Making it happen: Profitability and success

2016 Annual Report for ONE15-248

Project Type: Partnership
Funds awarded in 2015: $14,973.00
Projected End Date: 12/31/2017
Region: Northeast
State: Massachusetts
Project Leader:
Julia Grigg
The Carrot Project

Making it happen: Profitability and success

Summary

Making It Happen: Profitability and Success is a training and set of resources designed to help farmers understand and strategically implement a variety of financial management tools in order to increase the financial strength of their operations. The resources include case studies, hands-on activities, and learning aids, such as a financial management calendar and webinar, and learning tips. In early 2016, 89 participants participated in six trainings in Massachusetts, New York, and Vermont. The trainings were hosted by: Glynwood, Stone Barns Center for Food and Agriculture, the Intervale Center, New Entry Sustainable Farming Project, and Community Involved in Sustaining Agriculture (CISA). Participants were assessed on their financial management skills before and after the training. The final part of the project is to evaluate how many participants were able to incorporate what they learned into their farm business in preparation for and during the 2016 season.

Objectives/Performance Targets

This project had two steps to achieve the proposed goals: (1) conduct an in-depth analysis of an existing data set, which was gathered over three years from 30 farms and four technical assistance providers, as well as from additional surveying of service providers, and (2) develop and implement a seminar, and evaluate changes in participants’ understanding and use of financial management practices and decision making.

The first objective is complete. We have analyzed the data set from “Measuring Profitability and Success” (MPS, LNE11-310) and it is described in detail in the Final Report (Northeast SARE LNE11-310). The data set was synthesized, resulting in an understanding of factors and conditions that were important to a farm meeting or moving towards its business goals.

To make this information useful for Making It Happen, the Training Team met with a Work Learning expert, Will Thalheimer of Work Learning Research, to develop a learning development process to complete the second objective: design and implement a seminar series. The learning development process (Attachment A – Learning Development Process) outlined the steps necessary to integrate, successfully and succinctly, the data and experiences from MPS into a curriculum. One of the first steps, that serves as the core of the curriculum, was to develop the “Learning Matrix” (Attachment B – Learning Matrix) that lists common mistakes, common success strategies, specific actions farmers should engage in to be successful, situations in which farmers would take these actions, and the habits that will enable farmers to be consistently successful in these situations.

This document organizes the information into the learning groups: 1) Planning, 2) Due Diligence, and 3) Proactive Management, which was the primary focus of Making It Happen.

Within these learning groups are learning objectives and learning points, which provide further detail on the financial management tools and strategies that are critical to a farmer’s financial viability. The learning groups, objectives, and points all connect and reinforce each other, providing an indication of the financial management tools and strategies to be taught in the seminar series, and what behavioral changes are desired. The matrix was then used to develop:

1) evaluation objectives (how we will measure success in terms of learning and implementation); 2) instructional objectives (what do we want the learner to do and in what situations, which distinguishes between knowledge and performance);

3) development of evaluation instruments (which are important for results verification); and

4) creation of the training.

 

The materials created for the training included:

  • Case Studies: Individual farm analyses that provided real world examples of various learning points (Attachment C – Case Studies)
  • Scenario-Based Questions: Hypothetical scenarios that farmers could use to understand the various situations in which using financial management tools and strategies would be helpful
  • Hands on Activities: To practice using the concepts and skills taught
  • Learning and Instructional Aids:
    • A Financial Management Calendar designed to help participants organize and plan for their financial management activities (Attachment D – Financial Management Calendar Part 1 and 2)
    • A Financial “Toolbox” as an instructional aid, which could be further modified to be used by participants, describing the primary financial management tools used in the training and financial management calendar
    • Learning Tips: To reinforce concepts or answer questions not addressed in the training
  • Evaluation Surveys: Crafted to measure learning achieved during the training, including behavioral changes that may occur within a year after farmers participate in the seminar (Attachment E – Evaluation Surveys).

During the first few months of 2016, the training was offered at six different sites. Participants also received 3 learning tips by email after the training to address unanswered questions or reinforce conversations from the training and 10 received follow on coaching, for 1-2 hours, or longer term business assistance. The latter occurred outside of this grant. We also offered the Financial Management Calendar as a webinar in partnership with the New Entry Sustainable Farming Project. The evaluations from the training showed the following.

