December 2019 - Farm Owners Academy

Ready, Steady…… GROW!

Do you aspire to be a big operator?

Do you dream of being the biggest farmer with the most land in your area?

Do you get a major kick when you think of buying out your neighbours?

If so, Pump Up Scale (the eighth level of the TOP Producers Model) will help get you there. This steps all about rinsing and repeating your successful farm blueprint to expand your operation.

We had a client who set his 10-year vision to run 20K acres. And four years into his 10-year journey, he’s already hit that goal and is running 20K acres very successfully.

Yet he’s still hungry for more.

We met him in person recently, at the TOP Producers Event and helped him calculate that if he buys his neighbour’s farm and applies everything he learned inside the Platinum Mastermind, in five years’ time, he’ll make an additional $2million (in profit).

As this story shows, scaling is so appealing because you can make a great profit in a relatively short period of time.

Working through the TOP Producers Model, you’ve already done the hard work of learning how to build a great business. Now all you have to do is rinse and repeat the proven system.

Obviously, there’s a big opportunity here. BUT that doesn’t mean everyone should jump into Pump Up Scale. It’s an optional step.

Pump Up Scale is for those who truly LOVE the game of business

If that’s you, keep reading to learn the 3 main ways you can Pump Up Scale on your farm…

RELATED PODCAST: How to 10X Your Business and Scale Things Up

Scaling Strategy #1: Lease more farmland

Once you’ve worked through the first seven levels of the TOP Producers Model…

You’ve learned the skills to maximise the profitability of your farm…

And you’ve now got systems in place and people to do the jobs…

All the knowledge and work you’ve done on your current property, you can replicate it on another farm.

Why not apply that same blueprint on a leased block? The same way you would lease a house or a commercial property, you can lease farmland.

Think: McDonald’s. They keep applying the same blueprint in new locations.

The big benefit of leasing is that it doesn’t cost much to get started. The only real risk is the rent you pay on leasing that block.

Let’s say you pay $100K to lease a 1,000-acre block of land. If you’re a clever farmer, you might be able to turn that $100K into $500K of revenue by applying the same blueprint you’ve already used on your farm. So there’s a big potential for profit, even with the cost of the lease.

That’s why one of the most important things to consider here is getting the lease agreement right. It’s so important you get a good deal so you’re not paying too much rent so you can get a healthy return off that block.

The main downside of leasing is that you’re gonna improve someone else’s block.

You’re gonna work that block to improve it…and in the end, you’ll give that block back to the owner. So you won’t keep the benefits of any improvements you make.

You also won’t get the capital appreciation of the land. A lot of farmers make a lot of money off of capital appreciation. In the end, you could have great cash flow and great profit…but you won’t be growing an asset because you don’t own the block.

Scaling Strategy #2: Buy more farmland

If you like the idea of rinse-and-repeat but don’t want to improve someone else’s block through leasing, a second scaling strategy is to buy more farmland.

You might negotiate to buy out the neighbours or purchase a farm in your neighbourhood or buy a farm 500 km away— the choice is yours!

Again, it’s McDonald’s. You have the insight into what works so you can just apply the same successful blueprint to a new farm.

The benefit of buying is that you own the land, so you get the capital appreciation and any improvements you make are yours.

The main downside, of course, is the big capital outlay to buy the land.

You need to consult your budgets to make sure you don’t spend too much money.

This isn’t a decision you need to rush. Be patient and clever and flex your negotiation muscles…because the wrong buy price will erode your profits.

We help farmers work out what’s the maximum they should be paying for a new block of land inside our Platinum Mastermind Program (whether buying or leasing.) Because as Warren Buffet always states, you make your money on the buy, not on the sell — so it’s crucial you don’t pay too much.

Scaling strategy #3: Start another business

Richard Branson says, “Once you learn to run a business, there’s no reason why you can’t run a number of other companies.”

I can attest to this, too…

Farm Owners Academy is my fourth company. All four have been in totally different industries but they’ve all been successful because the fundamentals of business are always the same.

There are so many ways you could apply the same principles to different business ventures. Here are 3 of the most common:

1. Buy an existing business

There are a huge amount of businesses on the market right now because Baby Boomers are retiring.

Why not look through the business classifieds looking to buy a good business at a discounted rate? Taking over an existing business is often much easier than launching a brand new venture.

