[Free Download] our money mastery checklist used to create a freedom farm

[Free Download] our money mastery checklist used to create a freedom farm

The first time my Dad taught me how to shear a sheep is a day I don’t want to remember.

… dragging it out of the pen
… trying to hold it still
… getting my head around how to grip the handpiece


The whole thing ended in a mess, and let’s just say that was the most unlucky sheep in the shed – to have me as its shearer that day!


I was 14, and I thought shearing a sheep would be easy. But instead, dad just laughed and invited me to have a go.


My confidence didn’t last long.


If there was a record for the slowest sheep shorn, I would have won (and I had probably left 80% of the wool on).


By the time I finished (at least an hour later), highly frustrated and very angry at the sheep, I vowed never to do it again. Dad laughed again as I walked off, sneering, ‘stupid handpiece, stupid shear, stupid idea.’


There is a skill to it – there is more to it than first meets the eye.


Making a profit is no different. It’s a skill.


It’s a skill that anyone can learn, and there are 3 phases to achieve what we call ‘Money Mastery.’

1. Base
2. Intermediary
3. Advanced


If you lack the skill, you can still make a profit – but like how I left 80% of the wool on the sheep that day, you could also be leaving 80% of the profit on the table. AND you could be more frustrated and stressed than you need to be.


Farm Owners Academy has an excellent  Base, Intermediary, and Advanced money mastery checklist. If you can place a tick next to the 27 items on the list, you will be highly advanced and maximise your profit targets.


If you want the checklist, just click here and you can download it.


It’s great to have handy when you set your goals for the year.


I have complete respect for people that can shear.


Robbo

Could you take 18 months off from your business? This is how I did it…

Could you take 18 months off from your business? This is how I did it…

G’day there,

Andrew (Robbo) Roberts here.  I helped co-found Farm Owners Academy with Greg Johnsson.

I’ve recently returned after 18 months off (I took some time out to deal with two little boys under 2). Here I am with my family – Oscar, me, Jamie and my wife Sonja (Sunny).

I will be sharing my experiences with you each week with a blog post, so please stick around as I want to add as much value to you as possible.

The focus of these posts is to help you realise the mission that sits behind Farm Owners Academy – which is helping you run a freedom farm.

A freedom farm is a highly profitable business that can work without you.

I feel I have a lot of experience in this area, as I have now built three companies that have achieved this.

But please note…I am still a student, still learning, and I am certainly not a know it all, but I do want to share some insights into how you can also create this for you and your family.

I love business.

For me, it’s a game (a very hard game to play).

I love the challenge of business, and I love the growth you can go through as a person. However, business really tests you and can knock your confidence if you are not careful, leading to excess stress and unhealthy patterns and behaviours (I’ve been there and done all of this).

But if you can master it, I believe you can really master your life.

Growing a great company gets you to look in the mirror and helps you look for ways to become a better person. And this is what drives me to keep coaching and helping you.
It’s helping you become the person that you were born to be.

So I am going to start with my first tip.

A goal is simply a dream with a deadline.

If you want to run a freedom farm, the first thing you need to set is the date by which you want to achieve this goal.

For example:

It’s July 1, 2030, and our farm is running completely without me. We are profiting [insert your dream profit goal here], and I can comfortably take six months off to travel with my family [or you can change this part].

That’s it.

Have this written down, and stick it somewhere so you see it daily. 

Don’t worry about how you will achieve this. You don’t need to know.

The goal is nothing but a stamp in the ground that now tells your brain you are on a journey to something great.

And notice how I have written this as though it has already happened? This is important. 

You need to write down your goals as though you already have them. The more specific you are with your goal, the higher your chance of getting it.

Look out for the posts I will be sharing over the next few months.

We will be diving into the world of money and what holds you back from having all the wealth you ever thought was possible so you can live a happy and abundant life.

Thanks for being part of the Farm Owners community

Regards

Robbo

P.S. I am now on Twitter… please follow me https://twitter.com/robbofoa

Our top 4 tips for higher gross margins (and hence…higher profits!)

Our top 4 tips for higher gross margins (and hence…higher profits!)

Last week, we talked about where most farm owners go wrong in trying to grow their profit.

Most people focus on reducing costs (through things like minimising taxwhen what they really should be focusing on…

Is increasing revenue.

As this study from the Wimmera region of Australia shows… 

The top 20% most profitable farms spend a bit more than average (blue bars)…but they make significantly more in income (black line).

Put another way, they’re putting in slightly more input for significantly more output.

Inputs are what you put into your farming operation: time, effort, and resources.

Outputs are what you get out: the quantity and quality of what you produce and sell (whether that’s grain, sheep, etc.)

