HeartBeat Winter 2015 | Page 20

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