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Planning for the Unexpected & Raising Money for your Farm Business with Tera Johnson
121 Plays5 years ago
In this episode of the Direct Farm Podcast, we're delighted to host Tera Johnson, the founder of the Food Finance Institute (FFI). Tera shares the history behind FFI and how the institute works with sustainable food and farming businesses.
Show Notes:
https://foodfinanceinstitute.org/
https://www.barn2door.com/resources
Recommended
Transcript
Four Levers for Farm Success
00:00:02
Speaker
Welcome to the direct farm podcast, the weekly listen for farm selling direct. We'll talk about the four levers for farm success, which are quality, brand, price, and convenience. We'll hear from outside industry experts and producers like you to delight your customers save time and to increase your direct farm sales and business. We're glad you're here.
00:00:26
Speaker
Welcome to the Direct Farm podcast.
Guest Introduction: Tara Johnson
00:00:28
Speaker
We've got a great conversation for you today with FFI, also known as the Food Finance Institute. I am delighted to welcome Tara Johnson, founder and director for the Food Finance Institute. Welcome, Tara.
00:00:44
Speaker
Oh, thank you. It's great to be here. So great to have you here. I'm really excited for this conversation.
Vision Behind FFI's Founding
00:00:51
Speaker
So as the founder of the Food Finance Institute, tell us a little bit more about your vision behind starting this organization. What needs were you trying to meet and how it was founded? Just a little bit more about the background.
00:01:04
Speaker
Sure, sure. So I founded the Food Finance Institute at the University of Wisconsin. And I did that after I sold my company. People know me as the person who founded Terrace Way, the brand Terrace Way, which is a way purging product that you would find in a hippie co-op or Whole Foods anywhere in the country. And after I sold the company, I was too young to retire, basically, and trying to figure out how I wanted to
00:01:33
Speaker
make a difference in the next chapter of my career. I realized that I learned so much about money doing Tara's Way. I had to raise $14 million to start that business before we had any sales, which is not an easy thing to do, right? And so I learned, you know, whether I like
00:01:53
Speaker
the process or not, I learned a lot about it.
Importance of Financial Skills for Farmers
00:01:56
Speaker
And I realized that that skill was something that gets in the way of a lot of farms when they're trying to grow their business and even when they're starting, but even more when they're growing, right? And wouldn't it be great if I could work with farmers who are trying to do that on helping them raise money and achieving their vision?
00:02:17
Speaker
So I went to the university and pitched it and they said yes. So that was 2013 and here we are.
FFI's Mission and Evolution
00:02:26
Speaker
When I first started, I said, our mission is to make sure that every value-added farmer, food entrepreneur, and food system enterprise that wanted to raise money could do it.
00:02:39
Speaker
that is a lofty goal, right? But I feel like visions need to be inspiring and lofty, right? So that was my vision at the time. And how I executed on that initially was I started consulting. So I started working with farmers and food entrepreneurs
00:02:57
Speaker
And soon realized there was kind of an infinite need for the work that we do because it's such a problem for so many enterprises. So then I said, well, what could I do next? One solution was to hire more consultants, which we've done. But I also spent a lot of time thinking about the process that I was always going through with clients to help them raise money.
00:03:21
Speaker
And then I said, is there a way to accelerate that? And so that was what got me to create the boot camps that I run around the country now. Well, now it's all virtual, right? But I was on airplanes a lot and other, I call those immersion training. And by immersive, I mean, it's training and consulting bundled together intensely. So other.
00:03:43
Speaker
immersion trainings. We have one that is specifically for raising equity because I feel I went through that as an entrepreneur, you know, you have lofty things, you have a lot to get done and you don't want it to take six months. You don't have six months, right? So I always wanted
00:04:00
Speaker
I wanted things that were challenging and that would move me through something that I needed to do really efficiently. And so that was that spirit that went into designing the immersion stuff that we do anyway. A few things. I love how it's a passion project of yours that you have experience going through some of those pain points that farmers are going through currently trying to start a business.