The simple recipe for growing your profits? Keep your inputs as low as possible while maximising your outputs.

Today, let’s dig deeper into this topic and explore the 4 best ways to do this.

Specifically, we’ll focus on a key financial figure called your Gross Margin.

Don’t worry if you don’t know what that means! We’ll tell you what it is and how to calculate it in a minute.

There are 4 simple ways to increase your Gross Margin and we’ll walk through each one, giving you a clear example so you can see exactly how this might play out in your farming business to grow your profits.

FYI: This lesson is pulled directly from our Farm Financial Framework course, where farm owners learn the language of finance to increase profits and build a more sustainable business.

The info was too good to keep it just for our members — we wanted to give you a sneak peek inside the course!

 

Quick finance lesson: What is Gross Margin?

Gross Margin is one way to measure business performance.

In simple terms, it’s the amount of revenue that’s left over after you account for the Variable Costs incurred to produce that revenue.

Variable (or Direct) Costs are the costs that go up and down, depending on your level of output.

A few examples of Variable Costs in a sheep enterprise are:

  • Shearing
  • Ear tags
  • Drenches
  • Supplementary feeding

…You get the drift.

All of the above will vary based on the size of the sheep enterprise.

Another type of cost you may hear us talk about is Fixed (or Overhead) Costs. These are not dependent on the size of the business or production levels. They are costs you incur regardless.

An example of Fixed Costs are your council rates. It’s the same whether you run 1,000 sheep or 10,000 sheep on the same area.

…But you don’t need to worry about Fixed Costs for today’s lesson. We’re just sharing that for your information!

Here’s how to calculate Gross Margin:

Gross Margin = Revenue – Variable Costs

Your goal as the farm owner is to optimise Gross Margin for each enterprise, to the point where profit is maximised. You do that by maximising the outputs while minimising the inputs.

There are 4 main ways to do this and EVERY farm can apply these lessons. Let’s dig into each one now:

 

Strategy #1: Optimise Investment

The first way to increase your Gross Margins is by optimising your Investment — tweaking things to make the time, money, and/or resources (the investments) you put into the business create even more revenue.

To do this, you’ll add in a bit more inputs to create a large amount of extra output.

 

 

Put another way: What’s something you can add to your operation (that costs only a bit of time and/or money) that will produce a BIG growth in revenue?

Example of Optimising Investment: Culling on performance in a Merino wool flock.

If you start measuring the fleeceweight and fibre diameter of your Merino flock, you could then select them based on their measured performance, which would result in a big increase in outputs.

By spending a little more money on the cost of measurement and a little bit of time on measuring (both of these are investments), it can produce a significant increase in your income by keeping only the best performing animals.

That’s the idea behind optimising Investment: investing slightly more inputs to create significantly greater outputs.

 

Strategy #2: Optimise Efficiency

The next way to increase your Gross Margin is by increasing the efficiency within your business.

Your goal here is to put in the same amount of inputs to generate significantly more outputs.

 

 

Put another way: Where can you “work smarter, not harder” in your business to produce a BIG growth in revenue?

Example of Optimising Efficiency: Use a more efficient fertiliser.

Fertilisers with similar costs can vary quite a bit in terms of their analysis. You could buy a different fertiliser at a similar price to what you’re paying now, that puts out significantly more N-P-K-S onto the pasture.

That would lead to higher growth of pasture and livestock that graze there.

You’d use the same inputs (cost of fertiliser) for greater outputs (pasture and livestock growth). That’s increasing efficiency!

 

Strategy #3: Optimise Focus

In this strategy, you’ll use far fewer inputs to create only a small amount of lower outputs.

 

 

But wait…doesn’t reducing outputs seem counter-productive to increasing profit? Not necessarily.

Optimising Focus means reducing your costs quite a bit, but having it result in only a tiny bit lower revenue.

Let’s say your original inputs were $20 and the output produced was $40, giving you $20 Gross Margin. If you reduce your inputs to $10, which as a result reduces your output to $35, that leaves you with $25 Gross Margin…which is an increase in the profit you keep!

See how that works? As long as you reduce your inputs by MORE than your outputs, you’ll make more profit.

Example of Optimising Focus: Change your ewe replacement policy.

Let’s say you’re buying in external ewes at $250 each for your composite flock. Instead of selling all your composite ewe lambs at $150— like you usually do — you could keep a percentage of those lambs. Then instead of buying expensive new ewes, you can use those lambs as replacements.

In this way, the input costs (cost of replacement ewes) can be dramatically lowered, by around $100 per animal. And you’ll only end up with a slightly lowered return as a result. That means higher profits!

