Tips for Growing Your Wisconsin Ag Business

Looking to expand your ag business? Here are some tips to help you grow your family farm and serve more of the local community.  

Your family farm is your livelihood, your business, and your legacy. You work hard every day to ensure that your daily operations and seasonal routines run smoothly. The long-term wellness of your farm requires constant action by seizing opportunities, adapting to change, and making decisions that balance short-term profits with the long-term stability and health of your farm.
 
So, how can you ensure that your plans benefit your farm today and for years to come? In this post, we’ll discuss strategies for creating a growth plan, financial tools, resources you can use to fund your goals, and other important practices to ensure that your financial management is efficient and secure.

Develop a Plan for Growth

As you consider how you want to move forward with your farm business plans to enable sustainable growth, you’ll need to consider your immediate and long-term needs. The best plans balance these needs and ensure immediate actions are used as stepping stones for longer-term planning. 

Before you create a business plan for growth, you’ll need to focus on a specific goal or goals. These could be:

•  Increasing profit margins
• Increasing operational efficiency
• Adding a new crop or enterprise to diversify and reduce risk
• Transitioning the farm to a new owner or next generation
• Transitioning farm (or part of farm) to organic agriculture

Creating a realistic timeline for achieving your goals can help you better develop a plan to meet them. For instance, you might create a plan to increase efficiency and cut labor costs in the coming 2-3 years that also incorporates your long-term plan of selling your land to a neighboring farmer in 5 years. In this example, you might choose to lease new equipment to increase efficiency rather than buy equipment that won’t be needed down the road. 

Business plans not only help you identify strategic and actionable ways to improve your farm operations, but they can also be useful in securing financing for them. Some lenders may even require them. 

The USDA offers a helpful guide to creating a farm business plan for beginning farmers, but this same resource can be used by experienced farm entrepreneurs as well. Their Business Plan Guide includes a worksheet for creating farm balance sheets (essential for effective resource management!) and details for planning for conversation and risk management. 

The Wisconsin Small Business Center’s Farm Initiative, whose mission is to “provide consultants and farm entrepreneurs the tools, resources, and training they need to build profitable and financially resilient farm-based businesses,” can also be valuable for farmers as they develop their growth plans. 

Get Financing to Grow Your Business

Whether you’re purchasing new equipment or land or upgrading your infrastructure, with the scale of many Wisconsin farm enterprises, securing financing is often essential for meeting growth goals.

Lines of Credit

Operating and Working Capital credit lines allow regular access to funds without needing to dip into cash reserves while reducing your reliance on other loans. Use lines of credit to cover short-term budgetary shortfalls between seasons. For smaller business goals, your line of credit may be sufficient to cover costs without requiring you to seek additional financing. 

Term Loans

Larger purchases and infrastructure projects, from facility improvements to equipment and livestock purchases, may require a term loan. Longer repayment periods can make financing more affordable, allowing you to accelerate your growth in a shorter time frame.

Ag Real Estate Loans

Whether you’re looking to buy your parcel or expand your acreage, ag real estate loans can provide the funds you need for this major investment. Check out our Commercial Real Estate Guide to learn more about these types of loans. 

As a USDA preferred lender, First National Bank and Trust and our team of ag lending experts can help you find the right lending products to fund your business growth and meet your farm goals. Visit our Agricultural Loans page for more information.

Build Your Ag Business Savings

From helping you to secure funding to ensuring that you always have the money to cover your expenses, building your cash reserves is a crucial part of effective farm business management—and can be the key to successful growth.

Why is having savings so essential for growth? A sufficient cash reserve can:

•  Help you secure a line of credit or loan.
•  Provide the working capital needed to keep new operations going as they get off the ground.
• Supply down payments for business or real estate loans.
• Provide an emergency fund to cover unexpected expenses and losses of income so that unforeseen circumstances don’t threaten the health of your business.
• Provide an additional source of income through interest or dividends.

From savings and money market accounts to low-risk market investments, there are various ways to grow your reserves and nest egg. Working with an investment management expert can help you find the right savings accounts and strategies for your situation and goals. 