00:04:25
Speaker
having a stable business year over year. And then also that you identified the need, you found a way to meet that need, but you started small too and you evolved over the years.
Partnerships and Support for Diverse Businesses
00:04:36
Speaker
So tell us a little bit more about your partnership with the University of Wisconsin System Administration.
00:04:43
Speaker
How are you able to partner with them, work with them? I understand that you're part of the business and entrepreneurship program. So how do you support businesses as they're trying to achieve that financial stability with their business? Yeah. So the reason I wanted to do this at the university was usually in the private sector, if I were billing out for what I do, it's kind of like being an investment banker. So it's very expensive.
00:05:13
Speaker
And farmers can't afford that, right? And years ago, the path was you'd go to your bank, you get a loan, that was kind of it, right? Like it was kind of straightforward. It's not that way anymore, but they can't afford to pay for that kind of service. And I'm in a position because I sold my company that I could say, you know what, what if we did this in a university? So I don't have to be charging investment banker rates to do the work that I do.
00:05:41
Speaker
And the Institute for Business and Entrepreneurship is a great home for us because the Small Business Development Center is located in there. There's also something called the Center for Technology Commercialization that works on innovation and does a lot of work on helping companies get SBIR funding.
00:05:59
Speaker
And there's some research data groups in there, too. So there's a lot of other resources that I can bring to bear because I'm where I am, right? And we have a big university behind us, too. So if we are doing grant writing, which we do, to fund some of our programs these days, we have this whole apparatus behind us who knows how to implement that. And that's great because then I don't have to develop that. It's been a really good partnership.
00:06:28
Speaker
And the university has been excited about it and very open to my working, not just in Wisconsin. So that was important to me because the need for what we do is national, probably even international, right? But it's not a, it's not a local thing. So we certainly do work in Wisconsin and we work in other states too.
00:06:48
Speaker
That's great to just have the access to those resources because it's more than just, okay, read a blog. This is how you start a business. But giving that one-on-one coaching, the consulting, and then having the university be able to provide you with additional resources or support there too. So tell us a little bit more about the clients that you serve. You work with various businesses representing different industries. So what types of farms and what types of other businesses do you work with through FFI? Yeah.
00:07:17
Speaker
So I tell people that we don't do conventional farms. And I say that because there's so many resources out there. If you are a conventional dairy farmer or you raise corn and beans or, you know, those kinds of farms because there's extension exists to help folks like that.
00:07:36
Speaker
Where we come in is when people start doing value added, or they're starting up completely value added. It could be a fifth generation orchard that suddenly realizes that if they want to pass this on to a sixth generation,
00:07:54
Speaker
they can't just be selling apples to the packing house anymore. They're going to have to add value somehow and maybe they're going to make juice or maybe they're going to make open a cidery or something like that. Like that's when we get involved because that's where our expertise is in helping what I tell people you're becoming a CPG company when you do something like that, right? And that's
00:08:17
Speaker
that intersection between agriculture and CPG is what we're really good at. And so we work with farms who are in phases like that. And then we also work with food brands who are in, you know, trying to do the same thing, essentially. We also do some work I call a food system work because there are initiatives that tend to be nonprofits, but not always, that are trying to solve
00:08:42
Speaker
gaps in the supply chain or social impact, you know, access to neighborhoods that have problems with access to good food and things like that. They're trying to solve this food system problem. We do work with them too, because they're kind of all part of the ecosystem of food.
00:09:01
Speaker
Yeah. And I think it's so important to you to touch on the collaborative aspect of it, both on the producer side, but also like you touched on, on the buyer and the consumer side, it's, it's education too. So kind of bridging the gap there with your collaborative network. That's I think a great resource for folks who maybe are looking for a mentorship.
00:09:19
Speaker
or others who are looking for resources and tools, it combines the best of both worlds. Tell us a little bit more about that and how the businesses or the clients that you work with are able to take their business to the next level by having access to that collaborative network.