 

Strategy #4: Optimise Waste

The final strategy to increase your Gross Margin is to optimise waste by putting in significantly fewer inputs for the same level of output.

 

 

Put another way: What should you stop spending time and/or money on, because it’s not growing your revenue?

Example of Optimising Waste: Stop spending money on licks and blocks.

We know from experiments done by CSIRO and other departments of ag that there are situations where licks and blocks are not very effective for the sheep they’re fed to, the same production effect could be achieved by purchasing and feeding more cost effective nutrients.

The cost of the licks and blocks can be quite significant but there’s not much production benefit.

So…you could stop buying them (significantly lowering your input) without really affecting the sheep (the same amount of output). That’s how to optimise waste to create higher profits.

 

Bringing it all together

Ideally, to increase Gross Margin, we’re looking for a combination of all 4 strategies above.

 

 

The goal is to use significantly less inputs to create significantly more outputs → that’s how to generate consistently high profits.

The sum of the parts here is bigger than the individual components. If you can find one way to apply each of these 4 strategies, you’ll see massive increases in your farm’s profits this year.

As always, we’re here to help! If this blog post piqued your interest and you want to learn more about how you can increase Gross Margin on your farm, let’s have a chat. Just send us an email at support@farmownersacademy.com and we’ll get it sorted.

 

Want to learn more about finance? Join our free training.

If you’re loving what you’re reading and want to learn even more about how to apply pro finance lessons to increase profits on your farm, join us for our upcoming free training.

We’ll simplify farm finance and give you plenty more ideas for how you can make more money (ie: reduce your inputs and increase your outputs) without working more hours.

 

Click here to sign up for the free finance training — it’s free!

The big secret rich farmer owners know (and average farm owners don’t)

The big secret rich farmer owners know (and average farm owners don’t)

An insider secret rich farm owners know that the rest of us don’t?
 

Focussing on cutting costs in your farm business is probably keeping you broke. 

Okay, maybe its not keeping you broke-broke…but it’s very unlikely that it is making you rich.

It’s counter-intuitive, I know. And we’re not saying reducing costs is bad and to be avoided!

But focusing on this method over the long run is undoubtedly different than what rich farm business owners do.

When you understand this, you’ll shift your thinking to maximum profit rather than minimum cost!

Here’s an example to show you what I mean…

My friend’s farmdog had a nasty case of pancreatitis earlier this year. To save the dog’s life, the emergency vet put him on a strong dose of steroids.

The steroids did the trick and the dog’s health improved.

Now, those steroids saved the dog’s life, no question about it. But that medicine won’t help him achieve better long-term health. In fact, if he continued with steroids long-term, it would actually degrade his health, as the medicine has some nasty side effects.

It was a short-term fix, not a long-term one.

In order to live a long, full life, the dog needed a new healthy diet. My friend saw a different vet who specialised in nutrition to come up with a food plan that would keep her dog on the right path.

The two vets were equally qualified and equally important to the health of her dog…but they had different goals and methods.

The emergency vet focused on the short-term: saving the dog’s life. The nutrition vet focused on the long-term: maintaining good health for years and years.

Think of cutting costs like the emergency vet…

The goal is to save money this year but miss the opportunity that is in front for higher profits year on year.

Put another way: Your decisions to cut costs may save you $1 this year, only to cost you $10 in the long-run.

If you want to maximise profit, you need to shift your focus a bit… 

The secret rich farm owners know (and average farm owners don’t) 


If you want to build true wealth…

You’ve got to stop thinking like about cutting costs (a little windfall this year)…

And start thinking like a rich business owner (who aims for big wins over the long-term.)

The most successful farm owners know it’s better to increase revenue than cut costs.

They ask “How do I maximise profit?” rather than “How do I minimise cost?”

Put another way: “How can I use what I have to make more money in the long-term?” Vs. “How can I save a couple bucks this year?”

When you focus on increasing revenue, it can have a multiplying effect on your profits…and that effect doesn’t happen when you just reduce costs.

Here’s an example to show you how this works:

If you make $1.00 in income… 

  • $0.30 of that income might go to your variable costs — things that increase/decrease depending on how much you produce, like labour, seed, animal health, etc.
  • $0.30 may be fixed or overhead costs — things you have to pay regardless of how much you produce, like plant and equipment, council rates, repairs and maintenance, etc.
  • …Leaving $0.40 (40% of your income) as profit

 

OPTION 1: If you reduce your fixed costs by 10%… 

  • Your income remains $1.00
  • Your variable costs will stay the same ($0.30)
  • You’ll save 10% ($0.03) on fixed costs (new total: $0.27)
  • Now you’ll keep $0.43(43%) as profit

 

OPTION 2: If you increase your revenue by 10%… 

  • Your income increases to $1.10
  • To achieve that 10% increase, your variable costs might have increased by 10% too (to $0.33)*
  • Your fixed costs likely stayed the same (still $0.30)
  • …Leaving $0.47 (47%) profit 


See how that works?

