Most of us don’t come to farming because we love bookkeeping, marketing, or reading insurance plans. However, those elements are critical to being successful in agriculture. As Richard Wiswall, author of The Organic Farmer’s Business Handbook has said, if you want to keep farming, you have to “farm for profit, not production.”
At the same time, across the entrepreneurship spectrum, businesses require three different kinds of smarts and interests: passion for and knowledge about the product, the marketing, and the accounting. Although every business needs all three, it’s incredibly rare for one human to have them all. As entrepreneurs, we all typically have passion for the product and then we likely get excited about the marketing or the accounting. It’s important to figure out which is your passion early on. Can you find a business partner who gets excited about the things that bore you? Can you hire an accountant?
Regardless of how you achieve it, managing and thoroughly understanding your farm’s financials can make a big difference in your level of success. It will help you to track your position and know when you’re having a good year or a bad year so you can pivot and make changes. It will allow you to talk to potential lenders, investors, customers, and donors more effectively. It will help you to make better decisions and will help you make it through the first five years when 43% of farm businesses fail. We encourage you to get to know the resources in these pages and make your financials a priority.