At this point in your journey, you’ll have the tools to jump in there and improve the business to increase profits. Plus, this option allows you to work in another industry outside farming, which is great for those who want to minimise risk and diversify their income.

2. Start your own business, outside the farming industry

Once you’ve gone through this whole process of learning the skills to improve your farming business, you’re in a position to start a whole new business in a different industry if that’s what you want!

One of our Platinum Mastermind members is currently launching a personal training business. Deep down, that’s what his passion is. He’s able to take all the skills he’s learned about running a farming business and apply them to launch a side business following what he truly loves.

3. Start a new business on your farm property

You can also find opportunities on your farm that you didn’t see before…

For example, a mate of mine runs a sheep farm…and they recently decided to launch a solar farm on their land. They’re creating a totally unrelated business to what their genius is on their farm to derive a new income.

It’s important to remember that the Pump Up Scale step is optional. That’s why we recommend everyone goes through the Open Up step first to see if this is a journey you want to take.

We have a farmer who’s been running the same 500-hectare block for years. He’s running a good business, making great money, and experiencing freedom. He’s got no desire to get a bigger block — he just wants to perfect the block that he’s got. And there’s nothing wrong with that!

As we always say, success is doing what YOU want…not what anyone else wants. So it’s important that whatever scaling option you choose — even if that option is NOT to scale — make sure it’s the right decision for you.

Want hands-on support as you scale your business?

Whether you want help to negotiate a land lease, buy out the neighbours, or look for a completely new business to buy, Farm Owners Academy can help.

Inside our Platinum Mastermind, you’ll have direct access to our decades of experience running million-dollar businesses across various industries. You won’t have to struggle through it alone; you’ll have mentors and other farm owners who have been through it.

Click here to learn more about the Platinum Mastermind program.

The 3 steps to growing your farm without you being there

Imagine for a minute that you’re a dentist and you own a one-person business…

You genuinely love what you do.

You spend your days cleaning the teeth of your patients.

Your schedule is jam-packed and you feel a real sense of accomplishment after a hard day’s work.

Sounds pretty good, right?

But here’s my question…

While you’re cleaning teeth and working IN the business…who’s working ON the business?

Who’s managing the admin and paperwork?

Who’s searching for new growth opportunities?

What’s the contingency plan if you get sick and can’t clean teeth anymore?

You can’t possibly have time to do all that important business-building work if you’re cleaning teeth all day.

It’s the same on the farm.

The seventh step of the TOP Producers Model is Promote Team, finding great people to run the farm for you. This is the real step that takes you from being a farmer to a farming business owner.

This is a big, big, BIG identity shift! I know it’s not easy.

But I can tell you that the handful of our farmers who have embraced this shift are the most successful ones in our community.

As I’ve said before, this is an optional step. But I invite you to at least educate yourself on what it would look like to grow a strong team…and then decide if you want to have a crack.

Because without the Promote Team step, you’ll never have real time- and financial-freedom on the farm.

The fundamental skill required in Promote Team is leadership. And to be an effective leader, you need to master three key components:

1. Create predictability and certainty with systems

The way to create a sense of predictability and certainty on your farm is through systems.

It’s essential to build systems to take all the things that you know about running your farm and document them in simple step-by-step processes that someone else can follow.

A great example here is McDonald’s…

Did you know McDonald’s have a system to keep their toilets clean? I learnt this at a conference recently…

Every three hours in McDonald’s, there’s a little alarm that goes off. An employee grabs a checklist and goes around cleaning the bathroom.

Clean the mirrors? Tick.

Wash the floor? Tick.

Empty the bins? Tick.

When the checklist is completed, the supervisor comes in to check their work. And because the employee is following a step-by-step checklist, it’s highly likely it’s been done right.

The key is, it’s not left to chance. It’s a system that ensures that bathrooms are kept tidy.

Systems can do the same thing for your farm.

For most farmers, everything lives in their heads. But in order to have your team members be successful, you MUST create systems for them to follow first.

2. Hire, train, and empower the right people

Once you’ve created clear systems throughout your farming operation, it’s time to hire the right people to run those systems.

This is where a lot of farmers struggle…

What often happens is that a farmer will find someone at their local pub. He’ll put that person on, dump on them whatever he needs, and that poor new hire goes out not really understanding what they need to do.