Simplify Your Day-to-Day Financial Tasks

Proper financial management leads to growth. Monitoring cash flow, minimizing unnecessary expenses, and enhancing accounting practices can optimize your money management practices and better position your business to secure funding.

Utilize online banking.

Online business banking can provide various tools to help you manage your accounts more efficiently and conveniently. From online statements and account balances to help you monitor transactions in real-time to remote deposit capture so you can deposit checks directly from your devices without leaving your farm, you can save time and better handle your finances using online and mobile banking.
Sign up for cash management services.
 
From simplifying payroll with ACH to keeping your cash reserves 100% insured with Insured Cash Sweep, Cash Management Services can provide several tools to create more efficient and secure financial management. 
Upgrade your ag business checking.

Your checking account is the financial hub and workhouse of your farm finances. That’s why having the right account that meets your needs is crucial. At FNBT, our one Business and Business VIP Checking comes with low minimum balance requirements, free online banking and bill payment services, and free BizPay for electronic payroll and direct vendor payments. Additionally, each account comes with access to BaZing Business Benefits, which includes benefits like Financial Wellness*, powered by  Gentreo. Financial Wellness allows you to create legal documents like wills, proxies, and powers of attorney—key documents to keep your farm operations running smoothly in case of an unforeseen circumstance or assist you in your farm’s succession. 

Build Your Team

A trusted, hard-working team of employees who share your values is essential for building a long-term profitable business. But outside of your team, you also need to work with vendors you can trust.

Given the scale and importance of purchases in commercial farming, it's crucial to build relationships with reliable vendors for timely delivery and quality products. If issues arise with a current vendor, first discuss the problems directly with them to give them a chance to make things right. If problems persist, consider finding a new vendor by:

• Consulting your extension office for recommendations.
• Seeking advice from other local farmers.
• Conducting thorough research and asking key questions before signing new contracts.
• Exploring business partners listed on Wisconsin Ag Connection.

When you’re looking to connect with new vendors or partners, ask them about their cybersecurity practices. This is often overlooked when you’re discussing the details of your partnership and the ag business, but ensuring that your data is safe is just as important.

Additionally, dependable professional partners such as lenders, banks, legal, and accounting services are essential. Experienced partners can save you time, stress, and money while providing valuable advice for managing your business effectively.

Lastly, networking with farmers in other areas can have vast benefits. Beyond giving you advice for quality vendors, they will know the regional markets, weather patterns, soil conditions, and other localized information, trends, and resources better than anyone else—and may even be able to lend a hand in a pinch!

Fight Against Fraud

Cybersecurity threats and scams are rising, particularly as people move to digital systems. Every business, not just those that spend all day on computers, must understand this. Farm businesses, which handle large sums of money throughout the year and do business with various vendors, must be especially cautious.

First, stay up-to-date with information about phishing scams, what they are, and how you can spot them if a cybercriminal attempts to coerce or trick you into giving up important information. It’s also crucial that you train staff on these issues, revisiting the topic on an ongoing basis so that anyone who has access to farm assets or accounts is aware of the potential threats they might face. 

Fraud doesn’t just happen online. In-person fraud, from check forgery to embezzlement, is a threat that all businesses still face. Reducing who has access to your accounts, financial paperwork, and equipment is an important first step. Ensuring checks are deposited quickly, and a limited amount of cash is kept on hand is another way to stay safe. Lastly, utilizing fraud management solutions like Positive Pay can help protect your hard-earned money from potential fraud—from local and cybercriminals. 

Grow Your Ag Business in Southern Wisconsin or Northern Illinois

FNBT is a family-focused bank based in Southern Wisconsin. We understand what it means to be a small business, which is why it’s our priority to help your family farm prosper.

Our ag lenders and bankers are here to help you grow your business. Whether you have questions about financing your farm expansion, growing your savings, wealth management, or preventing fraud, we are always here for you.

Contact us or visit one of our convenient locations in Beloit, Argyle, Janesville, Clinton, Darien, Delavan, Elkhorn, Monroe, Walworth, and Williams Bay Wisconsin, and Rockton, Roscoe, and Winnebago, Illinois. 



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