Consultant Training and Scenario Planning
00:09:34
Speaker
Sure.
00:09:34
Speaker
So this was kind of early on too, when I came to the epiphany that the business model wasn't going to be just hiring a bunch of consultants, right? Which it could have been, but I was like, how can I collaborate with people who are already out here doing this kind of work? And
00:09:50
Speaker
So we wrote a federal grant that we got to do consultant training. So what I realized was people didn't really know the kind of finance work that we do, but they, they know some they're already working with plenty of farms around the country. Right. So what if we went and did training with them? So I designed his training and I took that on the road.
00:10:14
Speaker
And that has become this amazing network around the country for us. So we've got, I don't know the exact number, but it's well over 100 people that I've
00:10:25
Speaker
trained around the country and they exist now as a network. So if a client comes to us and they're in Colorado, right? We're not in Colorado, but we've worked with people in Colorado, right? So we can connect people with the best resources. And now the other thing is actually COVID accelerated this. It kind of doesn't in some ways matter where you are for some of this stuff.
00:10:49
Speaker
anymore, right? So we can connect people with like, what is the best accounting firm we found who can work with this kind of business, right? Like what, for example, a scaling food business that's going to raise a lot of equity needs a certain kind of
00:11:07
Speaker
Like they need rigorous accounting and fractional CFO work, right? We know where we can send them because of this work that we've been doing. So it just really amplifies the effectiveness to have this collaborative network around the country, both because it enables us to work with people from around the country, but also because it kind of brings this best practice to the work we do.
00:11:32
Speaker
And just like you touched on too, it's been an interesting year to say the least. So trying to figure out how to navigate, you know, when people are, we're all online. So trying to have those trainings go virtual. And also in addition to that scenario planning, because there are so many unknowns right now, thinking about the future, but also thinking about the past this past year, a lot of businesses had to pivot and go down an uncertain road that maybe they didn't have experience or
00:12:00
Speaker
were unsure of where it would lead them to. So maybe tell us a little bit more about how you approach scenario planning as you are training and mentoring these clients. That's awesome question. When COVID hit my, cause I have this network of people I work with around the country, right? I was like, I gotta get the network together because things were
00:12:22
Speaker
devolving so fast, right? So I started a huddle every Monday. I was like, okay, I'm going to get, I'm just going to be on, we're going to talk about what's going on and what it means for our clients. And
00:12:33
Speaker
I had one for entrepreneurs too. So I did that and it became really clear to me that we needed a way to do scenario planning because there was so much uncertainty. We were sort of in that place before COVID, right? Between climate change and changing food.
00:12:52
Speaker
preferences and consumers and stuff. But then COVID came, it's like, no, we have to look at like, if COVID goes this way, what are we going to do? If it goes that way, what are we going to do? And scenario planning is, that's what it does. It's meant to
00:13:05
Speaker
help people plan to have these scenarios. So I said that on my huddle and some, one of the consultants who happens to run an impact fund on the East coast said, well, that's what I do in my consulting practice beyond what we've worked on together with the fund. I'm like, okay, we got to talk. So we talked and he's, he's, turns out he's trained by like seminal thinkers in the world of scenario planning at Harvard and
00:13:34
Speaker
and really understands it. And scenario planning is usually something that very big companies do, right? Like huge teams and Exxon would do scenario planning, right? The military. But I was like, what would it look like if we created an online thing and we had multiple companies go through it together or farms come and do it together?
00:13:57
Speaker
It wouldn't be this like think tanky retreaty thing that is sort of an elitist thing, but it's something for like your average food entrepreneur or farmer. And so we took the process that he used and Eric did an amazing job helping us translate it into something that we could deliver online and make accessible to a much, much broader group of people. And it's an amazing thing.
00:14:25
Speaker
Cause I've had a business career. We've been through strategic planning where it was like, oh yeah, we kind of talk about, you know, goals for next year. Really wasn't very strategic. It's just more like operational planning. And this process makes you strategic thinker. It's building this muscle for doing that. And it is amazing.