You’ll keep $0.07 (70%) of that extra $0.10 income as profit…compared to only 40% profit that you made originally and 43% when you cut costs. 

*NOTE: There are lots of examples where an increase in income can be achieved without an equivalent % increase in variable costs! Click here to find out how.

It doesn’t sound like much when we’re talking about $1. But when you multiply that out over a million dollars, it’s a fair bit.

The important takeaway: an increase in income doesn’t scale up proportionally! Your profit line grows quicker when you increase your revenue by a percentage than if you decrease your costs by a percentage.

That’s why rich farm owners focus on growing revenue, rather than cutting costs.

RELATED POST: The 7-Step Plan to Higher Profits on the Farm 

 

The proof is in the pudding 


Don’t take our word for it that you’ll make more money by increasing revenue than decreasing costs.

Check out this study from the Wimmera region of Australia…

For croppers, the top 20% profitability farms have higher costs (blue bars)…but significantly higher income (black line): 

 

And it gets even more interesting when you break it down further… 

When you look at costs as a percentage of income — Total Farm Costs Ratio in the chart above — the top 20% farmers have much lower ratios than the average farmer (around 75% vs. 90%).

This may be counter intuitive as in the first graph we showed you that the top 20% businesses had higher costs but they have a lower cost ratio. Why is this happening?…Overall they are producing more output. They are using that slightly higher cost base to drive considerably more production which results in those costs being spread out over more units of production (or income).

What this means is that they have a lower cost of production (the cost per unit of output).

AND you can see their net profit ratio — which is profit/income — is also much, much higher.

So the best performers may spend a bit more…they have a lower cost of production…but they also make a lot more overall!

That’s why rich farm owners focus more on increasing revenue than decreasing costs. If you want to be a top producer, that’s what you should focus on as well.

The way that you start is by getting the right business model that delivers better profits.

The good news?

You’ve just completed your first big 3 finance lessons!

  1. Most farm owners rely on what their parents taught them for advice on their business…and now you know when you should (and shouldn’t) heed their suggestions.
  2. Most farm owners think cutting costs is the best strategy to keep more money in their pockets…and now you know that can cost you in the long run.
  3. Most farm owners think decreasing expenses is the best way to grow profits…and now you’ve seen the math on why growing revenue is a more powerful strategy.

The #1 most important thing you can do as a farm owner is to know your financial numbers…better than your accountant does.

Not sure where to start?

We’ve got something to help you master your financial numbers to grow your profits… 

FREE TRAINING: Learn The Fundamentals Of Farm Finance…And Pump Your Profits This Year

Join us for our free upcoming webinar to get a crash course in finance, so you can learn the basics of farm business finance.

Click here to register — it’s free!

As always, we’re here to help! If this blog post piqued your interest and you want to learn more about increasing your revenue on the farm, let’s have a chat. Just send us an email at support@farmownersacademy.com and we’ll get it sorted.

Why most farm owners are wealthy on paper but not rich in their bank accounts…

Why most farm owners are wealthy on paper but not rich in their bank accounts…

When I ask you to picture the wealthiest 1% in the world, who comes to mind? 

Jeff Bezos?

Gina Rinehart?

Bill Gates?

What if I told you that YOU are part of that elite group? 😳

Even if it sounds completely insane, it may very likely be true!

Many of the farm owners we know fit the financial criteria to be part of the top 1%. (We’ll tell you the exact criteria in just a minute.)

But if so many farm owners are in the top 1% — or even the top 10% or 20% — why don’t they feel like it?

Why do they spend their days stressed about money and losing the family farm…

Working themselves to the bone, 7 days a week…

Yet still have barely any money in their bank accounts?

There’s this disconnect happening because most (or all) of your wealth is likely in non-cash assets — land and equipment, mainly — rather than your bank account.

Even if you own $100 million in land and you’re running the farming business on it, if your business isn’t turning a profit or paying you a salary, you might not have a cent in your bank account.

Most farmers are asset rich (which makes them wealthy on paper) but cash poor. So it doesn’t feel like money at all.

I don’t know about you…

But if you’re part of the wealthiest 1% of the world, I say you deserve to feel and live like it!

You should ENJOY your money and all the fun things that come with it…

Feel calm and at ease, knowing you’ve got a solid financial net beneath you…

And know that you’re building a legacy of dependable wealth for future generations.

