- Use farm records to track progress toward goals.Setting farm goals is a very important part of running a small farm business. A business plan should also include these goals. When your record-keeping focuses on the goals you’ve already identified for your farm, you know that you’re tracking the right things. Sounds simple, but in reality it makes a huge difference and people don’t always take the time to yoke these two things together.
- Track both income and expenses. Sometimes it’s all too easy to get hyper-focused on either income or expenses and let the other languish. Track what goes in and what goes out religiously and you will reap benefits in terms of your farm business. Use whatever method works for you, but keeping farm expenses and income in a separate account from the household will help when it comes to tax time.
- Monitor your labor time. Most farmers ignore their potentially biggest resource: their own labor. Track the hours you spend doing various tasks on the farm, and if you have employees or other workers, track their time as well. This can be really eye-opening when you take the time to collect and then analyze it. If you wonder why the income/expenses are balancing but you don’t feel like you’re getting anywhere, take a look at how much labor you have to put in to each product and where it comes from.
- Keep up with records. Obvious, but the key is to build habits that you can continue over time. For some people, this will mean keeping up every day. For others, every week. Still others, monthly or quarterly will work. If you have a way to track things even during the busiest season, you can catch up on data entry when things slow down.
- Review periodically. Data doesn’t do any good if you don’t look at it, so take the time monthly or quarterly to evaluate your farm record-keeping, looking back to see what works and what doesn’t.