00:14:44
Speaker
So I'm super excited that we implemented that. We actually just finished our second group yesterday. And yeah, it's terrific because you leave not just with one plan. That's what's so different, right? You leave with a way to think about planning and uncertainty and a couple of different paths that could all three equally be what the future is for you.
00:15:07
Speaker
But you have a way to understand, okay, if this future is what happens, then we're going to do the following things. Or if this future is what happens, then we're going to do the following things. And you can see people's anxiety just go down, right? Because now it's not like this nail biting. Oh my God, what are we going to do? If you know what I mean? Cause we don't have a plan and everything is changing and that.
00:15:32
Speaker
causes massive anxiety. So it's very cool. I'm really glad you brought that up because it's a new addition to what we do that grew out of COVID that we're going to do it all the time because I think it's really helpful for people.
00:15:46
Speaker
Yeah, I think it's just timely, you know, just thinking about what we've been through as a society, throughout the economy, everything that's been happening. But if you think about it, really, there's uncertainties anytime you start a business. So being able to start it now, but also knowing that, you know, you've had great success with these businesses and how they're learning to pivot quickly and plan for the future, even a year from now when, you know, there could be other things that are uncertain in their business. So that's what we tell people. And it
00:16:15
Speaker
And it gives, it absolves you from feeling as a leader that you have to be able to anticipate the future. Like when you run businesses that often, and entrepreneurs, right? Investors are asking you, like, well, what is this going to do? It's a source of a lot of anxiety, I think, for a lot of entrepreneurs. And for farmers, you know, they're dealing with
00:16:38
Speaker
Climate change, that's not going to change. It's going to get worse, right? Like, how do you build a resilient farm business model when you have to face climate change? I mean, that in and of itself is a reason to go into scenario planning, right? Because you're going to have different scenarios for what is going to be possible on your farm.
00:16:57
Speaker
Yeah. Yeah. I kind of want to talk a little bit more on the consultant side because obviously you have the consultants, they're training these clients and the businesses and the farmers. This is how you approach scenario planning, but you have to also train your consultants to be prepared to have those conversations with them. So what steps do prospective consultants need to take as they become trained and certified and how does the consulting training process work?
00:17:24
Speaker
Sure. So I do these consultant trainings. I did a lot of them initially because we were rolling out the program, but I do them a couple times a year. It's all virtual and it had gone virtual. This part had gone virtual even before COVID for the most part, because it's a selective thing of people around the country. But people who work in this space, who want to know more about finance in particular,
00:17:48
Speaker
Well, there's, I call it the 1.0 level, which is actually quite intensive. I, I tell people, I have two kids who went to MIT and another one who went to the university here. They're very smart people on my kids. And I tell people my philosophy when they were little is I don't want to be the filter about what people know and what they should be able to learn and what they can't learn at any one point in time. Right. Cause I think we dumb down the universe when we do that.
00:18:17
Speaker
So I teach pretty intensely, right? And then people learn what they are ready to learn out of it. And for some people they can, they're ready for a lot of it. Some of them learn pieces of it. So I've had people tell me, you know, maybe you should just come back and do the same thing again, because I think I'd be ready to learn something more. And I've actually had people join subsequent groups because they wanted to do that, which is totally cool with me.
00:18:44
Speaker
And then now I'm developing and about to take out a next round, like the 2.0 training. And so things like working with people coming out of scenario planning because it's a new program for us, well, that'll be part of it. And things like how do you finance
00:19:02
Speaker
processing businesses, that's a thing that has come out of COVID, right? That people are looking for more locally processed meat is a big example. And understanding how you finance that is different than other kinds of businesses. So that's an example of a topic that will be coming around with the next level of training. So
00:19:24
Speaker
Yeah. And a lot of those folks, I do a mastermind group, so they stay in touch with me. We're kind of like raising each other's boats as this goes on, right? And it's super cool to see people's consulting practices evolve as I've been engaged with them. It's just awesome to see.
