I think it’s fair to say that most of the success factors in market farming can be described in a bell curve. As the bell curve implies, most of us have okay access to markets, and we farm ground that’s okay for market farming. We have okay business acumen, okay marketing skills, okay land-access arrangements. Our available labor is largely okay, we have okay innate organizational skills, and okay willpower to get out there and get the right work done on the right day.

Most of our models in farming, however, have something more than okay: they’ve got several factors located far out to the right on the bell curve. They’re located close to concentrations of wealth and enthusiasm for social righteousness and good food. They got into the market at just the right time. They inherited land or bought it on the cheap. They acquired business acumen in another line of work. They discovered what they wanted to do early in life and had a few dominoes tip in just the right way. They’ve inherited or developed the traits that help them stay organized, intuit what needs to be done, and relate well to people.

That’s not to say that our models don’t work hard, develop new skills, enhance value, innovate, and do a thousand other things right day in and day out. If you’re going to succeed in this business – any business! – you’ve got to do a lot more than get lucky. And “getting lucky” is almost always a function of hard work and smarts in addition to having life’s dice roll your way. “Making it” in market farming, especially over the long haul, is never handed to you on a silver platter. (If it is, I haven’t seen an example.)

But it does mean that many of our models in farming can get away with things that those of us without a stack of lucky breaks at our backs can’t. They can get away without a monthly cash-flow budget, or filling out financial statements, or getting a line of credit at the bank. They don’t need to understand financing because they don’t have to incur debt in order to reach their goals. They don’t require a system for employee management because it just comes naturally to them.

The rest of us need to stack the deck – and the best way to stack the deck is to increase the intentionality that we bring to the management of the farm. And that means increasing our use of the plan-monitor-control cycle.

And if there’s one area that drives everything else when it comes to management, it’s money. Because money is the bottom-line expression of value and ability to continue farming in our world. That’s not to say that money has to guide everything you do, but money provides the foundation that allows every other expression of our values to be present in the world. It allows us to farm another year.

And this time of year – right now, as a matter of fact! – is the best time to put together the three key tools you need to monitor your farm’s financial performance: a balance sheet, an accrual-adjusted income statement, and a statement of cash flows. As we move towards the start of the new year, it’s the perfect time to take inventories of our supplies, and set aside an hour on New Year’s Eve to check balances on our bank accounts, accounts receivable and payable, loans, and credit cards.

These three tools, conventional as they are, can provide insights into your farming operation, especially when compiled year after year, when plugged into various farm financial ratios, as described in resources such as this Farm Financial Scorecard. Tracking these year after year can provide not only important measurements of your farm’s performance, they can also help diagnose problems and provide an early warning of negative trends in your business.

(Please see the October and November issues of Growing for Market – available here if you don’t subscribe already – for my articles on assembling financial statements, as well as the book, Fearless Farm Finances, which I coauthored.)

Systems under stress degrade. Systems under more stress degrade faster. Degraded systems work less efficiently and are a lot less fun to be a part of.
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Stress happens when systems operate beyond their normal capacity. The further beyond their capacity they operate, and the longer they operate there, the more stress is created on the system, and the less efficiently it functions.

On the freeway, traffic flows smoothly when there are less cars on the road. Add more cars, and the traffic flows less freely, although it still flows. However, there comes a tipping point where traffic starts to slow down for absolutely no reason. Normal function simply starts to break down when the system is pushed beyond what it can normally handle.

And worse, when some small thing does go wrong - when somebody has a fender bender and pulls to the side of the road - everything grinds to a dead halt.

We can reduce stress by increasing capacity or reducing pressure. On the freeway, that means building more lanes or reducing the number of cars. Either way, stress is reduced because the number of cars per unit of road goes down.

On the farm, keep in mind:

1. The cost of reducing stress is almost always less than the cost of the consequences of stress.
2. Planning is the best way to increase capacity at the lowest cost. Knowing what needs to be done on a daily, weekly, monthly, and yearly basis gives you the tools you need to deal with the variations that otherwise cause everything to blow up.
3. You almost always have to reduce pressure to increase capacity. On the freeway, you close lanes to build more lanes. In organic farming, you might grow cover crops to increase output in future years, or dedicate land to  hedgerows to provide habitat for beneficial insects and other creatures.
4. Filling things to capacity creates congestion. If you expand your acreage and immediately fill every square foot with crops, you haven’t changed the relationship between capacity and pressure - you’ve just put more cars on a bigger freeway.
5. Increased capacity - whether it’s soil fertility, staffing, irrigation, or cooler space - increases your ability to achieve high throughput without having to worry about the details.
6. You have to counteract stress. One car driving over the same freeway for enough time will eventually create the need for road repairs. You have to plan for time to reorganize, rebuild, and refresh, whether that’s in your shop, your crop rotation, or your family life.

