There’s a saying in farm country: “Don’t ever bet against farmers.” Farmers must grow their businesses while constantly battling declining profit margins, industry incumbents with vastly more market power and the daily roller coaster of commodity prices and weather.
In many ways, farmers are the ultimate entrepreneurs, constantly innovating, growing businesses by themselves and taking full responsibility for all aspects of product delivery. Entrepreneurs could learn a lot from America’s farmers.
Here are six lessons from the farm that every start-up should embrace.
Have a mission that matters
Is what you are doing important and essential? As an entrepreneur, it is better be if you wish to be successful. Farmers have selected a profession that is essential and fundamental to society. As the population grows, being productive on every acre of land becomes even more important.
“He who has the most data, wins”
Larry Ellison was onto something with this quote. The second tip start-ups could learn from farmers is that data analytics are key to success. The average farmer in the Farmers Business Network, for example, collects more than four million data points per year. And they have a good reason to do this. In one study, farmers who planted the top-ranking seeds from aggregated data analysis yielded up to 12.5 per cent more than those who didn’t. In ever-changing conditions, you can’t assume that something that worked once will continue working. In farming, as any business, you need to know your data cold so you can innovate with confidence.
A handshake and your word are as important as a contract
In this day and age of excessive litigation and easy online legal services, you might think that contracts are all that matters. But in fact, your reputation and your longevity in business are governed more by your actions than by any words on paper. Farming communities are small, and farmers live and die by their word and the trust that is built with the various vendors they do business with. I suspect this simple fact could be lost on many entrepreneurs in other industries, but it is of the utmost importance -there is a compounding return on your ethics and keeping your word.
You reap what you sow
The fourth tip from farmers is true in both a literal and figurative sense – you reap what you sow. Farms are often multi-generational entrepreneurial enterprises. Similarly, although stories of unicorns captivate popular attention in the start-up world today, the truth is that many of the most consequential tech companies, like Apple, Google and Amazon, have been around for a decade or more. The lesson? Focus on the long-term goal instead of flaring up and then flaming out suddenly. Farmers have to think about decisions in terms of decades, not days. For example, a farmer can boost near-term yields by aggressively tilling the soil, but doing so will have long-term consequences for their soil health and require costlier fertilizer programs in the future. Farmers have to think carefully through their decisions and the possible far-reaching consequences, a type of visionary management that entrepreneurs would do well to emulate.
Focus on what you can control
The fifth tip from farmers is to focus on what you can control. Being an entrepreneur, especially a farmer, means you must have the inherent trait of being nimble. Sure, you have to put in the proper amount of time planning, but you must also equip yourself for the likelihood that Plan A might change. Farmers can’t control the weather or markets. Instead, they can focus on raising a good crop, finding new markets, building soil health and managing their costs – all of which mitigate their risk exposure. Entrepreneurs must be ruthless about where they spend their time; you can create value in the areas you can affect directly. Placing focus on what you can control and how you react to those changes is what matters the most in the entrepreneurial journey.
Systematically retire risk
The sixth lesson start-ups could learn from farmers is to find ways to reduce risk. As an entrepreneur, risk is an inevitable part of the journey. From the moment you make the decision to start a business, you must systematically reduce the risks facing your business, whether that’s through focusing on product-market fit, fundraising or building your team.