00:19:41
Speaker
That's great to see the growth in how you've evolved. You've taken the feedback of the clients, but also the consultants too of where's the need? How can we prepare you to prepare others as well? We couldn't accomplish anywhere near this if we did not have this network, the collaborative network you mentioned before. That's what enables us to do the amount of things we do.
00:20:01
Speaker
And then in addition to that, you have this digital resource hub. You have the educational content. You also have a paid version with additional resources, trainings. You have a community of practitioners. So you are providing multiple resources and avenues for clients to get the information that they need to be successful.
00:20:21
Speaker
And you also have Edible Alpha, which do you want to share a little bit more about that as well? Sure,
Resource Highlight: Edible Alpha Podcast
00:20:27
Speaker
I'll share. So Edible Alpha is my podcast. I'm always thinking about like, how do people want to learn, right? Like, it's not the way people used to want to learn necessarily. And so I thought
00:20:37
Speaker
what a great way to get content out to people who are going to learn that way. So I started it a while ago now. So I was kind of early to the podcast world. And I have been amazed at the quality of the content that is coming in these podcast interviews in the sense that I pick people who are entrepreneurs or farmers or
00:21:00
Speaker
Anybody in the financial ecosystem around them like so lenders or investors or funds or, I don't know, turnaround consultants like all of the people who would be doing
00:21:12
Speaker
the ecosystem and I interview them on the podcast and it's been really useful material so I think they're really useful for people to just listen to. It's wonderful to be able to take portions of it and then deploy it into curriculum. I tell people there's no textbook for what we do, right? It's
00:21:33
Speaker
comes out of experience and it's changing like right in front of us. So we need vehicles for educating that, keep up with that. And I find a podcast is a really good way to do that. So Edible Alpha has proven to be a really good resource for people. At least that's the feedback we get. And we've had, I don't know, we're probably, cause we've been at this for awhile. I think we're probably hitting something like 45,000 downloads.
00:22:01
Speaker
Wow, that's awesome. And just thinking about the next generation of entrepreneurs too and how, like you said, people learn differently now than they did 10 years ago, 20 years ago, et cetera. So trying to meet people where they're at and trying to teach them in a way that makes sense to them and how they can glean helpful tips or best practices and apply it to their business too. So are you finding that kind of the younger generation is able to absorb this information through the podcast or some of these other digital channels as well?
00:22:31
Speaker
I would say though that us older folks have come along.
00:22:36
Speaker
So, you know, I'm really conscious about embedding it into other things that we do. So in consultant training, I'll be like, okay, so this is the following 10 podcasts where we covered this. So you may be interested in listening to it. And then they listen to it themselves, but then they also share it with clients. So it becomes a tool for them to teach also in their client work.
00:23:03
Speaker
So it's been super helpful to the whole network because of that. That's great to see that it's beneficial to everybody. I think podcasts are a way that people can be doing a task, listening in and still absorbing information. Not everyone has cable. They don't have TV or maybe they don't have access to a computer all the time, but pop in a podcast while you're doing the dishes or something and you can multitask at the same time. Yeah.
00:23:32
Speaker
And in rural areas in particular, that's an issue, right? The bandwidth can be an issue for rural areas. I love the accessibility of podcasts. How would you describe the conversation amongst both your clients, but also your consultants as well? We touched on earlier last year, the many uncertainties going kind of into this year as well. So how has the pandemic affected how you train your clients and how your clients are able to operate their business in this time?
Impact of COVID-19 on Farming
00:24:00
Speaker
Yeah, well, I think the pivot to online has been, you know, something that we're all seeing and all dealing with, right? What's been fantastic is, so some of our clients, our farms that we work with were already online before COVID, right? They had made that leap. The ones that had already been online, their businesses exploded.
