Wednesday, January 2, 2013

Five Tips for Farm and Food Businesses in 2013

Take time this winter to consider last
year's results and plan for next year.
Maybe it's too strong a statement but I'll write it anyway.... What you do this winter could mean the difference between flourishing and shutting the doors.  These five tips will help you prepare for the coming year (and beyond).

1. Assess your success - One of the best things to do in January and February is analyze your records from last year.  How was production?  Did you meet your financial and business goals?  Any idea why you may not have hit your targets, whether you were under or over them?  What did you learn that would cause you to re-think what you had planned for 2013?  Maybe it's a little change; maybe it's huge.  Either way, note what it is and make the necessary changes.

Whether you sell on the floor, wholesale, or retail,
you need to consider your markets for 2013.

2. Explore your markets - No matter if you are in a commodity market (like most milk or grain) or a direct market (like a farmers' market), learn about where the markets are expected to go in 2013.  Should you lock in prices on your grains?  Should you pull out of that store and target a restaurant whose chef is interested in featuring locally-grown produce?  Should you change some flavors in your baked goods or cheeses?  Talk to neighbors, industry players, and others who have thoughts/opinions.  Learn from them.

3. Take a close look at policy changes - Will health care reform (so-called "Obamacare") affect you?  Will changes in tax laws or the Farm Bill impact how you do business?  What about this Fiscal Cliff we are hearing so much about?  Although I've not been around as long as some others may have been, I can't recall a year in which there was more uncertainty about government policies that could affect farms and food businesses.

Sarah Cornelisse teaches how
social media can be used to
market and manage a business.
We have more on that and other
topics coming up this year.
4. Learn - Take time to improve your most important production input, your managerial ability.  Attend workshops and conferences.  Take advantage of downtime to talk with friends and neighbors in the industry.  We in Penn State Extension have several workshops coming up and we regularly promote those of other organizations.  Check out our webpage (farmbusiness.psu.edu) and some recent blog posts (here and here) to learn more.

5. Embrace technology - I'm rarely without my smart phone so this one shouldn't surprise anyone, coming from me.  However, I strongly urge you to take advantage of information technology.  I believe that managing data and technology will be what differentiates successful from unsuccessful businesses, including farms and food businesses.  With data and information all around us, the advantage will go to those who manage it best and use it to make the best decisions.  Some examples:
  • Take time to follow the right people on Twitter.  (BTW, I'm @jeffhyde.)  
  • If you are thinking really long term, talk to a business consultant to see what they can do to help you make sense of the information that's out there.  
  • Join LinkedIn and connect with people in industry, academia, and some who are like you.  
  • Like some businesses on Facebook or start a page of your own.
There are so many ways, including tons in addition to these, to "listen" in today's connected world.  Believe me, "listening" is much more valuable than "speaking" on social media.  (To learn more, check out Sarah's post, "The Value of Social Media as a Market Research Tool.")  The trick is weeding out the noise.

There's always a lot to do in any business.  Make sure you attend to these things and have fun.  Love what you do!

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