Start small

Most successful businesses have thought big, but started small.  Sometimes growth is rapid, and sometimes it takes multiple generations.  

Starting small can have tremendous benefits for new and transitional farmers.  It can limit the size of your mistakes by allowing you to make course corrections or production changes early.  If the venture doesn’t turn out as planned (customer interest or rapidly changing market conditions) it will probably cost you less to exit sooner rather than later.  Just as new food products often begin as experiments in the home kitchen, starting small can enable you to assess the opportunity’s fit with your land, personality and interests.  Starting small and growing gradually can enable you to effectively analyse each development, finance growth through revenues and maintain control.

You don’t necessarily need to be able to buy everything and launch the perfectly planned and implemented operation in order to get started.  Ideas to get started small include:

• Focus scarce resources on items or investments that will have the biggest impact (yields, managing risks or making money) or pose the greatest risks.
• Learn to let the small things slide
• Manage for cash-flow, not end of year profitability
• Think about “function” not form,  If you need field tilled, Think about all the ways to get it tilled besides buying a tiller.  Rent, borrow, trade or hire whenever possible.  Only buy as a last result and after careful analysis.
• If you don’t have a significant nest egg to work with initially, select crops, livestock or services that will generate returns quickly.
• Build your forecasts based on what you can realistically do (1 person working 40 hours a week can produce _____  sq. feet of vegetables, $ or CSA shares) as opposed to what you would like to produce/sell.
• Look at services/additional revenue streams for the farm such as custom work, agri-tourism, logistics or marketing.
• Capture the greatest margin by reducing middlemen
• Take advantage of free help (extension agents, advisory programs, friends, family and even customers) and professional services (accountants and farm business advisors).
• Look for creative ways to get started – grow produce in vacant lots in the city or rent underutilized barn space from another farm.  Sometimes it is a matter of finding the right partner (e.g. semi-retired new farmers with equity with younger new farmers with good backs and energy).
• Watch auctions, web forums and classified ads for used items.
• Explore leasing as a way to maximize your purchasing power and debt exposure
• Use free and low cost marketing techniques such as word of mouth and getting press coverage
• Establish rules and behaviours to control expenses

The most important tactic however is to embrace and maximize the benefits of being small, nimble and flexible.  Take advantage of new opportunities before your competitors can.  Brand yourself and tell your story.  Stay in control.  Successful big companies, never stop thinking small.

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