Whether you succeed or fail will depend on how much you planned ahead
Before getting into any business, you need to sit down and come up with a good business plan. A lot of folks just jump in headfirst and hope for the best and when the majority fails, they wonder why. Don’t be one of them. FarmLink puts out a good farm business plan that helps refine your goals and it’s an easy step-by-step PDF that you can download and print out. I highly recommend this.
Why do I need a business plan? Because it forces you to really look at what you want to do and requires you to hone it down further and further to better understand if it is attenable. Like with any business, you want to keep the costs down and profits high enough to pay the bills and gain your equity in land, buildings, and animals. Your average beef producer does it on the side and still works a regular job as well. You don’t make any money until that beef is ready to sell.
Decide what cattle and equipment you will need and decide on how much money is available for each. Be flexible! Instead of buying 10 cows ready to breed, cut that down to 10 small heifers and raise them to breeding size. Same with the bull. Instead of going out and buying a bunch of equipment to do haying, look at buying that hay from a local farmer that already has made that investment. This also saves you money on equipment breakdowns. Yes… equipment does and will break down and it can become costly really quick in the cost of parts and the loss in hay because the rain came before you could get it baled.
Bigger is not always better. Yes, the larger the operations the easier it is to spread the costs overall. Remember, you don’t get paid until your product is sold. If you have animals, you are going to lose some each year. It’s all a part of nature and is sometimes hard on you more mentally than financially. With our herd, each cow has a name. When a calf is born, they get a name and you will get attached to them. We all know at some point and time they will become old enough to butcher and that’s part of being a farmer.
Keep close track of the small costs because they can add up in a hurry. You have to look at the ROI ( return on your investment). Most of the larger investments will gain equity every year as you pay them off. Property, equipment, and your initial herd. Every year, if done correctly, will give you 10 calves from the initial herd. It is a 50/50 chance it will be a heifer or bull calve. Now if you raise the 5 heifers up to breeding size, you have given yourself a 50% increase to the size of your herd.
I have a friend that started with 50 Angus cows and 3 bulls. In less than 10 years, he has now increased his herd to 300 mama cows and 8 bulls, getting close to 300 baby calves a year. He has created a full-time farming job. He sells his feeders each year which gives him an income stream of over $180,000. He round bales all his hay into balayage using a continuous wrapper. He keeps his costs to a minimum. He does not have a bunch of fancy new equipment. He has 2 tractors, a round baler, a round bale trailer, a continuous bale wrapper, a skid steer to clean free stalls, and a cattle trailer to haul his animals to market. He does not feed any grain but does use molasses licks with minerals, worming medicine, and fly retardant. Best of all, he does it all himself with no outside labor costs.
It can be done if you are committed and have reasonable goals already set in place. This comes back to sitting down and doing a business plan. It forces you to really have to think about what you are about to do. Already farming with no business plan? It can really help you as well. Keep it flexible and look for places to save money. Remember, becoming a farmer is a lifestyle change. Farmers are not afraid of a little hard work and are very independent SOB’s lol
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