Identifying Alternative Enterprises for Your Farm 2005 Farm Science Review Small Farms Center

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Identifying Alternative Enterprises for Your
Farm2005 Farm Science ReviewSmall Farms Center

• Mike Hogan
• Extension Educator
• And Co-Coordinator
• Sustainable Agriculture Team

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A Three Step Process

• Determine Objectives and Goals of the Family

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A Three Step Process

• Determine Objectives and Goals of the Family
• Determine if These Objectives are Feasible

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A Three Step Process

• Determine the Objectives and Goals of the Family
• Determine if These Objectives and Goals are
  Feasible
• Choose an Enterprise!

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Step 1 Determine Objectives

• Un-timed, general statements
• Indicate where you want to be in the future
• Should be used to direct resources, time, and
  activities

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Sample Farm Objectives

• Increase net worth
• Develop a business which can be passed on to the
  next generation
• Increase farm profits
• Decrease debt
• Retire early
• Allow more time off for family activities

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Goals

• S.M.A.R.T. statements of what is to be done to
  achieve an objective
• -Specific
• -Measurable
• -Attainable
• -Rewarding
• -Timed

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Objectives and Goals

• Objectives
• -Increase net worth
• -Increase farm profits

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Objectives and Goals

• Objectives
• -Increase net worth
• -Increase farm profits

• Goals
• -Reduce debt to asset ratio by 5
  before
• December 2005
• -Reduce purchased feed cost in 2005 by
  implementing managed grazing

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Objectives and Goals

• Objective
• -Retire early

• Goal
• -???

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Objectives and goals can be powerful determinants
of success

• 1953 3 of Yale University graduating class had
  written goals
• 1973 Which group had higher net worth, the 3
  with written goals, or the other 97?

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Objectives and goals can be powerful determinants
of success

• Net worth of 3 was greater than the entire net
  worth of the 97

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Step 2 Determine if objectives and goals are
feasible

• Evaluate physical resources
• -Land
• -Soils
• -Water
• -Climate
• -Buildings and equipment

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Step 2 -Determine if objectives and goals are
feasible

• Evaluate financial resources
• -Capital available
• -Off-farm income available
• -Cash-flow situation
• -Will it impact family lifestyle?

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Step 2 Determine if objectives and goals are
feasible

• Evaluate management resources
• -Personal skills
• -Comfort with risk
• -Information access
• -Industry infrastructure

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Step 2 Determine if objectives and goals are
feasible

• Evaluate labor factors
• -Labor needs by season
• -Family or hired?
• -Who will manage labor?

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Step 2 Determine if objectives and goals are
feasible

• Evaluate marketing factors
• -1 Location
• -2 Location
• -3 Location
• -Wholesale, retail, direct, PYO
• -Demographics and market trends

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Step 3 Choose an enterprise

• Collect lots of information
• Visit with others in the business
• Start small (very small!)
• Know where to get help
• Have fun!

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