Profitability is becoming more of a fight to maintain for most farmers - but are any prospering?
Traditional farm profits are currently fleeting.
Over decades, major multiples have aggressively seized the agricultural produce retail markets, leaving direct farm sales marginalised.
The commercial power of few has been consolidated over the years.
Do you currently own a farming business?
Where does this problem leave you in the current economic climate?
Like many who are getting squeezed out, you may be feeling the tightenings of financial constraints closing in on your farming enterprise in such lean fiscal times.
What is the answer?
How can a farm business like yours bounce back with increased profitability?
According to credited academic thought leaders in business management, Lund University, you've got to be willing to do things differently...
"The need for finding a differentiation strategy is rarely as high as it is for a company finding itself in a mature industry...growth rate is slow and competition is tough. The request for innovation is therefore large; companies are forced to finding new approaches and ways of doing business." - Patrick Roos
Can the request for innovation be a rather silent cry?
As in the case of small farming in the UK and similar marketplaces, many farmers feeling such pressure are left without new ideas to diversify resigning to the thought that they are unable to make a change.
The main foe here is fear.
It cripples thinking bigger & broader and the willingness to try something new.
Where fear grips a business owner, things can get very pressured, very quickly.
Confidence for overcoming of the challenge wanes.
The results can be crushing...but where's the release? Right here!...
This is the fuel to the fire of innovation.
Begin your learning journey toward farm business innovation today and overcome the financial pinch.
Direct is best - get the mastery
The problem of profit erosion in the commodities markets is the concentrated bargaining power of middle men.
Supermarkets and other mass market retailers have invested in taking over and now own the market share.
Producers, on the other hand, are left without.
Entirely dependent upon the reach of their dominating commercial partners.
How to do you turn it around?
Cut off the dependence and get independent.
It's no secret that direct sales yields the greatest profitability, when done well.
The only hesitation to attempting direct sales will be the fear of not attracting a big enough crowd.
In a word, failure.
But ask yourself the question, "why shouldn't we generate a big enough crowd of buyers?"
Communication is all it takes.
Once you can read what your consumers are looking for and why - then you're just steps away from drawing them in.
All you need is a little facilitation from the right tools to get things going.
Whilst traditional approaches to mass market communications are costly and variable in effectiveness - there are newer techniques offering irresistable returns.
Online retail for farmers particularly offers a very cost effective method of generating direct sales.
Simply set-up an eCommerce website, stock it up and drive your buyers to it by quality content and social media conversations.
Sure, it requires personal sacrifice of time and involvement, but at the end of things, the ownership of the sale is completely yours.
A most important plus point.
Think in a transferable manner.
When you examine business ideas and stories - think..."how could I make that work for me?"
It doesn't have to fit first off, but with a little customisation, an otherwise unsuitable appearance can really match up delightfully.
Parallels reveal principles which work.
Business is about serving others. Not just serving your customers either, but all stakeholders (suppliers, staff members, investors etc.)
Where business owners do this well they survive every challenge.
Take note from examples you see in the media of notable the responses and turnarounds from your peers in escaping economic threat.
You'll be greatly encouraged to make a difference too.
Become detailed in knowledge on how everything works.
Especially those things outside of your remit.
This brings understanding to the table from the highest levels within your business and allows for more fruitful considerations on improvement.
Innovation is often opened up by a new technical advancement in one way or another.
Typically the early adopters of such advancements benefit from what is known as first mover advantage.
In other words, being the first to utilise an advantage in the market place can give a business the ability to get ahead whilst others strive to catch up.
It's not always the way that technology equals improvement, but is often the case.
Also, technical doesn't necessarily mean technology.
It could just means getting a firmer grip on the detail on how things are done properly, with the right results.
Embrace depth and breadth.
Don't be blinkered.
Why look to reinvent when it's all been done before.
If you look far and wide enough you'll stumble upon the right solution for advancing your business to greater profit.
Case studies are a great resource for finding out the secrets to success of all kinds of business.
Utilise a platform like SlideShare for delving deep into business cases studies. You can find so much on there to feed your campaign ideas.
Let's get you started with this case study on how a paper manufacturer burrowed there efforts into exploring a niche product application within the BBQ industry to great success...
"This chart shows the ramp up in sales of Pink Butcher Paper since the content initiative began, bringing in more than $250k on this product alone." - Courtesy of Sprout Content
The most astounding aspect of the study is it's title - "How 6 Blog Posts and a Landing Page Brought in Over $250k..."
They hired no additional staff, only the services of a marketing consultant to lead them into the approach.
Consider the ROI...
...sure the success did not come overnight, but steadily over the course of about 18months of consistent blog post publishing via their website.
Their efforts were worth it.
Today, those same posts continue to serve a growing online audience in this marketplace, continually filling up their sales pipeline with multiple new business opportunities.
But what exactly did they write about? And how was their business pitched in the copy of the article?
"The blog posts were not a hard push about selling pink butcher paper, but instead informative and interesting topics like:
- There is No Substitute for Pink Butcher Paper
- Cooking with Pink Butcher Paper
- Spice up Summer Parties with Pink Butcher Paper
- 4 Ways Pink Butcher Paper Could Help you Win Top Chef
- Why is Pink Butcher Paper the Best Choice for Barbecue
- That’s a Sweet Piece of Meat: Why Perfect Brisket Starts with Pink Butcher Paper" - Courtesy of Sprout Content.
Get inventive with they way you show what you can do for your customers.
Start that sales conversation with some quality collateral.
Be hands on
Don't get afraid to get the ball rolling yourself, even if marketing and business innovation isn't exactly your thing.
Get your hands dirty in the matters of growing your own business and learn from experience.
In order to add value to something, you need some familiarity to make the right call.
To have success with marketing and business innovation, it doesn't require qualifications or great theoretical knowledge.
You just need to know the basics of business, which begin with being enthusiastic about embracing and engaging people - whilst delivering what they need with genuine warmth.
Do you need to hire a marketing consultant to get going?
Take it from this world renowned 'marketing consultant' - no...not at all.
In fact, he argues why you shouldn't hire a marketing consultant. Go figure!
Meticulous business people identify the sauce or formula earlier than those who don't.
Once you've got it and know where the necessary tweaks lie to getting your business match fit, there should be no stopping you.
Handle your detail with scrutiny, yet not obsessively.
Don't be afraid to make mistakes...
...how else will you get to see what works?
Don't be precious about looking good first time.
More adopt the attitude of learning knowing that having more added on with every wrong made, only helps to get it right in the future.
Why borrow when organic growth has much longer lasting results?
Sure, it takes greater discipline to run things of your own steam.
But the once you achieve it - you've become a survivor.
Stronger and more able to withstand the rigours of your market fluctuations by digging deep and being all about the grunt work.
A most valuable lesson to learn. Standing up on your own.
The most profitable farm operations in this economy in our opinion are forward moving ones.
Farms which look to keep things advancing and never stop seeking to improve.
Stagnancy leaves businesses behind.
Keep abreast of change to stay afloat.
Have a story to share about maintaining profitability during an economic downturn?
Make it known by commenting below.
Looking for further examples or insights to doing things differently? - visit our blog homepage.