Don’t Psych Yourself Out About Business Planning

Courtesy of Roxanne C., Philadelphia PA 

We are frequently asked to assess farm start ups. Long wordy business plans usually indicate a lack of understanding of what is most likely to determine success. For beginning farmers, the shorter the plan the better.

Traditional ag training has made a fetish out of visioning, self-analysis and planning. If you’re trying to decide whether to move to the middle of nowhere, take on 5 or 6 figure debt, or hitch your wagon to government support, it probably is useful to have your head examined. But time-consuming paper exercises and detailed 3 year plans bear little relation to how effective you’ll be at growing vegetables or running a business.

How you plan to make money is what you need to focus on, and to be able to make clear. And that can be thought through on the back of an envelope as follows:

• List your start up costs. Keep them as minimal as possible.
• Decide on the number of your marketing weeks, which is the amount of weeks you will have products for sale. Novice SPIN farmers plan on 20 – 30 marketing weeks.
• Set a benchmark income figure. The benchmark for novice SPIN farmers is $500/week gross for 20 – 30 marketing weeks, for total first year income of $10k – $15k.
• Divide your total income by the number of your marketing weeks to get your average weekly income total. That’s your targeted weekly cashflow.
• Budget overhead at no more than 10% of your total income.

What you now have is a framework for pacing and measuring yourself, keeping yourself honest, and eliminating unpleasant surprises, since you can evaluate and gauge your success against your starting benchmarks as you go through the season. At the end you can reset benchmarks based on experience for year two.

For feedback on what is mission critical to your success, spare us your psychological profile. Use your energy for digging deep into your garden beds, not  your psyche. Just show us your numbers. Then use SPIN 2.0 and the online support group to help you implement a production plan that ensures you meet them.