Expert ( $2,000+ average gross per week)
12 Credits
Covers:                                                                                                                                >Maximized marketing period
>Season extension
>GAP compliance
Graduation requirement: present the plan that generated $2,000+ average gross/week in revenue – crops grown, unit amounts, sales channels, pricing, number of marketing weeks

completion of this level signifies an expert farmer

No grades. No papers. You learn by doing with online guidance from a SPIN mentor and peer-to-peer support.

Here’s how it works:
>Pick the level you are starting from
>Be assigned a SPIN mentor
>Earn SPIN credits (you might already have)!
>Achieve progressively higher levels of proficiency and revenue
>Create a moneymaking farm as you go, at a pace that suits your abilities, time and resources

Here’s graduation requirements:
>Follow our online learning program
>Pass a 25 question test
>Provide key 5 SPIN metrics for each level you complete
>Create a moneymaking SPIN farm

For more details on SPIN-Farming certification, go here.

The Entrepreneurial Advantage Makes All the Difference

Courtesy of Roxanne C., Philadelphia PA

SPIN-Farming and nonprofits are not a natural fit. Sure, SPIN’s planting plan can be used to maximize yields in a minimum amount of space. But SPIN is primarily a franchise-like business model. Those who have the most success with it use it to become self-employed business owners.

SPIN farmers are ambitious and have a lot, or sometimes everything, on the line. They are just as passionate about their work, and their methods are just as virtuous, as mission-driven growers. But at the end of the day, among their missions is to pay the bills. They have the entrepreneurial advantage.

Nonprofit growers have all their costs covered and they can count on a steady paycheck as long as the grant writers do their jobs. They aren’t vested in their own success. They are really social workers who happen to be growing food.

This differentiation is important when assessing the viability of small scale and urban farming. Skepticism is useful and criticism can be constructive, but it is frequently misplaced. The underachievement and failures of many of the new crop of small and urban farms is not because they can’t be viable. It’s because they lack the entrepreneurial advantage.

SPIN photo Kipp sign

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Plant With Your Head as Well as Your Gut

Courtesy of Wally S., Wally’s Urban Market Garden, Saskatoon SK

“Go with your gut” is sometimes good advice. But if you want to succeed in business, you also have to use your head. Over the years I have developed strategies for each of my crops. Having a cropping strategy is especially important for crops that are pretty common or low value, such as carrots, garlic, onions, potatoes, tomatoes, and even greens because you have to differentiate yourself at market from other growers, and you have to turn a low value crop into a high value one. That means having a crop available when others don’t, offering different varieties from others, or targeting different markets, like
restaurants.

For instance, carrots have always been a top money making crop for me. But a carrot is not a carrot is not a carrot. There are different sizes of carrots. There are rainbow carrots. There are novelty carrots. Each one has a different place and time throughout my marketing period.

DDG4 photo 15

Carrots are another big crop because they provide steady cash flow. This year I am growing 10 segments. I sell them steadily throughout the season starting with scallion and then progressing to onion bunches and dry onion in the fall.

Leafy greens are another important crop to think through because there are so many options – chard, collards, kale, lettuces, salad mixes, spinaches. Fresh herbs, such as basil, cilantro and parsley can also be included. And then there are micro greens, orach, purslane and other novelty crops. My greens strategy is based on having anywhere from 100 units to 500 units of some combination of greens throughout the season, especially early on before other producers have them.

Knowing why you are growing a certain crop is as important as knowing how to grow it, and having cropping strategies is what turns growing into a business.

FIND OUT WHEN, HOW AND WHICH MONEYMAKING CROPS SPIN FARMERS ARE GROWING IN THE ONLINE SUPPORT GROUP. RECEIVE FREE TRIAL MEMBERSHIP  WITH THE PURCHASE OF ANY SPIN GUIDE. 

Why Not Just Grow High Value Crops?

Courtesy of Wally S., Wally’s Urban Market Garden, Saskatoon SK

In planning discussions the question frequently comes up, “If you want to make money, why not just grow the highest value crops?”  It’s easy to go through SPIN 2.0 Crop profiles and pull them out – rainbow carrots, garlic, microgreens, onions, shallots. Specialized operations can work – for a while. But farming is never steady state. What works one year can’t be counted on to work  the next.

The wheels of commerce are greased by trends, which are inherently short-lived. Consumer tastes and the competitive landscape are changing much more rapidly than they used to. A hot trend like micros attracts a lot of new suppliers, and then the market becomes saturated. If succeeding in business were as easy as just selling what’s most expensive, we’d all be as rich as Donald Trump.

Then there are the environmental concerns. Unanticipated weed pressure or dry conditions can make the growing of some higher value crops tricky. Disease and insects are also a risk. If all your business is dependent on one or just a few crops, and you have crop failures, just ask the Big Ag farmers how that goes. Boom and bust.

I’ve always followed the “steady Eddy” strategy by experimenting with a wide variety of crops and developing an extensive crop repertoire that includes lower value crops. Green beans, peas, potatoes, and winter squash are easier to grow in heavier weed pressure conditions.

If you sell at market, it is better to have a selection of produce so that you can be a one stop shop. Your regular customers will usually buy whatever you have, so that means more sales to your regulars. Also you will be better able to lure new customers. You also stand a better chance of developing a more consistent cash flow with a more diverse offering of produce. If you want to offer a CSA, a variety of items is usually part of the deal.

Specialized operations can simplify start up or work well as part-time operations. But they also increase your risks and limit your opportunities. As I said, farming is never steady state, and you can expand or narrow your operation as you go through different life stages. Adapt and prosper!

SPIN photo microgrees and field

Man does not live by micros alone. 

THE SPIN ONLINE SUPPORT GROUP IS ALWAYS SERVING UP BACKYARD FARMING BUSINESS ADVICE. RECEIVE FREE TRIAL MEMBERSHIP  WITH THE PURCHASE OF ANY SPIN GUIDE