00:24:22
Speaker
So they had more business than ever, but that, you know, you can grow too fast too, right? So you grow too fast. You don't have enough working capital to keep up. Like ironically, you can, you can grow yourself out of business if you grow too fast. So we had a group of people.
00:24:40
Speaker
who were in that situation because of COVID. The other group I would say would be people who weren't online before. The learning curve is big, right, to get online. We don't really have a good website. We don't have a shopping cart. There's all kinds of things that need to get put into place. And then understanding how to use social media to do the promotion effectively and all that kind of stuff. So that whole area of digital
00:25:09
Speaker
deployment, if you want to call it that, was a huge topic this year. Capital-wise, how are we going to stay in business? I had people who literally had 100% of their customers because they did restaurants, right? Farms that would supply restaurants.
00:25:27
Speaker
evaporated, right? So that's the turnaround skills. Like how do you, how do you work with people about basically hoarding cash, right? To try to build a strategy to keep yourself in business financially until things improve. We did a lot of that kind of work. And I don't think we're done. I mean, we, you know, PPP and EIDL came at the right time and they'd been super helpful.
00:25:51
Speaker
and they've kept people going. There's still a lot of uncertainty. I feel like it's like a few months ahead of us. Some of the dark underbelly of this hasn't really been apparent yet. So I mean, sadly, I think it's coming. So we still work with everybody on all of that. And for me, if you've got a 13-week rolling cashflow statement that says you're not going to run out of money,
00:26:16
Speaker
And you have like a trajectory that looks like it can work and maybe some of these scenario planning kind of skills that help you to adapt. Like that's kind of the sweet spot of where you want to be right now.
00:26:30
Speaker
Yeah. Is there a success story that you have in mind of a client who was able to pivot their business model, go online or experience success in a time when a lot of us were like, where's this going to go from here? Sure. So they already did have an online store, but they didn't deliver direct to consumer. So they had to pivot, which doesn't sound like a big deal, but it's actually a big deal because now you've got to actually
00:26:58
Speaker
pack individual orders, right? And you have to figure out shipping and you have to price for shipping and you got to make sure it actually works and that FedEx will show up at your, which seems like it would be easy, but it's not, none of this is easy. And so they managed to.
00:27:14
Speaker
In, I think it was like three weeks, they sent out a thing, not delivering anymore. You can order it and it'll come in a FedEx box. And they pivoted really fast. And I think their business was up like 200, 300%. And they weren't little before. I mean, they were decent size.
00:27:34
Speaker
That was a very big shift because one day shipping FedEx from their farm can get them to Chicago and Minneapolis, right? And Chicago, that mantra market is 10 million people. Minneapolis is six.
00:27:50
Speaker
And then you add on Madison and Milwaukee, right? Now we're, I don't know, 18 million, 20 million people within a day shipping, right? So that is really different than the county they live in. Yeah. I mean, it's great to hear because one out of three are, you know, shopping for food online and that trend continues to go up into the right. So especially now it's the time, like you said, to get online and if you're not,
00:28:16
Speaker
trying to figure out a way if that's a viable option to you. There's a lot of open green pasture there in terms of the market. So it's kind of untapped at this point. So being able to serve your local community and experience big success there too, especially with restaurants closing down and other businesses too. So trying to pivot in that time.
00:28:38
Speaker
What would you say would be, I guess, your preferred resource or tool, or for farmers specifically, what would you recommend for them?
Strategies for Long-term Farm Viability
00:28:47
Speaker
What best practice or advice would you have for farmers during this time? You know, farmers, it's interesting. If you're a food company and you go to a bank, if you don't have a three-year performer that is, you know, forecasting out for three years, you don't get money.
00:29:02
Speaker
They're like, nope, we need to see this in order to write. In the farm world, if you go to an ag lender, they'll like, well, what does your cash flow for the next year look like? They may not even require a lot of documentation. That worked really well in a time where you didn't have all this uncertainty, but now we have all this uncertainty. Actually, I think the banking community is doing everybody a disservice and not pushing back and saying,
00:29:28
Speaker
No, no, we really want to see what this plan looks like, right? Financial plan looks like in more depth, right? So it isn't just your budget for this year because there is so much uncertainty and we have to be prepared for change and the money side of it, right? In a way that we never had to before.