I like farming toys as much as the next farmer, and when you ask me, “What should my next investment be for my farm?” I’m as tempted as anybody to provide a listing of various configurations of metal and grease that, if properly applied, would be the perfect tool to address the situation.

But more often than not, I’d be wrong.

​More often than not, you’d be better off investing your time and energy into…

Improving the information you have about your farm - How much does it cost you to grow a pound of carrots? What are your fixed costs per acre of field production? How long does it take your crew - average, high, and low - to harvest a hundred bunches of kale? What’s your average per-acre (or per-square foot) yield on carrots? What’s your current ratio, and how does that compare to last year? How much did you spend to grow the vegetables that went into your CSA share?

Improving the information you have about your craft - What don’t you know about growing vegetables, feeding chickens, or raising cows? If you don’t know the basics of your craft, figure out where you can go to learn it - and keep in mind that this might not be your normal round of conferences! State and regional producer associations often have workshops about improving the fundamentals by people who are focused on fundamentals over philosophy. Take a class. Attend field days.

Creating systems - You already have ways that you get things done. What can you do to make them better? If there are places where things consistently go wrong, spend time digging in there and figuring out what you need to make things right - more often than not, it’s going to be a minor investment or a change in procedures.

Cleaning and clarifying workspaces - It’s such a small thing, but working with even slightly chaotic workspaces and storage areas takes a huge toll on productivity and worker perspective. Clean, bright work areas with obvious storage spaces for tools can ease workloads - and perceived workloads - tremendously. If you’ve ever had a worker spend two hours during a rare dry spell looking for the right piece of metal to make the transplanter work (that was me), or torn your hair out with frustration while a crew tried to find a harvest knife for the last worker, you’ve seen the incredible toll this can take on a farm’s bottom line.

Close open loops - Farms tend to be filled with almost-finished projects. Wrap them up and get rid of the extra parts, drop them off the to-do list, and get them out of your head. You’ll free up mental energy to focus on the work that makes a difference, and the physical space that keeps your workers (and you) from having to work around, under, and over that undone thing and the junk that’s hanging around to get it done.

What can you do with the time you would have spent researching new toys? What if you spent the money you were going to spend on something new on refining what you’ve got?

Order begets order. And, sadly, order takes energy to maintain, because without energy, things tend towards chaos.

And chaos, wherever it exists - in the field, in the shop, in the office - can be overwhelming. You can't get on top of everything all at once, so you don't get on top of anything. And because the chaos surrounds any small bit of order you do carve out... well, chaos is always nipping at order's edges, and small bits of order have more edges than large bits of order, and things tend to fall apart.

Unfortunately, chaos doesn't just exist without energy. It sucks energy out of the everything that has to interact with it. Weedy fields take more energy to harvest, more water to irrigate, and more inputs to fertilize. Chaotic shops make it hard to find tools when you need them, to maintain equipment so that it doesn't break down, and to fix stuff quickly when it breaks. Disorganized papers and messy desks make it hard to access needed information and track important commitments (like bills).

And they all create resistance. Clean, orderly spaces and systems invite us in and invite others to participate; messy spaces do just the opposite.

My recipe for dealing with chaos? Carve out some order. Get one space, however small, that feels good - that invites you to participate - and ignore the rest for the moment. Weedy fields? Get one bed cleaned up, really well, and commit to keeping it clean. Chaotic shop? Clear off one workbench. Throw the tools and hardware spread across it into a bucket - it's no worse then having them spread across the workbench. Disorganized office? Clear out one file drawer (put it all in a box, if you have to), buy some file folders, and start using them. Get a little success. Let it feel good. And work your way out from there.

My first real farming job was at a farm on the outskirts of Santa Barbara. We would wake up early every Wednesday and load the pickup truck in the dark before heading south to a farmers market in Santa Monica. Just the thought of driving the overloaded little truck through L.A. rush hour traffic added a nice touch of stress to the morning.

My first week on the job, we arrived at market and began to set up a rather elaborate stand that included an overhead structure to hold long, gorgeous garlic braids (this was back when garlic braids were still new and kind of unusual). The structure had to be nailed together, and, unfortunately, we didn’t have a hammer.

The farmer sent me off to find one. One vendor finally directed me to an old Japanese farmer: “He’s always got his tools.” I got the hammer, we put up the stand, and the market was a success. And I came to two important conclusions:

1. When I got my own farm, I intended to be the guy with the tools, if only to help the poor kid who got told to go find a hammer on insufficient coffee; and
2. We had to do something to make certain we had what needed at farmers market.

I went home that night and put together a checklist to make certain we would never again get to farmers market without everything we needed to have a successful market. I’ve been a big fan of checklists ever since. We used them on our farm for deliveries, farmers markets, washing and packing workflow, opening and closing the packing house, and hooking up implements to the three-point hitch.