  • RELEVANCE OF TRAINING DESIGN TO PURPOSE: A large majority, 87%, expressed confidence in their preparedness because the training provided them with practice on job related tasks, 8% thought the training did not provide sufficient training, but were confident that they could use the skills and tools, and 5% had no confidence in their ability to use the skills or tools after the training.
  • UNDERSTANDING MATERIAL: A majority of participants, 61%, indicated they had a solid or better understanding of the concepts taught, about one-third, or 36%, had a basic familiarity, and 4% had significant blind spots or confusion.
  • MOTIVATION TO ACT: A large majority, 95%, of participants indicated that they would use their financial statements to make decisions in their work. 28% indicated that they would do so every couple of months, 56% monthly, and 11% weekly.
  • READINESS TO USE SKILLS: A majority of participants, 86%, indicated they needed more practice or guidance to do actual job tasks using the tools or to be fully competent. 14% of participants indicated being competent or an expert at using the tools taught.

    The response to question #4 is interesting because when participants were asked about the exercises used in the class to practice skills (#1), a majority were confident that they could use what they learned. When the question was asked differently, to emphasize using the skills on the farm, their readiness dropped.

    In the first quarter of 2017, participants will be asked to complete a survey to understand if they were able to incorporate what they learned into their business practices. We will compare the results from the habits pre-survey to the same questions about 12 months after the training. The results will be included in the final report.  

Accomplishments/Milestones

March–April 2015

  • Start In-depth Analysis of Aggregate Financial Data: Completed
  • Review aggregate data and determine best ways to present it to convey most-meaningful results: Completed
  • Start analysis of aggregate survey information, determine best way to present pre- and post-MPS farmer survey information, and create draft to convey most-meaningful results: Completed

Determining what data from MPS was most helpful was more difficult than originally anticipated. In the end, it was decided that the most meaningful information to collect and track from MPS are changes in net and gross sales, changes in owners’ salary or owners’ draw, number of employees, and progress toward reaching stated business goals. However, this information was only useful if tracked for at least two seasons, as yearly fluctuations were too great to understand general trends after only one year. The latter was probably true due to the early stages of the businesses and the changes made from year to year in the business.  If MIH is continued, and combined with 1:1 assistance, or other support, and offered over at least two seasons, collecting this type of information would become more useful.

  • Develop seminar outline, goals, and objectives: Completed
  • Identify (using MPS information) of five farms, facing representative situations, to develop into case studies: Completed
  • Outline resources necessary to support learnings for each case study: Completed

May–June 2015

  • Training Team receives instruction on seminar design: Completed
  • Gather reflections from MPS service providers on what worked, when, and why: Completed
  • Design and implement a survey to elicit feedback from service providers, not on what happened (already recorded), but on what factors led to specific results: Completed
  • Draft memo describing results, for later incorporation into overall analysis: Completed
  • Document learnings, insights, and highlights in Initial Report from the different activities, described above, in March–April: Completed

July 2015

  • Integrate information from MPS and In-Depth Aggregate Analysis: Completed
  • Plan for integration into seminar, based on seminar outline, by Training Team: Completed
  • Review and modify materials, as needed: Completed, but was on-going

August–October 2015

  • Develop five case studies to address key questions: Completed 8 case studies
  • Identify five farms for development into case studies: Completed
  • Create rubric for case studies and gather input from Training Team: Completed
  • Complete in-depth analysis of five farms: Completed
  • Draft case studies: Completed
  • Develop resources to support case studies: Completed
  • With collaborators, decide which financial management tool(s) to focus on (e.g., “Why Do Enterprise Planning”): Completed
  • Develop relevant training modules: Completed
  • Conduct review by Farm Advisors and Training Team: Completed

October–November 2015

  • Review resources to support case studies: Completed
  • Finalize case studies by making language and layout more reader-friendly: Completed
  • Finalize resources to support case studies: Completed

The support materials for instructors, explaining the purpose and use of the materials is complete, but rudimentary.  There were inadequate resources to make the instructional guides useful for new instructors without additional work.

November–December 2015

  • Develop detailed seminar agenda and learning aids such as slides, instructor guidelines, etc.: Completed
  • Publicize Making It Happen with collaborating organizations: Completed

January–March 2016

  • Publicize and continue registration: Completed
  • Deliver five seminars, including pre- and post-evaluations: Completed six seminars

After a first pilot seminar, the Making It Happen materials were reviewed and modified to reflect feedback. One lesson learned is that a training is never really complete. After each instruction session, based on feedback from participants and instructors, there were continual improvements to the materials and the lessons.