00:29:46
Speaker
I use a tool that is a pretty comprehensive annual cash flow forecast, but it's something that I think it's approachable for people who have been farming. This is probably more detailed than they're used to. Then we help people turn that into something that goes for three years.
00:30:06
Speaker
you get more foresight into the money side of your farm. So that would be one thing. And then the other thing, I think this is all emergent, but opportunities to just maximize the ability to take advantage of conservation services, revenue streams.
00:30:25
Speaker
They're going to be more and more of them, right? They're, they're coming right now and they're going to be more of them. And I look at farms that I work with and they're not even really using necessarily things that already exist. Like EQIP is an example of, of NRCS program that is a cost share. So they, they match 50 50.
00:30:47
Speaker
And you can use that for fencing and movable fencing and planting pastures and all kinds of things that farms do, the kinds of farms that we work with do. And they aren't really being entirely utilized, right? So I think moving forward as we're all going to be trying to make our farms more regenerative and also just more resilient in the face of climate change, it's not just a cost, it's actually going to become a revenue stream for farms.
00:31:15
Speaker
I really encourage people to take advantage of that. I think you brought up a great point of the cash flow and how important that is. It's not just, okay, you have money in the bank today, but what does your financial situation look like a year from now, two years from now? Are you able to sustain throughout this time?
00:31:36
Speaker
So would you say that in terms of recurring cash flow, have you noticed that farmers are adding in delivery or subscriptions or other ways or avenues to ensure that they have that cash flow long-term?
00:31:49
Speaker
Yeah, that's interesting question, right? So this goes with that maturation of getting online and having the plan for how you're going to sell online. I think like the CSA model of prepayment and you get a share, right? What I tell farmers is that the consumer is getting accustomed to that, right? A certain set of consumers is.
00:32:13
Speaker
And that's paying ahead of time, great for cashflow, right? Spreading the risk. There's a lot of great things about it. And there are ways to translate that into other things. So people are like, well, I do meet. Yeah, you do meet, but people will do a CSA for me, or they would do a subscription for me, right? Or you could put $500 upfront and then you order from a shopping cart. Like you could do these things with consumers.
00:32:39
Speaker
I think a surprising few farmers have actually implemented things like that, but other than CSA, which people seem to understand. So I think it's kind of like, let's spread that out and make it more ubiquitous in how farmers go to market. It would help them so much if they did that.
00:33:01
Speaker
For sure. And even thinking about value-added products or partnerships with other farmers too, you don't have to limit to just the products that you have available on your farm. If you're able to partner with another local farm and work together, then that's another option too. Totally.
00:33:17
Speaker
Yeah, totally. Yeah. Other farmers, other products, you don't have to make all the products. You know, actually the hard part, I think, is building the customer base, actually, like that, that exercise of getting good at that is the hardest part for people, I think. And so
00:33:36
Speaker
Once you get good at that, then that's like gold because now you can bring in other products that you may not, you know, you don't need to do, maybe you don't do lamb anymore. You work with somebody else who does lamb, right? And you can get more efficient at pigs or I don't know, right? There just opens up so much as you start building up that consumer side of your business.
00:33:57
Speaker
We oftentimes talk about the four levers for farm success. So that's the price, the quality, brand, and convenience. And I think sometimes it's so easy to lean in on quality. Okay. We have a great quality product, but then like you mentioned that missing piece of brand. So how do you market it? It's a great product, but you have to be able to tell people about it and share your story and price it at the right price. Because if you undervalue your product long-term, how are you going to sustain as a business?
