Advanced Crop Planning For Profit (Part 2)
Advanced Crop Planning For Flower Farmers Part 2
This blog (part 2) is the second in a 4 part crop-planning blog series. Each part will outline a step (or two) in the crop planning process. If you missed part number one, go back and read it here.
Today we’ll be discussing part 2:
· Part 1: Financial Projections
· Part 2: Sales Projections & Marketing Chart
· Part 3: Production Plan & Field Map
· Part 4: Greenhouse Plan and In-Season Considerations
Crop Planning Part 2: Sales Projections & Marketing Chart
In this part of the process we will be projecting how much we think we can sell through each of our outlets, and then create a marketing chart based on those numbers- which is basically a projection how much of each crop we can sell through each sales outlet.
Before we dive into part 2, I want to emphasize that I will be giving instructions on how to do a very simplified marketing chart. In my own crop planning process, I complete a much more detailed marketing chart for each of my sales outlets. In a detailed marketing chart, I project the # of bunches from each crop or product over every separate week of the growing season within each sales outlet. It is a big “to-do.” It is extremely helpful in planning to grow only what I need, so there is minimized waste. Remember that any flowers that grow to maturity cost a lot of money to produce. You’ve already spent money on seed, materials and labor to grow, transplant, weed, pinch, net, etc.. If you do not harvest or sell them, you are literally throwing money out the window. On a farm, some waste is inevitable, but we want to minimize it as much as possible.
When first starting, my advice is to start with this simplified version until you get a better sense of what direction your business is headed and how much you can sell each season. Then, you can deep dive into detailed marketing and projection charts. I plan to create a class to teach this, because its far too detailed to outline in a blog post.
CREATE YOUR SALES PROJECTIONS
Step # 1: Open an excel spreadsheet (or a sheet of trusty graph paper). In the first column on the left, list all the months of the year in a list. In the first row at the top, list all of your sales outlets (Farmers market, CSA, Weddings, etc.). Now, go through each column and write down an educated guess on how much you think you will sell each month. These numbers should ideally be based off of previous years sales records (this is why you need to keep good records!!). For example, based off my previous records, I’m fairly certain I can sell at least $1,000 worth of flowers every week in July . That means my monthly sales projection for July is $4,000 (because there are 4 weeks in a month).
Step #2: Total your projected income for each month and for each outlet. This should come out somewhere near your projected gross income that we figured in Part # 1 of the Crop Planning Process. If it’s not, be realistic and make adjustments based on your goals and previous sales & production records.
Now, throughout the season you have sales targets for each month and each sales outlet. Keep an eye on your sales throughout the year to ensure you are meeting your goals. If you aren’t, make note of it, and observe trends to discover why. Without creating sales projections (concrete, actionable goals), how will you know what to be aiming for?
CREATE YOUR SIMPLE MARKETING CHART
Step # 3: Open a new tab in your excel spreadsheet (or a fresh sheet of graph paper). In the first column on the left, list all of your flower crops you plan to grow this season (zinnias, snapdragons, dahlias, ageratum, narcissus, celosia, dara, dianthus, etc. etc. etc.). In the first row at the top, list your sales outlets across the top of the page (Farmers market, CSA, Weddings, etc.).
Step # 4: Based on your sales projections from steps #1-2, figure out how much of each crop you will need to (or think you can) sell through each outlet to reach your sales projection goals. You should ideally be able to refer to past crop sales records to make appropriate projections.
To do this, consider how many weeks of production you will get from each crop. For example, I know I get about 3 weeks of production of stock (matthiola). I am pretty confident that based off previous years records, I can sell at least 20 bunches each week at the farmers market (while it’s blooming over that 3 week period, obviously). Therefore: 3 weeks of production x 20 bunches a week = 60 bunches total. Now I know I need to produce at least 60 bunches of stock to sell at the farmers market.
I also know I can probably sell at least 20 bunches each week to my florists. Therefore: 3 weeks of production x 20 bunches a week = an additional 60 bunches total.
Add together the number of bunches for each sales outlet to figure the total number of bunches you will need to produce. Knowing I can sell 60 bunches through the farmers market, and 60 bunches to my florists, I know I will need to produce at least 120 bunches of stock (because 60+60=120).
Repeat this process for each crop you plan to grow and each sales outlet. If it helps, you can also project these numbers over a week-by-week basis, but if that seems too overwhelming, just start with a basic idea of how much of each crop you can sell through each outlet.
Step #5: Add in your averages price received under each crop for each sales outlet. If you get different prices from different outlets, be sure to include that. Here, you can total your average price received to get your projected gross sales for each crop. You can then total your projected gross sales from all your crops. This number should roughly equal your overall projected sales from part # 1 and your projected sales from above. If it doesn’t, make adjustments as necessary.
Here is an example of a simplified marketing chart:
(I just made up these numbers and prices and do not necessarily represent my own pricing or sales):
Example of a simplified marketing chart
This part of the process will most likely take some time. Set aside at least a couple of hours to complete your marketing chart, and be sure to do it at a time when you have no distractions. This takes a bit of concentration - but it’s SO worth it.
Moving forward: This marketing chart will also serve as your harvest targets in the next step in the crop planning process. You’ll use these harvest targets to create your production and greenhouse plan. I’ll show you how over the next two blog posts.
Remember that in order to reach your destination you must know the road to get there. If you don’t have a map outlining your directions, you’ll end up lost in the woods somewhere, asking a tin man for help.
In addition, I understand just how chaotic and unmanageable a farm can feel. The work that comes with a farm will swallow you whole if you let it. Apart from getting clarity on the quality of life you want to lead and setting clear boundaries around work hours- a crop plan is a amazing tool to better manage your time on your farm.
Finishing your crop plan will allow you to practically have your schedule set for the entire growing season - meaning you’ll be less stressed and overwhelmed during the busy season. You’ll know exactly what you have to do and when. I can’t emphasize just how important your crop plan is to the over all health of your farm AND YOU! You’ll see what I mean when I publish the next parts of the crop plan process.
You’ve done a GREAT JOB so far! You just completed the second part in the four part series. Come back next week to see part # 3. Stick with this process, I promise it will be SO worth it at the end! SEE YOU SOON!
Jenny