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Separate Profit Centres
Many farm operators add new enterprises or profit centre to their businesses to control risk. A key to success is keeping costs and revenues for each profit centre separate. This allows you to accurately evaluate the profitability of each enterprise. When you blend everything together, you cannot truly determine what is doing well and what is not.
Tam Andersen of Prairie Gardens and Greenhouses has several profit centres: greenhouse, u-pick strawberries, fall festival, school tours and a corn maze (coming in 2006). Over the years Tam’s operation has changed many times. When asked what prompted the changes she says:
- Lifestyle – balance between family and work
- Customer demands
- Profit
“Never make decisions on a gut feeling because we tend to favor the things we like,” says Tam.
Lessons Tam learned:
Lifestyle
- Is a personal decision – my family is a very important part of my life and is always considered when making a decision
- Be careful not to burn yourself out
Customer demand
- Know your target audience
- Spend time talking to your customers and listen to what they say
- Use e-mail, newsletters, etc. to keep your customers informed and to gather comments
- Keep in touch with your industry(s) and know what is happening
Profits
- Use a computer program to keep track of all costs and revenues per profit centre
- Take the time at least once a year to evaluate each enterprise and plan
- Get professional help – this can save you lots of time and money
- Market, market, market – you can never stop marketing and it does not have to cost a lot
- Think outside the box regarding what to do and how to stay ahead.
www.prairiegardensandgreenhouses.com |
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