Whatever your cash situation right now, I guarantee there’s a way to leverage your assets better to live a richer life.

Today’s blog post will explore the 3 options in front of you to make the most of your wealth (whatever level you’re at), so you can start living like the rich business owner you are on paper.

Are you part of the top 1%?

According to The Conversation, an individual net worth of $1,295,825 AUD makes you among the world’s 1% richest people. If it’s you and your partner at home, that’s a combined household net worth of $2,591,650.

(Note: That amount is wealth, not income).

Net worth is the total of every asset to your name — bank balances, property ownership, farming equipment, share portfolio, superannuation balances, etc. — minus any debts.

Basically, if you sold everything and levelled any debt to your name tomorrow, how much money would you have? ← That’s your net worth.

According to ABARES statistics the average farm owners net worth in Australia is in the order of $5.8 million, mainly in land, livestock and plant and equipment.

Are you in that bracket?

If so — you’re in the top 1% wealthiest people on the planet. (May I get you some caviar and champagne to celebrate?)


Even if you’re not in the top 1%, I bet you’re hovering somewhere above the wealthiest 20% of all people on the planet. That’s such a powerful place to be!

So what should you do with that wealth, in order to make the most of it?

The 3 wealth benchmarks you should be seeing on your farm

If you’re in the top 20% (and I’m willing to bet you are), we have certain benchmarks we like to see our farm owners hitting.

These are signs of a healthy business AND a healthy personal life. (Because you deserve to live a rich life for all the hard work you put in day in, day out!)

Every farm business is different so these benchmarks aren’t exact. But they’ll give you a rough idea of where you want to be tracking.

If you’re NOT hitting these benchmarks, don’t worry. We’ll give you 3 options in a minute for how to improve your situation.

 

Benchmark #1: Your business should be returning to you in profit (after paying yourself a commercial wage – see Benchmark #2) at least what you could lease your land out for (currently around 3-5% of asset value).

The market lease rates in Australia at the moment are around 3-5% of land value — so that’s what you could make if you stopped farming and leased your land to someone else. Other than being paid the lease payment, there is no risk to this strategy.

To determine if you’re hitting this benchmark, you need to calculate your Return on Assets Managed (ROAM). This is a financial ratio that tells you how your profitability compares to the assets used to generate that profit.

Here how to calculate ROAM: 

=     Net Profit
      Asset Value

Note: Net Profit is your income, minus all your expenses (excl. tax, leases and finance costs). The expenses include allocating a proper wage for all owners and family working in the business (see Benchmark #2). 

For example, if you had a Net Profit of $100K last year and your Asset Value is $2M… 

= $100K    =    5%
    $2M         ROAM

If you’re not currently seeing 3-5% return on assets managed (ROAM), you might as well be sitting on a beach somewhere and leasing out your land — you’d make the same amount of money and be taking on less risk!

(If you want to learn more about the healthy financial farm benchmarks like ROAM, click here to download our free cheat sheet!)

Benchmark #2: Pay yourself (the principal owner) a salary of $115K and full-time family workers $70K.

Too many farmers don’t pay themselves a proper wage. You’re highly skilled and should be paid accordingly!

$115K (incl. super and on costs) is the bare minimum for what you deserve as the farm owner. Often our farm owners enjoy salaries much higher…but $115K is the minimum you should be seeing on a healthy farm business. If you had to pay someone full time to manage your farming business and run it well, this is at least what you would have to pay.

In a similar vein, full-time family working in the farming business deserve to make at least a $70K salary (incl. super and on costs), to compensate them for all their hard work.

A healthy farm business can easily work salaries like this into their operating expenses.

Benchmark #3: Keep your Equity Percentage around 80%.

Equity Percentage measures the value of ownership in your farm (land, plant and livestock) and is basically the breakdown of assets YOU own, versus how many are owned by the bank or other lenders. A healthy farm business owns the majority of those assets — around 80% is ideal.

Here’s how to calculate Equity Percentage:

= Market Value of Your Farm — Farm Debts
        Market Value of Your Farm

For example, if your farm is worth $1M, you owe $200K on your mortgage and have $100K in other debts…

= $1M — ($200K + $100K)      =     $1M — ($300K)     =   $700K      =        70%
                 $1M                                         $1M                     $1M        Equity Percentage

(If you want to learn more about the healthy financial farm benchmarks like Equity Percentage, click here to download our free cheat sheet!)

It’s okay if your Equity Percentage is lower than 80% from time to time, as long as the business profitability can sustain it and you have a clear plan to return it to a higher level. It shouldn’t be way higher than 80% though, as this has the potential to create a lazy balance sheet and means you’re missing out on other income-producing activities. 

