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Where do farm leaders make the biggest difference?Where do farm leaders make the biggest difference?

Finance First: Many farm leaders love the production side of farming, but managing the business is usually the most profitable way to spend your time.

Darren Frye

September 5, 2023

3 Min Read
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As your farm operation has grown in size and complexity, you’ve probably noticed a few different things. One is that there’s much more business to manage. By that, I mean the work required of you on the business management side has probably increased.

Another thing you may have found is a difference in where you spend your time in the operation. Your farm’s growth – and the corresponding rise in business management needs that come with it – means that the leader’s focus turns more toward leading and managing the business rather than working ‘inside’ of it.

Production passion

Think of it this way: When you started your farming career, you probably spent the vast majority of your hours working on production, in addition to other tasks such as hauling grain, doing repairs around the operation, and other hands-on work.

Once you became the farm’s leader or started taking on more of a leadership role, your tasks probably also started to shift. As your responsibilities shifted more toward managing logistics, processes, or employees, where you spent your time changed too.

Some farmers might find this shift more challenging than others. This depends somewhat on where your passion lies – if you were initially drawn to farming because of the opportunity to produce a great crop, you might still feel very connected to the production side.

Getting things done

That can lead many farmers to feel like they aren’t really ‘doing anything’ unless they’re directly doing hands-on production work in their operation. They might even start to feel they’re spinning their wheels or never really accomplishing anything tangible when they spend time working on the business side of the operation – managing the farm’s finances, marketing, people management, etc.

That can feel frustrating, but it can help to make a shift in your thinking as a leader. When you find that a greater amount of your hours are spent working on the business and financial management, it’s time to ask this question: Where is my time as a leader spent in the most profitable way?

Time and money

If we say that time is money – and when you’re in business, it’s accurate to say that – then where the farm leader is spending their time is also where the farm is spending money, in a way. When the leader spends their time doing things that no one else can – like managing the farm’s finances, building relationships with lenders, advisors, landlords, planning for the farm’s future, developing employees – then they are creating unique value for the farm.

On the flip side, if the leader spends time on tasks that other people in the operation could readily complete – tasks that employees are already trained to do or could be trained to do – then the farm is ‘spending’ a lot more to get those tasks done due to the opportunity cost of the leader doing that versus an employee.

The key thing is to think about where your time as the leader is most valuable. Here are some examples of a few areas the leader’s time can make the biggest difference for their operation: financial management, managing and developing people on the farm, creating plans for the farm’s future, building and executing flexible marketing plans, building relationships with lenders, landlords, and other major stakeholders. What other areas would you add, based on your experience leading your operation?

How are you navigating this market?

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About the Author(s)

Darren Frye

CEO, Water Street Solutions

Darren Frye grew up on an innovative, integrated Illinois farm. He began trading commodities in 1982 and started his first business in 1987, specializing in fertilizer distribution and crop consulting. In 1994 he started a consulting business, Water Street Solutions to help Midwest farmers become more successful through financial analysis, crop insurance, marketing consulting and legacy planning. The mission of Finance First is to get you to look at spreadsheets and see opportunity, to see your business for what it can be, and to help you build your agricultural legacy.

Visit Water Street Solutions

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