A plan sounds dull until you notice what it does for your sleep. Four things happen when you plan: you avoid surprises, you see problems in time, you dare to invest – and you skip the stomach knot when the bank statement arrives.
Draw your year
Food production is seasonal, and seasons mean uneven money. Draw twelve boxes – one per month – and fill in two rows: roughly what comes in, and roughly what goes out. Use last year as your starting point if you have it.
Now you can see your reality: where the peaks are, where the dips are, and where in the year the money runs out. Most food producers have one or two hard months – often late winter, when last season is over and the next hasn't started. That's not a disaster. It's something you can plan for, if you know about it in November instead of in March.
You've already worked out how big the hole is – that came from the year tab in step 2. Here you find out when it appears. That's the half that decides whether you get through.
If you grow, the timing is set for you by the season: the seed is paid for in March, the harvest sells in September. Draw those payments in first – they don't move.
Six ways to get through the dip
The first two move money in time. The last four change the business. Most people need something from both groups – saving in the peak rarely covers it if the margin was too thin to begin with.
Move the money in time
- Save in the peak. Put aside a share of every good month, mechanically, like any other cost. A separate account you don't look at until January is surprisingly effective.
- Move costs. Large purchases and investments are planned for after a peak, not before a dip. Also ask about instalments or leasing on anything expensive and long-lived – the interest can be cheaper than an empty account in March.
Change the business
- Raise the price. The fastest route to a deeper buffer is usually a better margin on what you already sell, not more customers. Ten percent on a product that already sells out costs you nothing in volume. You did the calculation in Sales step 2.
- Get paid earlier. The same annual income can arrive at a different time: deposits on larger orders, prepayment or gift cards before the season, card instead of invoice in the farm shop, and shorter credit terms with shops and wholesalers. Thirty days' credit is a matter for negotiation, not a law of nature – and whoever pays late shouldn't get the best price.
- Change the product mix. This is the remedy that changes the whole curve. A product that keeps longer can be sold in November. One that's worth more per kilo pays you better for the same hour of work. Dried, pickled, smoked, frozen, processed – the same raw material, with another year in which to sell it. Work out the margin on the new product before you commit (step 3); a processed product that takes three times as long to make isn't automatically better.
- Find income in the low season. What fills the empty months doesn't have to be food: courses and farm walks, subscriptions and veg boxes, contract work for a neighbour, renting out premises, equipment or cold storage, Christmas markets and corporate gifts. Often this is the one remedy that lets you draw a wage twelve months a year instead of four.
The monthly check: half an hour
This is the whole routine, and it beats any advanced system:
- The same day every month, set a reminder.
- Look at three things: what came in, what went out, what's in the account.
- Compare with your plan. If something deviates more than you expected – why?
- Write one line about what you're doing about it.
Thirty minutes a month. Six hours a year. That's the price of knowing how your business is doing.
Before you invest
Before a bigger expense – new machine, rebuilt premises, an employee – ask three questions: What should this investment give, in kronor or in time? When does it start giving it? And what happens if it takes twice as long as I think? The third question is the one that saves people.
Do this next
Draw your year – twelve boxes, in and out – and circle the hardest month. A sheet of paper is enough. Then set the reminder for the monthly check. Next step: get help without giving up the wheel.