TEPAP – Day 6 Afternoon Session
Michael Mazzocco, Director at Verdant AgriBusiness Consultants, presented the afternoon session of day 6 of the TEPAP conference. This session was on Market Growth Strategies for farmers.
To grow your farm revenues, you have seven degrees of freedom:
- Increase sales – same customers; same product mix
- Existing products; new customers
- New products – same or new customers
- Increase sales with better delivery / channel management
- Expand geography
- Change industry structure via acquisition/alliances
- Cross industry boundaries
You can focus on only one of these or decide to incorporate a couple into your farm structure.
If a farm decides to grow, then there are three horizons of growth:
- Horizon 1 – Extend and defend your core business first
- Horizon 2 – Build your emerging growth business
- Horizon 3 – Create viable options for that growth
Always be willing to shed your business of those operations that are running below your rate of capital. By doing this, you free up resources to expand those operations that exceed your cost of capital. This can be a double benefit.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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