Here are a few tips adapted from The Checklist Manifesto for creating a great checklist:

1. Make them precise.
2. They should be efficient, to the point, and easy to use even in the most difficult situations (hung-over, tired, or emotionally stressed).
3. Do not try to spell out everything. (again, brevity is important).
4. Provide reminders of only the most critical and important steps – the ones that even highly skilled professionals using them could miss.
5. Above all, make sure they are practical.

(The Checklist Manifesto is a great read, and even a pretty engaging audio-book!)

The office has always been an important part of my farm. Unfortunately, the farm’s office work often takes a back seat until the sun has set and the kids are fed. Too often, that back seat also means that we don’t take the time to make our office a more efficient, smooth-running part of our operation.

Here in northeast Iowa, we still have some snow on the ground. Before things get too crazy with spring planting, it’s a great time to look into some key time-saving performance upgrades.

Monthly Filing for Financials.  Stop filing your paper financial documents by vendor, account, or anything else. Start filing them by month, instead. After you’ve processed a receipt or a bill into your accounting program, just put it in a file labeled, “March, 2014.” If you find you need to refer to it later, you’ll be able to look up the transaction in QuickBooks, and cross-reference it to the correct month; finding the occasional receipt this way will take far less time than filing every receipt in its own alphabetical system.

Get a Headset.  Market farming is all about communication. If you have to kink your neck or use a hand to talk, you can’t take care of other things at the same time. You can’t type notes on the computer, you can’t enter orders or take messages quickly, you can’t water the plants while you’re waiting on hold.

In any case, you’re a farmer, and you don’t need a kinked neck leading to yet more chiropractor bills.

Learn Some Keyboard Shortcuts.  Every vegetable farmer knows that time spent moving your hands is time spent not working. When you have to move your hand from your keyboard to your mouse, that takes time; and then you have to move it back. Every program has keyboard shortcuts, and most of them are the same across every program on your operating system. Learn them. They take a little more time than mousing when you are first getting used to them, but a few sessions spent intentionally not using your mouse will pay huge dividends.

A few of my favorites:

• Ctrl + x = cut
• Ctrl + c = copy
• Ctrl + v = paste
• Ctrl + n = new
• Ctrl + s = save
• Ctrl + a = select all text
• Ctrl + z = undo most recent action
• Home takes you to the beginning of the current line of text
• Ctrl + Home takes you to the beginning of the document
• Shift + Home highlights the text between your cursor and the beginning of the current line of text
• Ctrl + shift + home highlights the text between your cursor and the beginning of the document
• End works the same way, except that it takes you to the end of the line of text
• Alt + Tab toggles between open windows
• Ctrl + Tab toggles between tabs in your browser, or multiple windows in a program

By the way, most forms, whether in a database, in a spreadsheet, or on a website, can be navigated easily using the tab key to advance between fields. Type your first name, hit tab, and it takes you right where you want to enter your last name. Tab again to get to the address field. Shift tab takes you back to the previous field.

Browser-based apps usually have their own shortcuts. I use Gmail to manage my email, and the keyboard shortcuts (see this link) allow me to manage my entire inbox from start to finish without ever touching my mouse.

Besides, if I don’t touch my mouse, I can’t click on the bookmark for Facebook.

Supercharge Your Keyboard Shortcuts.  I have used a fantastic little program called ActiveWords since 2007 to do all kinds of things with just a few keystrokes. For example, if I type frwx, that immediately expands to “Flying Rutabaga Works”. Rsfx expands to Rock Spring Farm. Typing cellx expands to my phone number. Datex expands to today’s date in my preferred date format. Fsig expands to my business email signature; listx expands to the signature I use for list serves.

I find it especially handy to use ActiveWords for hard-to-type words, such as post-harvest handling or E. coli 0157:H7.

You can use ActiveWords to substitute text, insert formatted text, open websites, open programs, open files, open folders, and open control panels from anywhere you can enter text. Most of what you do on your computer you do over and over and over again; why not automate that, rather than clicking through multiple windows?

Over the years, I have used ActiveWords to facilitate answering emails (csafull could expand to the standard statement you use to explain that your CSA is full), make data entry consistent, share data that I can’t remember (whslx expands to the url for Rock Spring Farm’s wholesale sheet, http://www.rsfarm.com/WholesaleSheet.pdf; tfrlink (short for The Flying Rutabaga link) expands to the link to sign up for this newsletter), and input a formula in a downloaded payroll report.

Manage Your Passwords. Do you have time to deal with hacked accounts in August? Neither do I. Get LastPass to manage unique, high-security passwords for all of your accounts. LastPass uses a master password to bring all of your other passwords under one roof; an extension in your browser and an app on your phone make it easy to access and recall usernames and passwords for individual websites. I won’t pretend to understand the technology behind it, but I’ve seen enough referrals from people who do to go with it.

