Financial Lessons Learned from a Former Beginning Farmer

As a beginning farmer, I made the following mistakes. Had I known how detrimental these decisions would be to future farmer me, I would have done a few things differently.

I wish I would have kept more accurate records of income and expenses. Being more specific in my record keeping may have taken more time, however, I would have all the information at my fingertips to make more informed business decisions. For example, one of the suppliers sent (and still sends) monthly invoices that lump all expenses together in one bill. It is not broken out into fertilizer, pesticides, application time/labor, or past accrued interest; it's all just lumped together. If I had taken the time to better understand the invoices, and asked our salesmen for more accurate information so I could keep timely, accurate records, I would have had the knowledge to shop for comparative products or make smaller, more frequent payments when cash flow allowed to spend less of our hard-earned cash on year-end accrued interest.

I wish I had made time to keep up on my financial record keeping and data entry. This is honestly my least favorite part of farming, and I think that's a sentiment shared by many farmers. Farmers want to be working on the farm, not working at a desk. However, successful farmers find time to do both.

While I wish I would have done a few things better, there are a few things I did well that I would encourage other beginning farmers to do as well.

• I networked and learned from other beginning farmers through local agriculture groups and courses. Through these experiences I learned about where the farm could rent equipment, other suppliers to consider, how changes in other farms affected their bottom lines, and other lessons.
• I filed receipts and invoices in one place when they came in. Was it pretty? Certainly not. However, everything was in one place when I was ready to do the bookkeeping.
• I kept the checkbook balanced. I always knew how much cash we had on hand for planned—and unanticipated—expenses.
• I was conservative in spending and investing on the farm. I considered how any expenses would affect the farm short and long term, and I chose not to take on more debt than I knew the farm could comfortably afford.

If you'd like to learn from my mistakes, and set your farm up for better record-keeping and decision-making with financial statements as you build your farm business, consider attending a Farm Sense course.