Saturday, January 2, 2010

Starting Small & Growing Big- Common trait amongst successful farms

Over the years, I have noticed a pattern amongst the various farms I have visited. This pattern seems to repeat itself over and over again in many of the stories I have read about on the internet and in literature. Successful farms start off small and may grow to become large. Big failures usually start off big, take on massive amounts of investment money or debt to get started, and usually pitch the concept of “Economies of Scale” on the production cost side of things to make something look viable on paper. Generally, my belief is that if something is not viable on a small scale, then it won’t be viable by starting it off on a large scale. Don’t get me wrong in thinking that I don’t believe in the advantages of scale, I do. It’s just that I don’t believe in starting big to achieve economies of scale off the starting blocks is viable. By starting off big, one looses all the advantages of the “learning curve”. Everything has a learning curve, even in industries proclaimed to be proven and tested. The advantage of starting small is that learning curves will cost less and are easier to remedy. Given time, the small farm can grow into a well run efficient enterprise as long as it does not make too many baby steps in its growth or tries to grow faster than it has the means for doing so.

Taking too many baby steps or trying to grow faster than one has the means for doing so can waste as much money as starting off big. This is done by making poor investments. Poor investments are made by investing in something that will likely be out grown within a very short period of time if the farm or enterprise grows. Investing with an immediate–term vision without looking at what is need down the road a short ways is a sure way to lose money. Likewise, making a number of half measure investments because the cost of doing it right is always too costly will result in a finished farm or enterprise that is poorly constructed and inefficient. These pitfalls of a small enterprise can be mitigated by just creating a multi-year vision. Written is best, but at least having one conceptually in one’s head is essential.

People are what make great companies and farms great. Under estimating the importance of this is what makes it so difficult to make starting off big work well. Large expense can be spent to recruit the best talent possible, but even the recruited talent will not have had the advantage of that which can come with a learning curve. They may get up to speed, learn, and adapt much faster, but they cost much upfront and still take time to get up to speed and to integrate. If not enough talent is brought in, things progress slowly, mistakes are made, staff burnout, and areas start experiencing selective neglect. Starting small allows time for personal growth, employee growth, and time for bringing on more people and time to focus on that which needs focusing on. Small enterprises are typically better at valuing and retaining talent. Big enterprises have a tendency to forget how it is they got to be big by forgetting the people that got them there and the people that make it work. Starting off big has bigger challenges in that personal connections between the top and the staff just don’t exist. My advice on starting a farm, enterprise, or even a new ministry within a church is to start small, limit the scope of focus, let things grow organically after initial beachheads have been established, and don’t forget that people are number one. Making gains at the expense of people is a sure fire way to failure.

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