Business Management2024 has proven to be an exceptionally challenging year for family farm operations across the country. Margins have shrunk to the point where profits are minimal or even non-existent for many. If you want a different outcome in 2025, it's clear that something needs to change—not just in the market, but in how you run your business.
In this blog, we'll dive into the most common mistakes that keep farmers from growing and evolving. These could be the key to turning things around for your operation.
One of the biggest challenges facing family farms is the tendency to stick with old strategies, even when they're no longer effective. Despite a tough 2024, many farmers will head into 2025 doing exactly what they've done in previous years, hoping for a different outcome. But let's be honest: has that approach worked for you in the past? For most, the answer is no.
The reality is, the longer you resist change, the more painful your business situation will become. Economic conditions evolve, markets fluctuate, and farming practices need to adapt accordingly. Take it from personal experience—sticking to familiar methods out of comfort can be costly. My own family's farm struggled because my grandfather tried to run things in 2005 the same way he did in 1975. The economic landscape had changed, but our operation didn't.
The lesson here? Change isn't optional—it's necessary for survival.
Another common issue is relying on bank loans to cover losses year after year. While restructuring debt might be a short-term solution, repeatedly "terming out" losses without addressing the root cause can be dangerous. If you've done this more than two years in a row, it's time to reassess.
Many believe that more money will solve their problems. But if throwing money at an issue hasn't fixed it, money isn't the real problem. When you continuously roll over losses, you're eating into your farm's equity—equity that your family may have spent generations building.
If your banker isn't pushing back or asking tough questions about why these losses keep happening, it might be time to find a new one. A good banker will challenge you to identify the core issues in your operation, not just sign off on another loan.
Many farmers aren't as financially organized as they should be. Without a clear understanding of your cash flow and expenses, it's impossible to identify where you're overspending. Too often, farmers only update their balance sheets once a year because that's all their bank requires.
At Legacy Farmer, we emphasize monthly cash flow projections and regular updates. This kind of detailed tracking allows you to spot inefficiencies and unnecessary costs. For example, you might discover you're overspending on fertilizer or equipment simply because you haven't compared prices or evaluated alternatives.
Our customers have saved hundreds of thousands of dollars just by getting their finances in order. Knowing your numbers isn't just for knowing where to cut costs—it's so you can gain control over your business.
Everything we've discussed in this blog is exactly what we address inside Legacy Farmer. We've helped hundreds of family farm operations achieve financial clarity, stop unnecessary spending, and build sustainable, profitable businesses.
If you're ready to ensure that 2025 is different from the last few years, we invite you to check out Legacy Farmer. Click the link below to schedule a free call with our team. We'll dive into what's working, what's not, and where you want your farm to go in the future.
It's time to take control of your farm's future. Let's make 2025 the year you turn things around.
