Progress report for WPDP23-010
Project Information
California’s farms and ranches face unique challenges as small business entrepreneurs, especially disadvantaged farmers who experience factors such as:
- Vulnerability to environmental risks, market volatility, and under-capitalization
- Regulatory and and product liability risks
- Playing a critical role in community food security
- Specialized operational issues including: understanding methods and costs related to the production of crops and livestock and the seasonality of fisheries; ability to assess marketing plans including packing, cooling, shipping, estimated prices and volume and inventory vulnerability (such as to power outages); utilizing agricultural liens including special federal liens for perishable agricultural commodities; managing risk on low-collateral loans, assessing unique risks related to environmental, labeling, food safety and labor regulations.
CAMEO and FarmLink are partnering to train the next generation of farm service providers and educators to specifically address these topics. Participants will hear from experienced small farm business development professionals on what to expect when advising a small farm business. They will also receive FarmLink’s “Resilience Self Assessment,” a comprehensive tool to assess the business health of small farm enterprises, covering a suite of farm business topics, from business entity structure and securing land tenure to credit management and compliance with environmental regulations. Service providers will learn the “ins and outs” of providing specialized assistance to small farms and upon completion of the course will be able to use the RSA in their advising work.
Our target audience is professionals that serve, or would like to serve, small and sustainable farm and ranch businesses, and are motivated to provide more strategic guidance to their agriculture clients.
The overall goal of this project is to increase the capacity among small business advising organizations (i.e. Small Business Development Centers, Community Development Corporations, community-based NGOs, extension educators) to effectively serve sustainable farm and ranch businesses. Through a partnership with the CAMEO network of small business advisors, FarmLink will support a growing ecosystem of at least 50 small business service providers, enhancing their knowledge and skills to address specific issues critical to small, sustainable farm business management. This project will also strengthen a new partnership with CAMEO (established through the current Western SARE project) for future engagement including further training opportunities made exclusively to course participants, as well as future opportunities to serve FarmLink’s clientele through its business education, capital and land access programs.
Participants will increase knowledge of the unique risk profile of small, sustainable farm and ranch businesses, and how to identify issues that might threaten the farm’s ability to operate. The proposed program will also increase participants knowledge on a comprehensive suite of topics paramount to small, sustainable farm and ranch business success. At the end of the project, participants will incorporate new tools to approach these topics when working alongside small farm owners and operators.
Through group co-hort trainings and follow-on support from FarmLink, participants will learn how to apply FarmLink’s Farm Business “Resilience Self Assessment” (RSA) tool as a comprehensive diagnostic and guided approach to small business technical assistance and counseling with farm business clients. Through the RSA tool and associated group curriculum, participants will gain insight on how to assess a farmer’s baseline business skills and practices, and find a supportive community to address and prioritize which business skills and practices farm clients should have in place.
TIMELINE (please note the cycle will repeat in the same timeframe in 2023 and 2024, which encompasses the project timeframe):
- Project Period: June 1, 2023 - December 31, 2024
- Planning Period: June 1-June 27
-
- Participants: FarmLink and CAMEO- Recap feedback from 2022 cohort and adjust/add material based on input from participants
- Recruitment: June 1 - 30
-
- Participants: CAMEO
-
- Expected Outcomes: Marketing, recruiting, and networking to garner interest and gather participants to apply for the cohort.
- Info Session: June 28
-
- Participants: FarmLink, CAMEO, and prospective participants
-
- Expected Outcomes: Information sharing to prospective cohort participants including expectations, goals, learning targets, resources.
- Application Review: July 1 - 31
-
- Participants: FarmLink, CAMEO
-
- Expected Outcomes: Ensuring participants are appropriately vetted and will benefit from the project
- Participant Notification: August 1 - 31
-
- Participants: CAMEO
-
- Expected Outcomes: Finalization of participant cohort, and confirmation of participation
- Classes: September 26 - November 14, Tuesdays 12-2PM
-
- Participants: CAMEO, FarmLink, Project Cohort Participants
-
- Expected Outcomes: To fulfill objectives outlined in the project proposal.
