NOT Keeping These Two Key Records Is Asking for Failure
Essential Record Keeping For Flower Farmers
“What gets measured gets managed”
This well-known quote from Peter Drucker could not be more true on a farm.
Farming is a unique business in which farmers get so caught up in the wellbeing of their plants, animals, eco-systems, soil health, and other parts that some of the most important aspects of the business get forgotten.
No matter what your most prized values are on your farm, the fact is that farms need to make a profit and pay the farmer a living wage to fully serve the world and operate in a way that truly makes a difference. But often, keeping close track of profitability gets pushed to the backburner amidst the in-season chaos and overwhelm of harvest, greenhouse chores, deliveries, and fieldwork (I’ve been there!).
This is the number one mistake I see new farmers make (myself included when I first started): not measuring the success and profit of each endeavor on their farm. This is one sure way to ensure that your farm FAILS.
Keeping key records to measure crop profitability is both ESSENTIAL and EASY on your farm. You need to know both your total revenue and your profit margins. It takes hardly any time at all (about 15 minutes a week or less) and can help you double, or even TRIPLE your revenue and profits on your farm.
Have you ever finished up the year to look at your numbers - and at first think “WOW! I made $60,000 this year!” …. And then immediately thought “Well, where the **** did it all go?!?” because your bank account has precisely zero of those dollars in it?
This is the perfect example of how total revenue doesn’t always tell the whole story…
THIS is why it’s so important to keep track of your enterprises: so you can measure the specific amount of profit your business generates.
Your farm could make $100,000 a year, but if it’s SPENDING $90,000… well, that $10k left over is not going to get you very far.
If you measure which crops have the highest profit margin and focus on growing those: your farm could make $100,000 a year, but be spending only 50,000 - leaving you with an actual living wage of $50,000 a year.
See the difference? It’s a BIG ONE.
The only way to measure your farms true profitability is to keep records.
The two most essential records I keep on my farm are:
Crop Sales Records - Grab a free record keeping template HERE.
Crop Expense Records - Grab a free record keeping template HERE.
These two records are all I need to ensure overall farm profitability by knowing my numbers. Key business decisions like deciding what to grow, and how much to grow of it are significantly influenced by the cold, hard facts this record keeping process reveals. Of course, decisions on the farm are also emotionally driven, but the key is to strike a balance between the two. Just because you absolutely ADORE a flower, doesn’t mean you should keep growing hundreds of feet of it if it’s losing you money. You can always stick a few special plants in your private garden to enjoy.
For our Sales Records: Every week as orders go out the door, they are jotted down in a folder labeled “SALES RECORDS.” Each sales outlet has a sheet in the folder for each week of the growing season. There is a sheet for florist sales, CSA, Farmers Market, and Miscellaneous revenue. Each Sunday after the truck returns from our weekly Farmers Market, I grab our sales record and quickly jot down the market’s sales for that day.
Then I take all the figures from the past week that were entered into the sales records and enter it into an excel spreadsheet for easy tabulating. At the end of the season, all the total sales for each crop is accounted for in one, simple place. This process takes less than 15 minutes a week and results in INVALUABLE information. These numbers get plugged into my enterprise budget analysis at the end of each season to determine overall crop profitability. Your online store or credit card processor (squarespace, quickbooks, shopify, square) can keep track of sales per crop for you also, but I always jot it down since we sometimes accept cash & checks. I want to make sure individual crop data doesn’t “fall through the cracks.”
You can get a free copy of the farmers market sales record sheet I use by clicking below:
For our Crop Expense Records: The individual crop records are designated for our top earning crops and for crops we are experimenting with or want to learn more about. On this sheet, I keep track of each task associated with growing it, and all materials. Labor hours are recorded for every step: seeding, transplanting, weeding, spraying, irrigating, covering/uncovering with frost cloth, harvest, etc. Material costs are also recorded for each step: cost of seed, potting soil, seedling trays, fertilizer, rubber bands, etc. It’s really quite simple and easy to jot down labor hours as you are doing them, you just have to make it a habit in your daily routine. Keep your crop record book handy while you work. This makes it easy to calculate actual profitability at the end of the season in your enterprise budget analysis.
You can get a free copy of the Crop Expense Record sheet I use by clicking below:
These records are simple and easy to keep. They are ESSENTIAL for knowing the numbers on your farm. You cannot effectively manage your revenue or profits without knowing your numbers.
By keeping these simple records over the past three seasons, I have managed to increase profits each season by analyzing the results and by making strategic growth decisions. Not only have I made more money, I also am not spread as thin because I am focusing on growing a few, profitable crops, rather than scrambling to grow many. Doing less, but better. You can do this, too!
NOT keeping these records is a sure-way to let your farm fail.
If you want your farm to be successful you MUST know your numbers, and manage your decisions based on those numbers. Measuring profitability per crop is an essential farm business job.
Remember, “What gets measured, gets managed.”