The LastPass browser extension also provides form filling; unlike the form-fillers that already live in your Chrome or Firefox browser, you trigger the form to fill. You can even use LastPass to store credit card information so that you can fill payment information quickly and easily, without having to let web stores store your information.

There comes a point in the growth of any business where working harder doesn't get you significantly more results.

When you start out as a farmer (or any entrepeneur) on a few acres or with a few hundred chickens, you can rely on hard work to get you by. The tractor breaks? I'll use the rototiller. The beans are weedy? I'll just take longer to pick them. Behind on the bookkeeping? I'll stay up late and get it done.

Unfortunately, this works. It works so well that a lot of farmers work themselves right into a successful operation based primarily on their ability - and sometimes the ability of a loyal crew - to just work harder. For a farm where a significant portion of the labor comes from the farmer, increasing the number of hours you work, or ramping up the intensity, makes a big difference. You plant more acres, pack more boxes, sell more at farmers market, piecing together equipment, working late, and figuring it all out until suddenly it stops working.

On a few acres, labor-saving implements just save labor: if you miss a timely weeding because the hydraulics go out on your cultivating tractor, you can put a couple of enthusiastic workers out on hoes for a day or two and clean up a lot of weeds. On twenty acres, not so much. And at some point, depending on your location, coming up with more people on short notice simply becomes impossible.

And on a farm with ten full-time employees, adding another day to the farmer's workload just doesn't make much of a difference in the overall output of the farm.

I've heard beginning farmers say, "We're so small that efficiency doesn't matter." But that's completely backwards. When you're small is the time to figure out how to make the most of your time, to set up the patterns of work that make certain the tractor has been maintained so it isn't going to break, to document procedures and communicate expectations so that you can attend to urgencies and emergencies while knowing that the work is proceeding and proceeding well, to put systems and processes in place that are transparent and linear.

If you don't do it when you're small, you'll have to do it when you're big (and if you aren't going to get bigger, this still applies - working harder is a lot easier at 30 than it is at 40!). And it's a lot easier to do it up front.

When Jack Hedin called me last summer to ask if I would take a look at some transplant production issues Featherstone Farm was having in their greenhouses, I had no idea or expectation that, one year later, Featherstone Farm would occupy such a large part of my time and attention. It’s been a great year, with many exciting and engaging challenges.

In over twenty years of working on and with organic vegetable farms around the country, including thirteen years of farming on my farm, I’ve noticed that most farms and their farmers just plow ahead, making decision after decision on what action to take next to keep the irrigation pumps running, the harvest crews picking, and the tractors in motion without consideration for larger impacts or processes. The race against the weather and the perishable nature of vegetable crops combine with scarce time and monetary resources to create a situation where farmers never get a chance to stand back and evaluate their operations, much less the time to make systematic and systemic changes to build the foundation for future improvements.

It reminds me a bit of parenting.

We put a lot of effort last winter into a rewritten business plan and refinancing. But just as importantly, we worked hard to put processes in place for the financial management of the business on an ongoing basis. Featherstone  Farm now has not only a financial plan, it has a system in place for the periodic and timely monitoring of performance to that plan, as well as mechanisms for making corrections and replanning as necessary. Each month, the leadership team meets to review the farm’s income and expenditures relative to the plan – then, where things are not going right, we figure out how to correct them and assign responsibility for following through.

Weekly meetings of the leadership team provide an opportunity to check in and get everybody on the same page about progress made on addressing those financial issues, as well as other issues on the farm. The CSA team meets on a schedule to decide what’s going in the box and what’s going in the newsletter. And every Friday morning, the entire crew has a short stand-up meeting to make certain that everybody’s on the same page about the little and big things that keep the farm running smoothly, from rolling the windows up on the farm trucks and holiday work schedules to the process for reporting accidents and injuries and the importance of communication and teamwork to the farm’s success.

Farming is governed by rhythms and interruptions. We plant, cultivate, and harvest in cycles and patterns big and small, seeding onions in at the end of winter, harvesting lettuce in the cool of the morning. We weather floods and droughts, scramble to solve personnel crises, and shuffle the resources we need to get a critical piece of equipment repaired while the rest of the farm keeps running. And while weekly staff meetings and monthly financial reviews may be a part of many businesses, these larger patterns – independent of nature’s cycles, and recognizing the interface of agriculture with the larger culture of individuals, finance, and governance – occur all-too-rarely in the world of organic and local farming operations. To have the opportunity to join Featherstone Farm’s efforts to harness these processes to further the farm’s goals of making a difference in the world is truly an honor.

Here's the original guest post on Featherstone Farm's blog.