The 80/20 equation for farm success: Then and now

The 80/20 equation for farm success: Then and now

Years ago, the more hours you worked, the more successful the farm became

There's a lot that's changed in farming over the past 10 to 20 years. From the technology that's in equipment now, to the role that landlord and lender relationships play in the operation – there's a lot for a farm leader to think about.

Here's something that I hear from quite a few farmers – and it seems to become truer with each year in ag. In the past, it used to be that if you wanted to be more successful than your neighbors or other farmers, you made sure that you were working harder than them. That usually meant more hours – more blood, sweat and tears. You literally outworked your competition.

Years ago, the more hours you worked, the more successful the farm became

The 'equation' for farm success went like this: 80% hard work, 20% smart business decisions. The harder you worked, the more successful you could often become. Maybe that's the philosophy some of your family members from the older generation still hold – your dad or grandpa or uncle.

The farm leader's shift
In the past decade or two, a shift has been happening. It's moved the farmer from focusing on production, working and laboring hard to produce a crop or livestock herd, to a farm leader responsible for running a full-fledged business operation – complete with employees to manage and major financial decisions to make – in addition to the production decisions.

I think the 'success equation' I mentioned above has reversed from what it was in the past. It's still made up of the same components, but the ratio has changed. So now that equation is more like this: 80% smart business decisions, 20% hard work.

It's not that hard work isn't important – it certainly still is. Being willing to do what it takes to get the hard work of production done is crucial on a farm – because farms are built around production. It's just the fact that the business decisions the farm leader makes now have a much greater percentage of influence over whether the operation is successful or not. And the decisions today are often larger.

Rate yourself
On a scale of 1-10, how would you rate yourself, as a farm leader, on your business decision-making skills? Why did you rate yourself that particular way? What actions do you take to keep improving your decision-making skills?

There are a couple opportunities across the Midwest this winter to continue working on the 80% portion of today's success equation – your business decision-making skills. The Water Street EDGE farm business seminars are made up of sessions that focus on the types of skills required of today's farm CEO.

There will also be sessions that help you lay the foundation for your farm's legacy – with family business expert Jolene Brown, and ideas on how to position your operation for agility and opportunities with ag economist Dr. David Kohl. And everyone on the farm can benefit from learning and practicing the resilience and stress reduction skills that Dr. Wayne Sotile will share in his keynote session on 'Building a Resilient Farm.'

You can get a 50% discount on your registration now – there's an early bird special. See the full seminar agenda and registration deadlines at waterstreet.org/edge.

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