the honeymoon's over

Farmer Jon here, I happened across an article the other day called Top 10 reasons small businesses fail. I thought it would be a good refresher of things not to do. Instead it was a wake up call. I felt like we, to some extent, were guilty of probably six to eight of those ten! I'm no expert but I don't think that's good. The good news is, I'm fairly confident we will still succeed but only if we fix some of the things mentioned in the article.

The biggest problem, in our case, was emotion. We were too emotionally attached to everything, which led to poor business decisions based solely on emotion. I think being emotionally invested in your business is very important (especially if you are a farmer) but I think we were TOO invested. Or at the very least, we were just focusing that emotion in the wrong areas. I've already delved into this topic on multiple occasions: balance & rocky mountain oysters. But I feel like I've officially made the change in mindset. It's not a drastic change but it is a different way of thinking that needed to happen. "So what does that mean?", you might ask. Well, I'll tell you:

1. We continue with what we've started in regards to putting together a good inventory and accounting system that we can stick to and that we can quickly and easily extrapolate valuable information that we can use in making business decisions. For instance, right now I can't tell you exactly how much we'd need to make off of each hog to break even. How am I supposed to make money if I don't know what my break even point is on something? I can't.

2. Once we have those systems in place, we need to evaluate each enterprise and determine which offer the most profit for the amount of time and resources spent. If they all make sense to keep, that's fine, but if not, it needs to be eliminated from our operation or changes need to be made to make it profitable.

3. Re-evaluate our goals based on the conclusions of 1 & 2.

The rest will come with time, as we follow through with the changes mentioned above. It's funny how they all tie together. Our "poor accounting" is inhibiting our ability to determine whether "the math works" and/or what our "operational inefficiencies" are. I also think that our "out of control growth" led to a lack of a "cash cushion" and "operational mediocrity" due to being spread to thin. All of which link directly to "dysfunctional management" and the root cause for all of this stems back to some poor decisions based on our emotions which I think qualifies as "owners who cannot get out of their own way".

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Farm Update

Sorry we haven't posted much this week. They're having issues with the new equipment they installed for our internet. It's been down half of the week and it's down again as of yesterday afternoon. I still have faith that they will get everything ironed out and we, eventually, will stop having problems. Thank goodness we have a backup internet source, albeit a slower one.

Let's talk about... ACCOUNTING! I know, I know. I'm sure you're jumping up and down with excitement. We cracked open our Quickbooks Pro software this week and started setting it up for our farm. There are a lot of neat things on there but it can be a bit overwhelming. I wish there was a common accounting program that catered more towards farming. But when I searched online most people recommended Quickbooks, along with a book called The Quickbooks Farm Accounting Cookbook. I feel like we're automatically going to get audited by the IRS for buying an Accounting "Cookbook". I hear they don't like folks cookin' the books. Regardless, it should show up today or Monday so we'll see what it has to offer.

The first few months were chaotic enough that we didn't do a very good job keeping track of our expenses, so it will take us some time to get everything sorted out. Luckily, I started using a farm checking account and logged everything in the check register (which I haven't done since high school). After we get the farm sorted out, we need to do the same with our personal expenses. YIPPEE! :p

Before we started in this endeavor, we had decided that the first year would be a trial and error year. Where we would try a bunch of different things and see what worked and what didn't. We are starting to compare and evaluate those "things" but it's not as cut and dry as I had hoped.

--And I'm going to leave it at that for now. I have to get going but let's pick up this discussion again tomorrow morning.

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