As the chart above shows, most farm owners’ equity levels have increased dramatically recently because land prices have gone up. If you aren’t taking advantage of this (and the low interest rates right now) to build wealth over time, you may be missing a big opportunity.

Maybe you’re hitting all three of those benchmarks already. If so, you can click out of this blog post now because you’re already killing it! Keep up the good work, mate. 😉

But more likely, you’re lagging behind on one, two, or all three of those benchmarks. That’s okay, and most farm owners are in the same boat.

The next step is to explore your options, whatever your current financial position. You’ve got this big asset base and you’re highly employable and skillful…don’t accept a situation where you’re not living like a wealthy person!

3 options to ENJOY your high level of wealth

 

1. Sell everything (if you love farming don’t do this…)

Let’s start with the most controversial option, shall we? 😏

You’ve always got the choice to make a clean break: sell all your assets, pay off your debts, and enjoy the money left over.

This may be the best option if you don’t have a strong business, don’t have a passion for farming, aren’t interested in learning about business, and/or you want to leave the industry.

(If you don’t have a strong business but DO have a passion for farming, reach out to us at Farm Owners Academy — we can help!)

Most of our farm owners want to stay in farming. But don’t discount this option without considering it first! It’s powerful to explore all the opportunities in front of you.

This option might be for you if:

  • You’ve lost your passion for farming and want a clean break from the industry
  • You don’t have a strong farm business and don’t want to work on it
  • You’re passionate about something else (work or personal) and want a big lump sum of money to fuel that passion
  • Your children don’t want to stay in farming and would rather have money than inherit the farm ← this is why communication in succession planning is so important!

 

2. Lease your farm

Another option if you’re not passionate about farming is to lease your farm. This is a great choice if you’d like to do something different but you don’t want to sell the farm and lose it entirely.

Like we said above, the current market lease rates in Australia are in the order of 3-5% of land values — which means if you leased out your land to someone else, they’d pay you 3-5% of the value of those assets to do so.

So if you’re not currently making 3-5% ROAM from your farm, you may want to seriously consider this option because you’d probably make more money NOT working on the farm than you do working now!

Farm Owners Academy members Tim and Cheryl are doing a version of this and it’s working out incredibly well for them — click here to read their story.

Seriously, it’s up to you:

You can get up at 4am and slog all day in a roasting-hot paddock for 16 hours…or you can sleep in until 10am, put your sunscreen on, and lounge on the beach until dinnertime…and at the end of the day, make the same amount of money.

This option might be for you if:

  • You don’t want to work in farming day-to-day
  • You’re not ready to sell the farm
  • You’re currently making less than 3-5% ROAM and are not committed to improving your business performance
  • Your kids want to take over the farm someday but you don’t want to work it now


3. Run your farm business better

Most of the time, it’s not lack of wealth that’s holding our farmers back; it’s lack of education about how to USE that wealth.

If you’re not hitting the benchmarks above, don’t want to sell your farm, and still want to work in farming, your best option is to learn how to make your business more profitable.

…And that starts with an education in finance — the language of business. Once you understand how money truly works, you’ll be able to make the most of the assets you have to generate as much profit as possible.

That’s exactly what happened when Farm Owners Academy member David got serious about finance and business. He had his most profitable year on the farm AND worked 50% less — all because he knew how to leverage his assets in the smartest, richest way possible. Click here to read David’s story.

This option might be for you if:

  • You love farming and want to stay in the industry
  • You want to work on the farming business every day as your job (note: we said working ON the business, not IN the business; they’re very different things!)
  • You believe in the potential of your farm and of you as the farm leader — and you know with the right education, you could do better

RELATED POST: 6 Steps to Take You from Family Farm to Well-Run Business

So there you have it — 3 great options for high net-worth farm owners who don’t feel very rich right now:

  • Sell everything (and enjoy the money)
  • Lease your farm (and enjoy the money)
  • Transform your farm into a profitable business (and enjoy the money)

There’s no right answer, only what’s right for YOU.

So take some time to think about what you most want out of your farm — both today and in the future — and explore all your options to make the best choice for you and your family.

As always, we’re here to help! If this blog post piqued your interest and you want to learn more about making the most of your farm, let’s have a chat. Just send us an email at support@farmownersacademy.com and we’ll get it sorted.

 

The ONE thing that helped Greg 4x his turnover and 3x his profits

The ONE thing that helped Greg 4x his turnover and 3x his profits

Sometimes the smallest things in business produce the biggest results. 