00:34:24
Speaker
And then you also have to know your market. So providing those convenient options too is critical. I'll never forget. I was doing a bootcamp in a really rural area in Wisconsin, and there was a pig farmer there who has just beautiful Berkshire pork. I mean, just great, right? She has a CSA and she's selling online. And one of the things that people do with me in bootcamp is a differentiation exercise where they list their
00:34:52
Speaker
competition and I make them look at how much they charge for their product compared to and whatever other attributes. So she came to me and said, oh my God, I realized when I did this research that I'm charging like half of what people are charging, right?
00:35:11
Speaker
And it's because if you ask your neighbor in rural Wisconsin how much you're going to pay for pork chops, they're going to tell you a very low price, right? They're going to tell you commodity at the Piggly Wiggly. Yes, that is the name of a chain of a grocery store. So yeah, but that's not Berkshire pork. That's not heritage pork. That's not, you know, lives a life outdoors in deep bedded pens. Like there's nothing of that in that pork, right? So.
00:35:39
Speaker
I think that whole thought process is hard for farmers of how much is what I make worth, right? That idea is really different and they talk to their neighbors at church or whatever and they won't, but that's not your target consumer, right? So that's this whole CPG way of thinking that is so different for farmers, right? We're not just taking it to the
00:36:05
Speaker
grain elevator anymore and getting the price of the day, right? It's with no, no differentiation. So knowing your market, cause I think sometimes it can be overwhelming and you're trying to be all things to all people and you're better off focusing on your local market where you're able to price your products at what they're valued by the consumer. And you're able to meet them where they're at and have a business that's thriving because you're able to see that value and provide that value for your consumer.
00:36:31
Speaker
But it's a targeted group. It's strategic. I mean, the sad part is for a lot of the people we work with who are in really rural areas, they can't sell locally. You know, there are fewer people in Iowa now than there were like 20 years ago. Yeah, if you're not in a real rural state, you don't realize what's been going on has been contraction.
00:36:52
Speaker
And they won't pay a premium, right? So people like that have to go somewhere else. So I spend a lot of time helping people identify, well, who is your target consumer? Are they here or no? Then you gotta go where they are. You have to figure out a way to go somewhere else. Depends where you're located, right? For farms around Madison, no problem, right? We've got enough people here where foodie culture will pay ridiculous amounts for food on this.
00:37:21
Speaker
So yeah, so it really depends. Before we sign off, Tara, is there one final piece of advice that you would like to share? Sure. I was in a
00:37:32
Speaker
a visage group when I did Tara's way. But one of the really wise people in that group, he took his electrical contracting firm from over from his dad. It was two trucks. And now they have over a billion dollars in sales every year. So this one person now, he's been at this for 40 some years. And he said to me, Tara, it's not about you, it's about your team.
00:37:54
Speaker
And I was like, huh, okay. You've got a startup. You can't hire everybody, but you can still have a team. That guided me so much when I did Tara's Way and it guides what I'm doing right now. And I love to see that happen when entrepreneurs go, Oh yeah. You know, I can surround myself with people who are going to be on my team. I don't have to hire them all in the beginning. You can't. And it is for all of us. It's about a team.
00:38:23
Speaker
For sure. Yeah, we're in it together and it's the collaborative aspect. It's the partnership aspect and knowing that you have those resources, not only the tangible resources, but people too. You know, other people to bounce ideas off of too. That's truly valuable. Well, thank you Tara so much for the conversation today. I truly enjoyed chatting with you.
00:38:43
Speaker
Oh, me too. It's been great. Yeah, this is terrific. I want to extend my thanks again to you, Tara, and the entire team at the Food Finance Institute and the Institute for Business and Entrepreneurship in the University of Wisconsin System. At Barnetador, we are delighted to partner with colleges, universities, organizations across the country to support farmers as they look to grow their farm business.
00:39:06
Speaker
For more information on FFI, you can visit their website, foodfinanceinstitute.org. And to learn more about Barn to Door, including access to numerous free resources and best practices for your farm, you can go to barn to door.com slash resources. Thank you for tuning in and we will see you next week.