The One Crucial Process That Sets My Farm Up For Success

Over the years, I have been tweaking and perfecting my end-of-year annual farm review process.

This farm business planning process is more of a end of year review AND planning process for the year coming up. It is a big task, and usually takes me several weeks. I freaking love doing it - I get really excited about numbers, discovering new opportunities, and the promise of a fresh start in the upcoming growing season.

Farm business planning is crucial for success. You can’t just close your eyes, shoot in the dark, and expect success.

Every December, I pull together all my thoughts/dreams/goals/reflections and try to manage them into a cohesive, actionable document to help me achieve my goals (which seem to drastically change year to year..).

Some aspects of my end-of-year review are of my own creation, but some have been adopted through other farmers, farming books, and other business icons. I figured I would share my process here, in case anyone finds it helpful in planning within their own business.

Here are my basic End Of Year ANNUAL REVIEW & PLANNING Steps:

1. Financial dreams and goals -2022 and beyond

2. Production/Farm dreams and goals - 2022 and beyond

3. Projected vs Actual Reports: production, harvests/yields, and expenses/sales - 2021

4. Projected vs Actual: Enterprise Budget Analysis- 2021

5. Stop doing/Keep doing/Start Doing

6. Achievements / Successes /Disappointments (thanks to Taylor Mendell @footprintfarm for #5 and #6)

7. Marketing Plan - 2022

8. Crop/Production Plan - 2022

9. Marketing & Communication Strategy Plan - 2022

10. Business Plan Revision: 2021 Profit & Loss Statement, 2021 Balance Sheet, & Cash Flow Projections

Here I’ll go into detail about each step and it’s importance to the farm’s success:

1. Financial dreams and goals: I am a dreamer - I’ve been told that it’s because I am a Libra, probably more because I am an INFJ (which is my myers-briggs personality type, you can find out yours here: https://www.16personalities.com/free-personality-test). I love to day dream and fantasize about “what could be” and “what’s possible.” The hard part for me is choosing a few major things to focus on, and then executing them proficiently. In this step I do some dreaming about the kind of money I want to make this year, in 5 years, and in 10 years - and then make a realistic plan for the next 5 years on how I will make that happen.

2. Production/Farm dreams and goals: In this step I think about all the aspects of production that I love doing, can’t stand doing, or anything in between. I take into consideration crops that I plant but never really end up harvesting or using (looking at you scabiosa and gomphrena!!)- which is a HUGE waste of time, money, and resources (this is the type of stuff that makes farms unprofitable). I think about how it would feel to focus on aspects of my business that I really love, like growing in hoophouses. I also consider aspects that I don’t love that I could eliminate altogether (not growing scabiosa) or can improve the processes on (like making dahlia digging easier and more efficient). I also consider how my work life affects my family and social life (working 14 hours days? Working weekends?) I write it all down in a stream of consciousness. After this, I usually have a good idea on what projects, crops, and outlets I want to continue to focus on.

3. Projected vs Actual Reports: production, harvests/yields, and expenses/sales: I keep records of our harvests and sales, and compare them to the projections I made the previous year. This is always a work in progress, and I am continually trying to improve the process of record keeping -but this step is invaluable in seeing in plain writing (or in this case, numbers) what is making money, what is producing well, and what is not. Sales forecasting cannot properly be accomplished without this step.

4. Projected vs Actual: Enterprise Budgets: For each of our top crops, I do a comparative enterprise analysis to see what each crop brought in for gross sales, and what I netted from each one. Then I compare it to what I expected- hopefully they match up, but sometimes they don’t. THIS IS ABSOLUTELY INVALUABLE. If you are not doing this on your farm, YOU NEED TO BE. You also need to be doing it annually. (I wrote a post all about this here). My enterprise budget analysis sets the stage for profitability on my farm, it shows me exactly what I make money on (and how much), and is the best tool for making decisions on what to grow, how much to grow, etc. Without this process, you are shooting in the dark.

5. Stop doing/Keep doing/Start Doing: Take a sheet of paper and divide it into 3 columns: Stop doing/keep doing/Start doing. Now, freely write anything that comes to mind that you and your team feel like didn’t work well/isn’t worth doing anymore, things that you thought you did well at, or things you can start doing to improve your business/procedures/etc.

6. Achievements /Disappointments: A basic inventory of what went well, what didn’t. I then (based off the genius from footprint farm) take 5 different colored highlighters and assign a color to each improvement category, that could potentially improve these disappointments: Research (orange), Infrastructure(blue), Equipment (purple), Systems(yellow), Help(green). I highlight each disappointment with the color of the improvement category that will help improve the disappointment or solve the problem. For example, for many years I have been frustrated with the fact that we have been working out of my teeny, cluttered, and cramped garage. The clear solution to this problem is infrastructure (I highlighted “workspace sucks” under disappointments in blue for infrastructure): If we had a dedicated work space for people to pick up flowers and for the team to work in, it would make things smooth sailing. This way, you are identifying a real solution to the problem, to hopefully initiate a roadmap moving forward, instead of just identifying the problem and not doing anything about it. (We are now building a pole barn for our new studio/workspace!!).

7. Marketing Plan - 2022 : In this step I do my best to put on paper how many bunches of each crop I can realistically sell through each outlet in 2022. I then use this data to pull into my crop/production plan.

8. Crop/Production Plan - 2022: I could write an entire book on this process, but for now, I’ll just say that I figure out what & how much needs to be planted, where, & when.

9. Marketing & Sales Communication Strategy Plan - 2022: In this step I identify ways I can add value to my customers. Whether it be my market customers, florist customers, or others, this step is all about my actual marketing (not just where or how I sell flowers) and how everything I do is about helping my customers and providing massive value to the world. From there, I plan it out on a yearly calendar.

10. Farm Business Plan Revision: & review 2021 P & L, 2021 Balance Sheet, & Cash Flow Projections: In this step I finalize all my finances for the previous year, and revise my business plan moving forward. Again, I could write an entire book on this subject (maybe another blog post?) but for now, I will leave it at that.

I’m curious to know, what is your end of year review like? Do you have a Farm Business Planning process, or do you just close your eyes, use your intuition, and hope for the best? Did you find this helpful, or are there any other steps of this process that I can elaborate on that would help you? Let me know by commenting below, & best of luck planning for 2022!