Cooperators
- (Educator)
Education
Participants will increase knowledge of the unique risk profile of small, sustainable farm and ranch businesses, and how to identify issues that might threaten the farm’s ability to operate. The proposed program will also increase participants knowledge on a comprehensive suite of topics paramount to small, sustainable farm and ranch business success. At the end of the project, participants will incorporate new tools to approach these topics when working alongside small farm owners and operators. Through group co-hort trainings and follow-on support from FarmLink, participants will learn how to apply FarmLink’s Farm Business “Resilience Self Assessment” (RSA) tool as a comprehensive diagnostic and guided approach to small business technical assistance and counseling with farm business clients. Through the RSA tool and associated group curriculum, participants will gain insight on how to assess a farmer’s baseline business skills and practices, and find a supportive community to address and prioritize which business skills and practices farm clients should have in place.
Education & Outreach Initiatives
Participants are exposed to different entity structures commonly seen with small-to-medium farms.
People, Resources and Activities - A Framework for Structuring a Farming, Ranching or Fishing Business.
- Business model and business structure
- Evaluating ownership
- Evaluating land tenure
- Evaluating activities
- Profit motive
- Start-up versus functioning
Participants understand how to communicate with their clients about their records and what questions to ask.
Participants are introduced to an accounting framework for understanding liquidity and building wealth and setting up or cleaning up bookkeeping systems.
- Types of Accounting
- Evaluating the Balance Sheet
- Evaluating the Bookkeeping Set Up
- Discussion & Q&A
Participants learn how to support farmers, ranchers, and fishers in filing their taxes and/or finding the right tax preparation professionals.
Assets
- Sources
- Re-creating an Asset List
- General Ledger + Detailed List
- Income Tax Return
- County Business Property Tax Return
- Discussion & Q&A
Taxes
- Evaluating a Tax Return
- Taxable Income
- Tax Formula for an Individual
- When should a new business file?
Participants learn how to communicate with clients about their cash flow needs, and examples of common scenarios.
Cash inflows
- From Operations = changes cash and income statement income
- From Borrowing = changes cash and balance sheet liability
- From Owner Contributions = changes cash and balance sheet equity
Cash Outflows
- For Operations = changes cash and income statement expense
- For Asset Acquisition = changes cash and balance sheet asset
- To Pay Debt = changes cash and balance sheet liability
- Owner Draws = changes cash and balance sheet equity
Participants learn about labor issues on small farms and different risk mitigation strategies.
- Labor
- Labeling
- Food Safety
- Zoning
- Environmental Regulations
An introduction to ways to think about profitability and wealth creation.
Annual Profitability
- Cash increase(decrease) does not measure profitability
- Net profit (loss) does not measure long term wealth creation
- Gross margin and net margin are measures of profitability
- Gross margin helps you determine if you can scale
- Cost of production and cost to harvest and pack
Wealth creation
- Business wealth vs. personal wealth
- Losing money while increasing wealth
- Return on investments and return on assets
- Labor efficiency vs. asset efficiency
- Credit: How much is “enough”?
Educational & Outreach Activities
Participation Summary:
Learning Outcomes
Project Outcomes
FarmLink convened a cohort of 38 service providers and professionals to learn how to best support farming and fishing entrepreneurs across business management topics. They learned how to address common questions and what questions to ask in order to dig deeper into a client’s unique situation. This six-part series addressed business structures, accounting & bookkeeping, taxation, cash flow management, labor & insurance, and environmental regulation. Participants not only enhanced their knowledge but learned the limits of their expertise and when it is best to call in a professional to address specific issues. 25 out of 27 survey respondents reported knowledge gain and 100 percent of respondents will be able to apply what they learned within the next year. 26 out of 27 respondents plan to participate in ongoing professional development related to this course.
Through facilitating this convening a second year we have gained insight that there is a need to continue to facilitate professional development spaces like this in order to find more business service providers who are willing to learn about and work with agricultural businesses. This space also serves as a good way to meet those service providers and build working relationships that ultimately serve farmer’s needs. There is an opportunity to do research on the correlation between farm size (by product, scale and/or sales) and their perceptions on being able to afford working with service providers that ultimately makes their businesses more viable.