End-of-the-Year Farm Evaluations
If you have read our blog posts from the beginning of this year, you will understand that we consider Dry Hollow Farm an agricultural business. We are running neither a homestead nor a hobby farm. For this reason, analyzing end-of-the-year financials and farm realities is crucial to the decisions we make for the coming years.
One of our least favorite tasks as the calendar year comes to a close is analyzing farm financials in preparation for tax season and future decision-making. Animals are interesting. Plants are interesting. Financial spreadsheets are not! I work very hard to keep up with monthly spreadsheets that itemize expenses, income, and mileage for three separate categories: farm, cabins, products. (However, as I write this, I realize I am at least a month behind!)
First, the animals must pay for their upkeep. Sales of kids and puppies should cover feed and medical costs. This is a basic rule-of-thumb for us, especially for our goats. If we use this approach, then the cost of all soap products derives from ingredients rather than animal upkeep costs.
Second, how were product sales for the past year? This is probably the toughest farm business activity to analyze because of the number of variables we must consider.
Are there products we need to discontinue? Each year we discontinue specific soap fragrances or replace them with new, upgraded fragrance offerings. There are products that we stop making, whether because of low sales or the complexity of continuing to make them. Once the rush of holiday shopping is over, we take time to evaluate our product line and begin planning for the new year.
Are there event venues we need take off of the next year’s calendar? When we first began marketing our goat milk products, we loaded the calendar with in-person events. As time passed, we whittled these down to the ones we believed most cost and time effective.
Are there new product lines we need to explore? This year we are excited for several new product offerings coming in 2024 as we expand our online marketing to new customer bases. We are developing multilevel gifts sets for personal and corporate gift box options that will contain a wide variety of Dry Hollow Farm offerings. Look for these to begin hitting our website in the upcoming weeks!
Are there online marketing platforms that need our attention? Our website is a constant work in progress as we consider it both a selling and informational platform. For example, this year we invested time in creating a ten-year anniversary blog. Next year we will return focus to our children’s blog that we previewed two years ago. We also review our online shop, product categories, and listing photographs and information in order to present our farm offerings as professional as possible.
Third, we review our farm stay financials. How did this year’s occupancy rate compare to previous years? Do we need to adjust pricing based upon rising costs or review stay guidelines? Are there structural upkeep tasks we need to schedule for the coming year? Are there amenities we should consider adding, especially for outdoor activities? Are there issues of guest comfort we need to address?
Fourth, what farm improvements do we need to explore and schedule for the comping year? We view Dry Hollow Farm as a work in progress, and every year consider expanding pastures, building new structures, or update existing resources.
As 2023 draws to a close, evaluation is key to creating a sustainable business. This past year has brought substantial growth and we hop to continue this expansion in the years ahead. Thank you for sharing this journey with us!
Dr. Kathryn Bush owns and operates Dry Hollow Farm, a working goat and sheep farm in Huntingdon, Tennessee. Together with her husband, Russell, she creates skincare products from their fresh goat milk, grows organic herbs, welcomes visitors to their two cabins on the farm (available for stays through Airbnb), keeps the farm’s on-site soap shop stocked with their handcrafted products, and enjoys working the farm in company with their Great Pyrenees dogs (who work hard guarding the animals). Check out their natural products featuring farm-grown ingredients here, and sign up for the Dry Hollow Farm newsletter to stay in touch and be the first to hear about farm news, events, and new products.