When people start a new farm without knowing what they are getting into. It's not uncommon for them to make many mistakes, and end up with a failed business. This blog will cover 6 of the more common farm management mistakes that can be easily avoided.
These 6 management mistakes include:
- Not knowing the land
- Poorly managed finances
- Mismanagement of time and labour
- Lack of industry knowledge
- Inability to act quickly and decisively
- Unwilling to take calculated risks
1. Not knowing the land
When people start a new farm, they need to be aware of the land that they are working with. Without this knowledge, it can lead to many mistakes and failures.
For example, if someone starts a farm on land that is not suited for farming, they will quickly run into problems. The soil may be too sandy or too rocky, the climate may be too hot or too cold, and the list goes on.
All of these factors can lead to a failed crop, or low animal performance, which will, in turn, lead to financial problems.
You see, if you choose to farm animals not appropriate to the environment, they will not perform as well as they could. For example, chickens need a certain amount of space to roam, and if they are confined to a small area, their meat will be tough and stringy.
The same can be said for crops. If the wrong crop is chosen for the land, it will not thrive and may even die.
Knowing the land will go a long way toward making sensible farm management decisions.
2. Poorly managed finances
Another common mistake that people make when starting a new farm is poor financial management. This can include overspending on unnecessary items, not budgeting properly, and not keeping track of expenses.
All of these factors can lead to financial problems down the road, which can be difficult to recover from. Solid financial planning will reduce risk in your farm business.
Careful spending and avoiding unnecessary discretionary spending will help you to keep your farm business on track and safeguard for tough times by building a war chest of funds.
Working with your accountant and even a farm financial advisor can help you put together farm financial budgets, and cash flow projects, and help you understand your profit and loss and balance sheets.
Farm financial management comes naturally to some and is foreign to others. Remember, farming is a lot about the strategical long run as well as the tactical daily management decisions.
3. Mismanagement of time and labour
Mismanagement of time and labour can be a major problem for farm businesses. If time is not managed properly, it can lead to tasks being done late, or not being done at all.
This mismanagement of time and labour can lead to low production, and ultimately, financial losses. After all, if animals aren't fed appropriately, their welfare and productivity suffer.
Labour mismanagement can also lead to low animal and crop performance, as well as injuries to workers.
People management is crucial for maintaining a smooth farm operation. For example, the Covid-19 pandemic had farmworkers isolated, which meant that relief farmworkers were required. This circumstance is difficult on farms because the pool of staff is limited due to the geographically isolated nature of farming. Thus, the need for maintaining a healthy workforce is paramount to a successful business.
4. Lack of industry knowledge
Lacking industry knowledge can include not knowing the proper way to care for animals, grow crops, or even market and sell products.
Industry knowledge is one of those things where you need to spend time in the industry to understand the dynamics. There are many ways to learn this information, such as books, online courses, and attending conferences.
Agricultural industries spend a lot of money on developing resources, so check in with your local authority to see what they have on offer.
5. Inability to act quickly and decisively
In farming, things can change very quickly. Crops can die, animals can get sick, and the weather can take a turn for the worse. Not to mention, things break down, people get sick, and not everything goes to plan.
When these things happen, it's important to be able to act quickly and decisively. This means having a plan in place so that you know what to do when something goes wrong.
Failing to act quickly and decisively can lead to major problems as discussed above. Not to worry, if you have the authority, you just need the responsibility and confidence to make timely decisions.
Mostly, if you have planning in place you can avoid many unforeseen issues. This planning helps alleviate the times that you do need to act quickly.
6. Unwilling to take calculated risks
In farming, there is always some risk involved. Whether it's the risk of crop failure, loss of animals, or poor financial planning, there is always a chance that things can go wrong.
In order to be successful in farming, you need to be willing to take risks. We're not talking about spending time in the casino or any other high-risk activity. We're talking about calculated risks. This means taking the time to learn about the risks involved in your specific farm business and making sure that you have a plan in place to minimize those risks.
When it comes to management mistakes, these are some of the most common ones made when starting a new farm. By being aware of these mistakes, you can be sure to avoid them in your own farm business.
With proper planning and execution, you can be well on your way to a successful farming career.
Until we meet again, Happy Managing.
- The Dedicated Team of Pasture.io, 29 April 2022