dollars & cents
Best Management Practices
of Young Producers
Dr. David Kohl energizes agricultural
lenders,
producers
and
business
persons with his keen insight into
the agricultural industry through
extensive
travel,
research,
exposure during his career.
and
He is
Professor Emeritus of Agricultural
Finance
and
Small
Business
Management and Entrepreneurship
at Virginia Tech, Blacksburg, VA.
Dr. Kohl has traveled over 8 million
miles in his professional career and
conducted over 6,000 workshops and
seminars for a variety of agricultural
audiences.
Dr.
Kohl’s
personal
involvement with agriculture and
interaction with key industry players
provide a unique perspective into
the future trends of the agricultural
industry and economy.
20
HEARTBEAT | WINTER 2015
In my extensive travels, facilitating workshops and seminars, the element I
enjoy most is working with young farmers and ranchers. These producers,
many whom are millennials, 18 to 34 years of age, are generally eager,
lifelong learners aspiring to make their mark on the agriculture industry.
At a recent educational event, the attending group requested I provide
them with some of the best management practices of a young agricultural
entrepreneurs. While the order is not important and certainly others can
be included, the following elements of success are based upon my decades
of work in the agricultural industry.
One attribute that sets a successful producer apart from others is
modesty in lifestyle. Whether it’s a start up business or one in transition,
the amount utilized for family living is critical. Many young producers
develop personal family living budgets and then, monitor those numbers.
Others will supplement the business or living costs with off-farm or nonbusiness income. This shared sacrifice between business and lifestyle often
dictates the ascension of business growth. There is an old saying that is
summarizes this attribute well, “life is a matter of choices and priorities.”
Choose carefully.
Another unique trait of stellar producers is investment in productive,
earning assets. Whether it is livestock, land, equipment, or people, they
have a keen sense of what investments yield the highest rate of return. This
often entails budgeting and planning on paper before the purchase.
Another aspect that sets apart the successful group is people skills.
Often, parents and previous generations acted independently showing
little desire to deal with people. Today, interactions with your employees,
land owners, suppliers, lenders and in some cases, your consumer, will be
critical to success. Both financially and psychologically, your net worth is
directly correlated to your networking ability and those with which you
network. Additionally, those committed to lifelong learning are usually
willing and eager to learn from others; which is one characteristic often
observed amongst the successful individuals. More young farmers today
seek education outside the industry to expand creativity and heighten fresh
thinking.
A strong set of peers as well as a good set of mentors are both critical in
today’s roller coaster economy. Peers and mentors serve as excellent sounding
boards for new ideas. In addition, they can also lend support when the
perils of business and personal issues arise. Sometimes, a good mentor is a
family member or neighbor. However, in today’s world of technology, the
best mentor or peer may be half-way around the globe. The most successful
business models are mentor-driven. Often the experience becomes mutually