July 2016

  • Produce webinar in collaboration with New Entry Sustainable Farming Project: Completed in April 2016

December 2016

  • Solicit final evaluations on use of financial management tools and changes in financial decision making: Incomplete

Anticipate sending out in January 2017 and following up multiple times by email and to some by phone in February.

January 2017

  • The Project Director, in coordination with the Training Team and Farm Advisors, will draft the final report: Incomplete

This will occur in March and April 2016.

Impacts and Contributions/Outcomes

The proposal stated that Making It Happen will: (1) determine what financial management tools are most effective under what circumstances and at which stage(s) of business development; (2) pinpoint when and how such tools are most readily integrated into a farm’s operation; and (3) develop a seminar — within the context of ongoing education, required prerequisites, and follow-up support — to contribute to improved financial management and decision making on 50–75 farms. The following describes the anticipated impacts of the project.

Determine what financial management tools are most effective under what circumstances and at which stage(s) of business development

 The analysis of the MPS data showed that the most important financial management tools are those that allow farmers to answer questions such as: Is this the right price? Is a capital investment worth it? Should I add a new product line to my business? And Can I pay my bills?, i.e. using scenario planning and sensitivity analysis, competitive analysis, enterprise budgeting, and cash flow budgeting. However, the findings also showed that these skills were most useful when realistic and well-vetted business planning had occurred and financial tracking systems were in place and used regularly. In practice, this meant that many farmers in their first few years of business were not ready to use financial management tools, if they were still refining their business models or setting up or learning to use financial tracking systems. This would imply that MIH is most useful for farms that have already met these conditions.

Pinpoint when and how such tools are most readily integrated into a farm’s operation

The question of “when” is addressed above. While the study is incomplete, we can anticipate how such tools are readily integrated into a farm’s operation.  It is likely that tools are most readily integrated into a farm’s operation with either more training time to practice the new skills, including practicing with ones’ own financials, and/or 1:1 business assistance, as occurred for participants in MPS.

The Financial Management Calendar resource and webinar was one way to extend the training.  It was designed in response to questions from participants about how to implement what they learned. It was pulled together at the end of the training period, in April, and its lessons will be better integrated into any future seminars.

Ten MIH participants received follow up coaching and 1:1 business assistance, some of which is still on-going. We hope to be able to compare changes in behavior of this group with those that only attended MIH. As we plan for subsequent MIH trainings, we are doubling the 4-5 hour training period to allow for more hands-on activity and work with real numbers and making greater amounts of 1:1 assistance available and, in one instance, may be in a position to include peer-to-peer support as well to further reinforce training and expand the options for additional support.

It should also be noted that farmers that indicated an interest in longer trainings that incorporated working on their numbers tended to be, at least, several years into running their business. For businesses in their first few years, and introduction to the concepts may have been enough.  

Develop a seminar — within the context of ongoing education, required prerequisites, and follow-up support — to contribute to improved financial management and decision making on 50–75 farms

A seminar was developed and delivered to 89 participants. We will have an early indication of its success when the final survey showing if farmers were able to incorporate practices into their businesses occurred or not.

Collaborators:

Julia Shanks

julia@juliashanks.com
Principal
Julia Shanks Food Consulting
37 Tremont Street
Cambridge, MA 02139
Office Phone: 6179458718
Website: juliashanks.com
Jonathan Stoddard

info@higher-ground-farm.com
Owner
Higher Ground Farm
30 Newbury Street, 3rd Floor
Boston, MA 02116
Office Phone: 6174358193
Website: http://www.highergroundrooftopfarm.com/
Christopher Lindgren

lindgren01@comcast.net
Principal
North 30 Companies
9 Maple Hill
Weston, VT 05161
Office Phone: 8023536717
Benneth Phelps

Volunteer
The Carrot Project
89 South Street, 7th Floor
Boston, MA 02111
Website: http://www.thecarrotproject.org
Rachel Schattman

bellapesto@gmail.com
Owner
Bella Farm
PO BOX 107
90 Cemetery Rd
Monkton, VT 05469
Office Phone: 8023731875
Website: http://bellapesto.com/