Monthly Archives: December 2011

The Bottom Line

Taken from the south tip of Salt Spring Island on Reginald Hill, looking south overtop Russell and Portland Islands to others in the Salish Sea east of the Saanich Peninsula.

After last year’s half-season was over and we decided to expand our operation in 2011, I vowed that I would be disappointed if we did not at least triple our sales.  I did not, however, say I would be satisfied.  And so it is that I am left with mixed emotions at the final result.

For reference, in 2010 we grossed something like $8500.  Save your sympathy though.  We were having fun.  Well, until we realized without a doubt that we would have to seriously pick up our game this year.  Hence the construction of high tunnels and the promise of being able to grow profitable plant starts and heat loving crops.

This year we grossed somewhere around $26k, barely achieving the tripling goal.  But, whereas our 2010 after expenses effective hourly wage was undoubtedly negative, this year’s was undoubtedly positive.  We figure Pauline spent ~600 on farm related work while I guess I may have worked ~2000.  We have no time cards and definitely no pay stubs to check but I just think that, despite thinking farm related thoughts nearly every day and actually working  most days for at least a few minutes (daily chicken duty, for example), I can’t say that the work seemed more onerous than having a 9-5 job, even in the summer.  So, after expenses, we worked for roughly $6/hr.  Now it’s time for some sympathy.

But perhaps more context is needed else we may as well hang up our hoes now.  This is a small business start up, one in which we have a limited, but ever growing, amount of experience.  Many new businesses of all types fail soon after launch, others take a few years to really get going.  And of course there are Facebooks from time to time.  All in all, I think we’re doing ok.  Neither Pets.com nor Amazon.

Absent any expansion in 2012, I could see our revenue increasing to $30k just by not repeating the high tunnel crop failures and by growing more of the plant starts that sold really well and abandoning those that didn’t.  Ignoring the original garden plot that is so dry and shady would decrease our revenue somewhat but we would gain way more time thus being positive to a $/hr calculation.

Last year’s expenses still had a lot of one-time purchases like high tunnel parts and plant start supplies, both of which have long lives.  We won’t have those expenses in 2012 (unless something unexpected comes up).  We can reduce our outlay on certain purchases like potting soil by buying in bulk now that we know how much we will use.  So instead of $10k+ of expenses, we could probably get by on, say, $4k.

And having learned a thing or two about efficiency from last year, I can see Pauline only needing 450 hours for plant starts and me getting by with perhaps 1200 hours.  Suddenly we’re north of $15/hr which is about the going rate for farm labour around here.

This result would prompt most to get a real job.  Alas, the promise of better rewards with the addition of still more high tunnel real estate at Dan’s and a more profitable crop mix means that I will keep going for at least another year.  Pauline, meanwhile, is hedging the family bet by pursuing new employment opportunities which is why you may have noticed more I’s and me’s in my writing and fewer we’s and us’s.  Still, I hope she will be able to help the plant starts business since, so far, that has been the most lucrative agricultural product so far.

Marketing

Mt Baker and the Long Harbour Ferry

We spent a lot of time selling produce this year. That has got to change. Time is money and money is in short supply (just ask the IMF, the ECB, and other central banking behemoths … and they get to pull money out their collective wazoos)!

First of all, let’s review where we sold. We attended a half-dozen Saturday markets from late April to early June, the peak gardening season when plant starts sell really well. We didn’t have much besides plant starts, however, so I think our best day was $500 but we averaged more like $300. The Saturday market runs from 8 until 4. With setup and takedown, it’s about a 12 hour day plus harvest time. I think $500 has got to be the minimum for a Saturday market next year; they’re just too painful without a bit of a pay off at the end. And, to that end, I’m pretty confident that we will succeed, owing to better crop selection and growing environment which will give us more to sell.

