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Best Tool For Beginners: Cash Flow

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Many beginning farmers who enroll in our learning programs already know the standard operating equipment of a SPIN farm – a cooler, tiller and seeder. An important tool they haven’t thought about is cash flow.

Cash flow is crucial for any small business, and it’s variability is a source of a lot of stress. One of the main objectives I had in creating the SPIN-Farming system was to make cash flow more steady and consistent.

One way to do that is to get off to a strong start early in the season. Being first at market with crops gives you early cash flow, before many other farmers have even started harvesting. It also gives you a jump on establishing regular customers. Examples of some of my early season crops: carrots,radish, scallion, spinach.

Early season cash flow is what SPIN farmers plan for. This is a $1,000 market stand in early May.

Your crop repertoire also has to be diverse enough to support sales through mid and late season. So you need to aim to have a wide variety of crops,,consistently, as long as your season lasts.

Another way to achieve steady cash flow is to plan for it. That’s why important factors in SPIN’s business planning process is setting a revenue target and determining the number of your marketing weeks. Divide the two to get your average weekly revenue target. That’s your cash flow, and by tracking it each week, you can gauge your progress and be able to make adjustments as you go along to keep you on target, or change your targets, if need be.

Maintaining cash flow is among the most stressful parts of any business, but farmers have a lot more control over keeping it steady than they realize. They just have to plan for it, by thinking through their production strategically, and applying SPIN-Farming’s business framework. You may not always like the numbers you see, but you won’t be left at the end of the season asking what happened.

LEARN THE BUSINESS OF GROWING FOOD FROM THE BEST MINDS IN BACKYARD FARMING TODAY BY JOINING BACKYARD RICHES HERE.

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