Quick history lesson:


Back in 2013
, Farm Owners Academy co-founder Greg owned a vet business that was turning over $750K per year, $150K of which was profit.
 

Not bad, right?
 

But to make that money, he had to do EVERYTHING in the business himself.
 

He was working insane hours, 7 days a week — which didn’t leave much time or energy for the things he loved, including his three kids and consulting to farmers.
 

Sound familiar?
 

Greg wanted something different for his business and his life. So he joined a mastermind with a successful business coach to elevate his results.
 

And three years later…
 

After applying what he learned…
 

Greg grew his business to $3million turnover and $400K profit per year.
 

Now, that kind of financial transformation is pretty amazing. But what’s even more amazing?
 

He achieved those results without being involved in the day-to-day business. He did the hiring and firing, but basically, the business ran without him.
 

(That’s when Greg co-founded Farm Owners Academy with his business coach! Once he saw how powerful these business principles were, he couldn’t wait to share them with the farming community he devoted years to consulting.)
 

Here’s the important part:
 

Greg’s financial transformation — plus many of the transformations from our most successful clients — ultimately comes down to just one thing.
 

Yep…just one!
 

This thing is the biggest reason Farm Owner Academy Alumni members (the ones who complete the Platinum Mastermind Program ) get 4.6% higher Return on Assets Managed than the average farmer and have way more fun while they do it. (Given a $3 Million asset value, that’s an average of $108,000 more every single year, compared to the ABARES averages).
 

Want to know what that thing is so you can use it to grow your farming business?
 

Keep reading. 😉 We’ll share the secret strategy, along with 3 tips to help you apply it and start seeing results for yourself.
 

The ONE thing the most successful farm owners all have in common is…

They realise to get the things that successful farmer owners HAVE, first you need to BE (or think) the way successful farm owners think and then DO the things that successful farmer owners DO. This is the Be – Do – Have model.
 

At the top is what you want to HAVE — these are your results. (In Greg’s case, it was a $3 million turnover business that ran without him day-to-day.)
 

Beneath that are things you have to DO to achieve those results. These are your actions and habits. (Greg had to hire a coach, train new staff, redesign the business to run without him, etc.)
 

Beneath that is who you have to BE in order to carry out those actions. (Greg had to become a strategic, forward-thinking, and confident business owner in order to take the steps to grow his business. He couldn’t do it as a vet who was needed to do all the work himself and was afraid to let go of control).
 

And underneath all three of those levels is something very, very important:
 

The right MINDSET.
 

Your mindset is a set of beliefs that shape how you think, feel, and behave.
 

And without the right mindset, you’ll never become the person who takes the actions that lead to the results you want.
 

The problem is most people have it the wrong way around…
 

They think that if they HAVE what the successful farm owner has, then they will DO what the successful farm owner does…and then they can BE the person the successful farm owner is.
 

So they go spend money on things that don’t really matter, they take little action, and their thinking remains the same tomorrow as it is today….AND….nothing changes.
 

After coaching hundreds of farm owners, 95% of our clients say the biggest shift they made that led to their success was a shift in their mindset…95%!
 

And the sad part is, most people think working on their mindset is a load of fluff.
 

Have you ever thought that mindset stuff was a bit fluffy? We did when we first started out.
 

But the truth is, the right mindset lies underneath everything else. Ask any successful business owner and we guarantee they’ll have done some mindset work in the past.
 

The good news is that working on your mindset costs absolutely nothing. So it’s okay if you’re skeptical. It doesn’t have to cost you anything to try this out and see if it works.
 

Here are 3 simple but significant mindset shifts (and how to shift them) to become the world-class farmer you need to be to create the business and life of your dreams.
 

Mindset shift #1: Teenager to toddler mentality

I bet you’ve either raised a teenager or spent time around a teenager. So tell me…
 

Can you teach a teenager anything new?
 

No.
 

Do teenagers think they already know everything?
 

Yep.
 

Teens have a closed mindset that blocks them from learning new things. Unfortunately, many farmers also think like this.
 

They think they already know everything about everything and there’s nothing new they can possibly learn. And this blocks the opportunity to discover new habits, tactics, and strategies to create a high-performing business.
 

To grow as a business owner, the first thing we need to drop is our ego.
 

Because you may know a whole lot about being a technical operator on the farm. But you probably don’t know everything about… 

  • increasing profits
  • improving margins
  • creating a business model that delivers predictable results
  • developing systems and processes that give you more time

…and all the other elements of running a highly profitable farm business.

To be an open-minded business owner, you need to lose the “I already know that” teenage mindset and adopt a curious “what can I learn here?” toddler mindset.
 

Toddlers look at the world like everything is new. They’re constantly learning, watching others around them, and trying out different things to find what works best.
 

