Off-farm income choices

Planning your entry related to off-farm work is often one of the most important and contentious questions to answer.  There are many different perspectives and opinions. 

Some people will advocate quitting the day job and throwing yourself into the farming enterprise 100%.  Limiting your options will give you a focus on the farm and provide a powerful motivation.  As dollars earned from the farm are your only source of income, purchases will be scrutinized, assets will be maximized and efficiencies will be identified.  There are few fall back positions and all the income eggs are in one basket.

A second approach is to plan a gradual entry, phasing in your farm participation.  It might be a matter of “farming on the weekends”, using the off farm job to finance life expenses and allowing all farm profits to be reinvested in the enterprise and paying down debt.  The off farm work can give you time and space to develop ideas, grow gradually, make it through risky periods (like transition), build a customer base.  For some operations this is a matter of a couple of years, for others it can take decades.  One spouse may start out on the farm and with the other working off farm.

A third option it to deliberately plan to both work off farm and farm as a commercial venture.  Satisfaction, benefits, security, money can all be motivations to try and get the “best of both worlds”.  It should be noted that this strategy requires excellent time management skills and an understanding of your goals.   Farming enterprises should be identified that fit your schedule.    

A fourth perspective could be to grow the farm by hiring staff.  When the farm grows to a size that one can hire a person full time, then it may be time for the owner to change positions.  Initially the owner focuses on being an investor and manager.   This can be an effective strategy if there is a significant gap between the off-farm and farm wages.

There is no right or wrong answer and the decision is highly personal and based on you, your family, your farm and your goals.  Each approach brings with it costs, benefits, tradeoffs and the potential for the dream to become a nightmare.  It is critical to make choices consciously and not feel “trapped”. 

The following considerations will useful in assessing your decisions about off-farm work?

• What are your personal and family financial needs?
• How much equity are you able to invest in the venture?
• Do you have obligations like student loans and car payments?
• Can you reduce expenses?
• What are your time constraints?
• Are there enough hours in the day to achieve your goals?
• Is your schedule different throughout the week?
• If you are leaving full time farming to take off farm work, what is your goal? Is it short term or long term?  How will you measure success?

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