5 Financial Tips for Farm Business Success

When looking at thriving farm businesses, we can usually identify several reasons for their success. They tend to have unique value propositions, for example, along with consistently top-quality products, smart operations, and strong values that resonate with customers.

But successful farm businesses share another critical quality: They pay close attention to their numbers. They are resourceful with funds and manage their money well.

This is definitely the case for Rustic Road Farm, featured in the latest Edible-Alpha® podcast. Founder Marc Bernard shares how he and husband Luis have built an impressive diversified agricultural business, complete with a large CSA, a bustling farm market, agritourism, and a growing value-added brand. However, if they hadn’t had a solid grip on their financials, Rustic Road Farm likely wouldn’t have achieved all of this.

The money stuff can be tricky, especially for farmers just starting out. But with a little guidance, they absolutely can launch and scale successful ag businesses. Taking a page from Rustic Road Farm’s book, here are five financial tips for building a prosperous farm enterprise.

1. Count everything

No matter how small or low-tech an operation may be, farms should closely track inventory, sales, labor costs, and other performance metrics. “Count everything!” Marc says. “You have to have numbers. Otherwise, how do you know what you’ve sold?”

Recording key metrics gives farmers a wealth of data to inform their marketing, growth, and even financing strategies. Plus, it pays off when preparing income tax returns and applying for loans and grants.

2. Pursue microloans

When just starting out, farmers often have a hard time securing bank loans. That’s why USDA’s Farm Service Agency offers accessible, flexible microloans for beginning, niche and small-scale operators. New farmers should strongly consider pursuing these microloans—as well as hiring a grant writer to help prepare applications.

“Our numbers were so poor in the beginning that we didn’t even bother with a conventional bank,” says Marc. Instead, Rustic Road worked with FSA for several years, helping it grow into a more credit-worthy business.

3. Be careful and creative with funds

Though microloans help, money is still typically tight for small and beginning farmers. And with so many expenses and uncertainties in this business, funds can get gobbled up quick.  

“You’ve got to be careful with your money,” Marc says. “We got a $35,000 microloan, and when you have to be creative, it is amazing how far $35,000 can go. For example, we didn’t buy a brand-new tractor; we bought one used.” Marc suggests thinking critically about each potential purchase and not taking profits until the entire loan is paid off.

4. Invest in a strong team

When deciding where to allocate limited funds, Marc believes that talent, dedication and passion are well worth investment. He and Luis have built an amazing team by hiring workers with unique skill sets, empowering key employees to make decisions, and paying their people well. Yes, offering higher-than-average wages will cost money upfront, but it should pay off in dividends long-term.

5. Work with an accountant

Accountants can help farmers manage money, analyze key metrics, and ensure their businesses are primed for growth. Marc and Luis meet with their accountant a few times a year, finding it incredibly helpful for taking a broader view of their business and keeping it on a successful trajectory.  

After starting from scratch just over a decade ago, Marc and Luis Bernard have grown Rustic Road Farm on the fringes of suburban Chicago into something really special. Today, they sell organic produce, pastured meats and eggs, and a range of value-added products direct to consumers, and they love hosting the community on-farm. In this podcast, Marc shares their fascinating journey and offers excellent advice for launching and growing a viable ag business.

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