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Scale


Wendell Berry believes that farms should be of a size that one family can care for the land, the crops and the animals it includes. On Sunday, we met the Mentz family in Sheridan. They raise dairy sheep (just a handful of ewes). Earl Mentz said something that seems more profound the more I consider it - he said, "Don't have more sheep than you can handle - that's a different number for different people, but don't have too many sheep."



Scale of operation is an interesting consideration. For us, I've determined that I need to market between 400 and 500 lambs each year to be an economically sustainable operation. This means we need between 300 and 350 ewes. Based on my experience so far, I think I can care for this many sheep by myself or with the help of my family and my interns. I can also build to this number without a huge capital investment.



The challenge in terms of scale is in part related to the time it will take me to market 4-500 lambs (as I've mentioned before). I need to be more efficient in my marketing time, but I also need to sell as many of those lambs as I can directly to the end user. I find that many of my customers want to buy "from the farmer." If the farmer is spending all of his/her time marketing, how does the farming get done?


Scale also relates to our family dynamics. I love my work, but I also need down time. I want work to be fun, and I want my girls to enjoy the times we work together. If the next generation is to take an interest in today's farms, the farms must be profitable and fun.


I hope others will weigh in on this topic!

Comments

  1. Since we were having a discussion about this very topic today while building electrical fence, I thought I would chime in. I agree with Wendell Berry as long as the right number makes you a living that you are satisfied with and affords you the time with family and allows you to meet long term retirement goals. Anything other than that and it is basically an expensive hobby.

    As for your marketing dilemma, from my experience, the "catch 22" scenario of taking time to market a product to the detriment of producing the product that many business owners find themselves in is rarely resolved without bringing in outside help and letting some of the control of your business be shared by partners, employees, family or in your case family and interns.

    The only analogy I have is one of my own business as a wedding videographer years ago. I was mentored by a successful videographer before opening my business and I saw that it was physically and fiscally impossible to video a wedding on the weekends and then edit the wedding during the week and market to new potential brides week in and week out without burning myself out. Not to mention, there were only so many good wedding weekends during the year which limited my ability to make money unless I charged double what the going rate for wedding videos were going for. The only solution my mentor had was to hire a second filming crew for weddings so he could do 2 weddings on one weekend without actually being at the second wedding. This required letting go a lot of control and hiring good people to carry out his vision for his business when he was not around.

    The business of farming seems to be a tricky one in terms of turning a good profit without the use of decent help. One scenario I see for farmers in your situation is to have a partner, family member, intern, friend or basically someone committed to seeing you and your business succeed and making that person(s) as familiar to your customers as you are to them. Once they have established the same level of trust that you have with your customers, you can have that person(s) concentrate on marketing efforts while you handle the farming or vice versa.

    I do not see much of this at the farmers market on Tuesdays. I look for my familiar face at the booth and when I am greeted by a strange face, I always ask for familiarity. For some reason, the answers given to my questions by that new face seem to hold less weight with me. I know they are qualified to be there for the most part but they have not earned my trust yet. It is all perception but it still matters a great deal.

    The bottom line would depend on what each farmer considers making a decent wage when it comes to running the business and this would determine how much to sacrifice. For me, 40k/year might sound good but for someone else anything less than 100k/year would be a failed business.

    Perspective would be the key for me in making this type of decision on how to grow my business.

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  2. As I re-read my comment above, I realized my thoughts were a bit rambling. The only saving grace I have is I am better at talking about these types of subjects than typing about them.

    I very much look forward to reading other people's thoughts about this subject matter. Good topic Dan!

    ReplyDelete
  3. I think you're thoughts on adding help (employees, interns, family, etc.) are on target. I guess the challenge from my perspective is to grow the business to the point where it can pay more than one salary. It's a bit of a catch 22, as you say!

    The other more personal challenge for me is that I enjoy both the production and the marketing parts of farming. Farming for me is a combination of art and science, and the marketing piece is similar to displaying my "art." I wouldn't want to entirely give up either aspect.

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  4. I totally agree with you. I don't think you should give up either aspect. My comment above can be summed up by saying that you eventually need a clone of yourself in the future if $$$ permits. Otherwise, you may continue to fall victim to what most small business owners experience which is the marriage to their business and working 80 hour weeks for a very long time.

    The only other successful model I have seen is an internet based model where you transfer more marketing and selling opportunities to the web. This let's the web do more work for you but in my opinion your type of business thrives on personal connection with your customer... and technology should not replace that.

    It is a tricky game and I look forward to more discussion with you on how to meet your goal.

    ReplyDelete
  5. It is a difficult situation and one that I am sure plagues most small business owners.

    I believe you have to ask yourself what you really want to achieve. If you are satisfied with the business providing enough just to sustain your family in a reasonably comfortable manor it may well be posible to manage your time in an efficient enough way to need minimal help and stay involved in every aspect of the business while still enjoying the process.

    However if the intent is to grow the business to a more profitable level then the economies of scale come into play, and things get more difficult. At this point you will need to ramp up to where you can support staff. Marketing also becomes more important, just because you have 1000 sheep producing lambs, doesn't mean you can sell them all. Additional sales channels will be needed, and you may have to make some tough decisions as to where to and where not to sell.

    The more difficult to manage aspect is the enjoyment factor. If you have a business whose primary goal is to make money, then it becomes a business, and thats it. It can be hard to keep the focus on maximizing profit while still enjoying the process and taking the time to smell the grass. It also becomes more difficult to not cut corners, and I can tell you are a passionate person about doing things in an environmentally friendly as well as sheep friendly way, which is an approach that is not normally the most cost effective. This can often introduce moral dilemas.

    I am not saying its impossible to build your dream while enjoying the process, it just takes careful planning, forethought, dedication and prudent management all of which I believe you posess.

    I really hope for the best for your farm.

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