The Tuesday market was quite a bit better especially in terms of $/hour. The Tuesday market started up when we stopped doing Saturday markets; early June. Tuesday enjoys the same prime downtown real estate but runs only 4 hours (should be 3 but that’s a rant for another day). Setup takes less time because it’s not so congested with vendors (no artisans on Tuesday, just food). While baking up to 60 loaves of bread at the farmhouse on Rainbow that we had access to, I was able to help Pauline harvest and get all the market stuff loaded into the van. We left the farm at 2, arrived at the market at 2:05 and had everything ready well in time for the 3pm start. The market died at 6 so we were half-packed by 6:59 and fully loaded for retreat at 7:05. Back at the farm unloaded before 7:30. Our biggest market was $700ish and, even in the fall, we pulled at least $200. Again, those numbers should be higher next year although I might not bake bread and bread was usually more than 1/3 of sales.

The Growing Up Organic program, which is essentially a middle-person between growers and a few “bulk” buyers distributed some of our produce. Pricing was determined at the start of the year and was lower than Tuesday/Saturday market prices so we basically only sold our excess through GUO. The good thing about GUO is that the harvest happens after the order comes in so there’s no waste of unsold produce. The bad thing is that it was tough to sell. A buyer gets an email from the marketer saying we have Granadero tomatoes. So what? What a chef or grocer wants is a complimentary cluster of gorgeously ripe red plum tomatoes. After that, the orders come in with no commission paid to a marketer. And at the subsequent tomato delivery, there’s a complementary group of zucchini’s. OK, bad example. Nothing helps sell zucchini. In any case, our personalized marketing effort generated the sales that, in theory, GUO would generate. Contrary to what I was told, chefs don’t really mind you bugging them with good produce. So, if we’re direct-selling to almost all of the GUO buyers, the program probably won’t be worth our time next year. But we’ll see.

We started a credit CSA (community supported agriculture) program this year in which a handful of people gave us money up front and then took produce from us from the farmstand or the downtown markets which we deducted from that credit. The idea is to use this early-season money to pay for seeds and other expenses. We’re not particularly short of cash, at least not yet, so that benefit was of little value to us. We did it to generate sales that we thought we would not have otherwise earned. In our case, I’m not sure that we realized that benefit either. And even it did, the money we were talking about was not large. Our biggest contributor still has over half of their credit. But there’s the constant accounting that needs to be done, for $3 purchases or $15. Plus email account updates to the members. All in all, this is a project that I will likely discontinue.

The farm stand at the end of the driveway on Rainbow was excellent in the Spring while plant sales were on fire. Some days there seemed to be someone at the stand shopping almost constantly. But when the plant sales dropped off, we couldn’t make up for it with vegetables or other products. The big problem, I think, was our inconsistency and scarcity of product. Once they started producing, we usually made the effort to have tomatoes, cucumbers and zucchini’s on the stand. But because of the lack of refrigeration, lettuce mix was a problem. It had to be sold soon after we put it out or it went bad. Our strawberries would have sold but, after our own sampling, there were none to sell. The only roots we had were beets which no-one was too keen to buy (our carrot crop failed and our Japanese turnips were in short supply; people were lukewarm about potatoes after “new potato” season ended). So we were in a constant conundrum about whether to spend time keeping the stand stocked or whether to just invest more in the Tuesday market.

Next year we will have fewer vegetable types but more of them. Tomatoes, peppers and cucumbers should be plentiful while zucchini’s, peas, beans and hopefully strawberries should not only be plentiful but early. If we can show a consistent abundance of those crops early then I think sales will justify more effort to keep it going, which should help sales in this virtuous economic circle. A logical extension is to sell bulk quantities (10 – 20 lbs) of tomatoes and cukes to people who make pickles and sauces. We did this with some success last year with no advertising at all and at attractive price points.

With an upcoming high tunnel expansion over the winter, I was thinking that I would have so many tomatoes, peppers and cukes that I could sell through one of the local supermarkets. I’d be able to sell lots of food quickly although at a lower price. In exchange, they’d get to local-wash themselves. In a positive development I will write about shortly, I will have much less fresh veg than I planned, resulting in quantities more suitable to supply the local health food store which is a better philosophical fit anyway.

Finally, an island growing group makes a weekly trip to Victoria to sell their produce (mainly sprouts and mushrooms) to chefs and stores there. They make space available in their delivery van for others in exchange for gas/ferry money. I might ask them to take some of my extra produce at some point to see whether it’s economic.

Finding the right combination of outlets is one of my major goals next year.