How to shift this mindset:
 

The next time you want to say, “I already know that” or “that won’t work for me,” say this instead:
 

“That’s interesting.”
 

You may not agree with everything you hear. But get out of the habit of discounting new or different information right away.
 

When you say “that’s interesting,” you can take a moment to consider how it might work for you…rather than simply assuming it won’t.
 

Top farm owners and successful business people always stay open to learning new things. If you can, too, you’ll take the first step in developing a winning mindset.
 

Mindset shift #2: “Failure” to “Feedback”

In sport, you’ve got the winning team and losing team, right?
 

And if you feel like you’re never winning (ex: if you’re always struggling to generate profits on the farm) it probably feels like you’re always on the losing side, like you’re failing.
 

But the way we see it, there is no losing. You’re either on the winning team or the LEARNING team.
 

Failure doesn’t actually exist. There’s just feedback.
 

If you try something and it doesn’t work out the way you expect, guess what? You just learned what doesn’t work…and that’s really helpful feedback! It gets you one step closer to what does work for your farm.
 

Look, succeeding in business involves trying new things and taking risks. And that inevitably means mistakes.
 

No business owner has a straight journey from win to win to win. There are always missteps along the way.
 

To be a profitable farm owner, you have to accept that mistakes will happen. But they’re not the end of the world, they’re just a step on your bigger journey.
 

How to shift this mindset:

The next time you make a mistake, remind yourself that it’s NOT a failure. It’s just a lesson.
 

As long as you remain open-minded (mindset shift #1) and keep participating…
 

If you look for feedback where you’re going wrong…
 

And if you apply that feedback to adjust your strategy and keep moving forward…
 

…It’s impossible to fail, in our experience. You’ll always find a way to win eventually.
 

Just think, “Okay, so now I know what doesn’t work. That’s great feedback.” And move on!
 

Mindset shift #3: Blame to ownership

After a bad season, most farmers will say things like…
 

“The bloody bank raked me over the coals.”
 

“My employee did a crap job and cost me a fortune.”
 

“The drought ruined my entire year.”
 

It’s really tempting to blame something or somebody else for your results, right? But that won’t help you grow a profitable farming business.
 

Because if it’s always somebody else’s fault, you’ll always be a victim without any control.
 

A stronger mindset is to take responsibility for the results on your farm. All of them.
 

And instead of blaming others, look for ways YOU can improve the situation:
 

“I could have done better negotiating my rates with the bank. I’ll learn more about negotiation and have another conversation with them.”
 

“I didn’t train my employee well enough. I’ll create some systems and processes to make it easier for them to do the job right in the future.”
 

“I chose to farm in this area and I know droughts happen. I need a better plan so I can still make profits even if the weather’s crap.”
 

RELATED POST: It’s How You React to the Drought that Matters Most
 

Can you feel the difference between blaming and taking ownership?
 

Blaming feels weak, right? Whereas taking ownership feels strong and powerful.
 

How to shift this mindset:

You need to start playing “above the line”…

 

Top farm owners take ownership, accountability, and responsibility for every outcome in their farm business. They act as if everything is within their control.
 

So they’re always asking, “how can I improve this? What are the SOLUTIONS I can create?”
 

It’s a creative, problem-solving mindset. And when you use it, you’ll continually find ways to improve your results.
 

Whereas struggling farmers often blame someone or something else, make excuses, and deny any role in the problem. That makes them powerless to fix the situation and they keep repeating the same patterns and getting the same results.
 

If you want to step up and be a profitable farm owner, you need to start playing above the line, in all situations. And it starts with a mindset of taking ownership.
 

In our experience, improving your mindset is the #1 most important thing you can do to improve results on your farm.
 

The right mindset fuels the right beliefs and the right actions to get the results you want.
 

And you can start right here, right now, by making these three powerful mindset shifts: 

  1. Adopt an open-minded toddler mentality
  2. Don’t fear mistakes and see failure as feedback
  3. Take ownership of everything on your farm

Your mindset won’t change overnight. But little by little, you’ll notice that you start to think differently. And when you do, it will have an incredible effect on your actions and results.
 

What’s coming next…

We’ll be sending lots of free education your way over the next few weeks.
 

Have a toddler mentality with this stuff! Keep an open mind and see how it can work for you, rather than automatically saying, “I already know it all.”
 

The information we’ll be sharing has proven to work for our farmers (remember, they’re making a 4.6% higher ROAM every year) so you’re bound to pick up some powerful tips for your farm business.
 

We’ll send these lessons straight to your inbox, so click here to sign up for free Farm Owners Academy email updates.

 

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