When you are running a farm, protecting your bottom line is critical. Margins can be so tight, and all it takes is for an unforeseen event to damage a few crops, and your entire session could be ruined. It is critical, then, to ensure you are doing all the right things and none of the bad. Here are some simple reasons why your farm might be losing money right now.
Your family living expenses are too high
Farming is a lifestyle choice, as everyone knows. And this can cause a few problems. One good season can provide a nice boost to the family income. But it can also encourage extraordinary spending habits. It is vital that you spend wisely, and keep your family living expenses at a suitable rate. Farming is not easy, and at times it can feel like there is no reward. But with a plan for the long-term, your family will get there eventually. And, more importantly, you will avoid any potentially nasty financial situations if they spring up.
You aren’t selling to local businesses
Is your farm taking advantage of all the opportunities that present themselves in your locale? If not, why not? Selling to local businesses will reduce your transport costs by a significant amount. You can also consider setting up a small farm shop and offering produce to local residents. A lot of people will be prepared to travel if you offer great value and high quality.
You don’t maintain your equipment or farm
Regular maintenance is critical if you want to keep a productive farm. Every time something breaks down or uses too much fuel, it adds to your cost of sale. It’s a variable expense, which can cause a lot of trouble. Regular maintenance, however, is a fixed cost, which you can plan for. Even little things like keeping your equipment and buildings looking good can help save you money. For example, the likes of Paints4Trade offer a range of plant paint that you can use to prevent rusting and protect against weather damage.
You aren’t investing in alternative energy
Regular readers of our blog will know how keen we are on alternative energy. We think everyone should be exploring this avenue for many reasons, including the environmental issue. But even if you are a climate change denier, there is no denying the impact alternative energy can have on your bottom line. Take companies like British Solar Renewables, for example. These businesses provide complete systems that can not just save you money on energy bills, but also provide a stable income. In times of poor crops, it is fantastic protection for your loss of revenue.
You don’t test your soil
Finally, make sure you are testing your soil. It doesn’t matter whether you are rearing livestock or planting crops - soil can make a big difference. You just cannot tell whether your soil will be productive without testing. So, get out of the old bad habits of testing every five or ten years and take it more seriously. You will save yourself a lot of money - and time.
