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Posted on November 11, 2021 @ 07:19:00 AM by Paul Meagher
I was browsing The Lean Farm (2015) by Ben Hartmann this morning and thought I would share his 4 principles for starting a lean farm:
- Put in your 10,000 hours (Develop Personal Capacity First)
- Test in Small Batches
- Add Infrastructure Capacity in Small Increments
- Avoid Bad Debt.
Ben and his wife claimed to have followed these principles as they were starting up their farm. They didn't know about lean thinking when they did so but found that their principles jived with lean principles.
Their first principle alludes to the 10,000 hour rule for acquiring expertise and is not unique to this book. You basically have to put in the time acquiring the necessary skills. That
will probably involve making alot of mistakes. The second principle, test in small batches, protects you from making mistakes you can't recover from while you are still learning. The idea of testing in small batches advises you to only develop enough of the product to test your market for the product. Don't plant a field of potatoes without knowing whether you have a customer willing to pay a decent price for them. Start with one or a few customers and a smaller volume of potatoes. Related to testing in small batches is also not adding infrastructure before you need it. Don't buy all that equipment for planting, harvesting, and storing potatoes right away. Use hard labor, cheap equipment and cheap storage to get started and invest more if there is reliable demand for more of what you are selling and ideally some financing from what you have sold. If you test in large batches, add infrastructure capacity in advance of need, chances are you will acquire bad debt. The principles are very interrelated and seem like good advice for those starting up businesses in general.
Chances are you will acquire bad debt along the way because making mistakes, some of them financial, is a part of the process of learning. One of my bad debts was the purchase of a 1985 Massey Ferguson 699 tractor, with a 95 hp motor. I thought I needed the tractor because my smaller 135 Massey Ferguson didn't have enough power to run a 6 foot flail mower I needed to use to mow my wild blueberry fields once a year. I paid $7000 for that tractor and have gotten very little use out of it and a few big repair bills. Currently, I can't use it because the last time I started it the power steering was very slow to respond. Might be air in the lines or it might be something more serious. I thought that being self-sufficient was important, but failed to recognize that I really only needed to use the tractor once a year and I could borrow my father-in-laws tractor when that day came, which I did on tuesday of this week. I thought I was adding infrastructure capacity that I needed when I would have been better off borrowing or renting a tractor/operator for a day of mowing each year. Another issue when you buy a tractor this big is where you will store it inside if you don't want to leave it outside all the time. I didn't really think about that issue when I bought it. This year I allocated the covered space I used to store it to another use so currently, and for awhile, it will reside outdoors.
One unexpected upside of owning this tractor is that, in the context of our heritage farm, it is a photogenic tractor. I have placed the tractor prominently on the concert grounds during our summer concerts and many people have taken pictures while on it and beside it and it has appeared in news stories of the concert and artists promoting themselves. We landed out first wedding in our barn next year and I'm sure they would like to take some pictures on or beside it. Not sure if that delivers enough value to make it worth owning.
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Real Estate Land Development in Affordable New Housing