Because there are no systems, no protocol, no job description, that person ends up making a number of mistakes. The farm owner ends up fixing all those mistakes, tripling his stress. And then he sacks them and goes back to being the sole operator, saying it was all too hard.

Sound familiar?

Instead, when you master the art of hiring and communication, you’ll find, train, and manage a strong team that does the work exceptionally well.

It starts with knowing how to recruit well and find the best people for the job.

RELATED PODCAST: How to Hire a GUN Worker

Here are a few things you’ll need to master to be a strong team leader:

You start by clearly defining job ads and job descriptions, so potential employees will know what’s expected of them.

You also need a solid system to determine if applicants are the right people for the job. The person you’re hiring needs to get the job (understand what it entails,) want the job (feel passion and excitement,) and have the capacity to do the job (skills). They also need to be aligned with your values.

Once you’ve hired the right person, you need a clear Induction System to welcome them to your team. You’ll need to train them to understand your systems and processes so they’re capable of doing the work.

In addition to all that, there’s a second layer to this as well…

Once you’ve hired and trained the right people…how do you empower team members to do the job well?

It’s important to learn how to communicate effectively and provide feedback to continue to improve your new team member’s performance.

Good communication is a key skill of an effective leader. Your farm cannot thrive without it.

3. Trust and let go

I learnt something really interesting in the Platinum Mastermind program recently…

I asked this question to our community of farmers:

How many of you trust that someone else can do a job better than you?

Two hands went up…out of 150 people.

…Which shows me that there’s a real trust issue within the farming community.

Here’s why that matters so much…

BOTH of the people who raised their hands to say they trusted others run freedom farms. They’ve actually achieved the dream many of the other farmers envision for their lives.

That’s because you can’t build a farm that runs without you unless you trust others to do their jobs well.

Now, I’m not saying it’s easy…

If you’re like most of the farmers in our community, you’ve been brought up to think that no one can do a job better than you. So many farmers are petrified to let go because they don’t think anyone else will work as hard.

And I want you to know that’s simply not true.

Many of our clients have found team members who are incredibly hard workers (like Tim and Cheryl) There are great people out there who will give their all for your farm.

But you have to CHOOSE to trust them.

You have to make the decision to trust for the greater good of the organisation…because it’s not good for the farm if you’re the only person who can do the jobs. That’s not a healthy business.

If you want to enjoy a sense of freedom on the farm, you need to step back, let go, and TRUST that your systems and team will keep the business moving.

The key takeaway about effective leadership?

The most successful business owners lead from the back of the ship, not the front.

Think about the captain standing up — he’s not the one being busy…but the one overviewing and ensuring everyone’s doing their job.

When you grow a strong team, you’re able to really step back. This will give you a new layer of energy and clarity because you’re not busy anymore.

That’s when the REAL opportunities start flowing your way…

When you’re no longer busy on the farm, you’re now in a position to do what we call Deal Flow…which is going out to look for opportunities and expand your operation. (We’ll dig deeper into those opportunities next week on the blog.)

At the end of the day, we can either live to work…or work to live. You have the ability to create space and enjoy your life while running your farm. And it starts by becoming an effective team leader of your farming business.

Leadership is a never-ending education. Get the right support.

From creating systems, recruiting team members, and being an effective communicator, becoming a strong leader is challenging. That’s why the Platinum Mastermind community is such a game-changer.

You’ll be surrounded by business and farming mentors, plus other successful farmers who have been where you are. You’ll get advice from people who know what it’s like and have learned what works (and what doesn’t) to help you jump three steps ahead in your leadership journey.

Click here to learn more about the Platinum Mastermind program.

The best ways to grow your wealth…safely

Farming is inconsistent.

Some years, you make money…others you don’t.

The theory goes, out of every six years, you’ll make money in four of those years and you’ll lose money in two of them. It’s all part of the game.

That’s why it’s so important to be clever with your money in the good years.

Instead of simply spending your profits on “stuff,” I’d rather you put that money to work…

Earning interest
Diversifying your assets and de-risking your farm
Continuing to create wealth for decades to come

…So that you can sleep easy — even in the bad years — knowing you’re financially covered.

RELATED PODCAST: Could Your Money Beliefs Be Holding You Back?

Why financial freedom matters in the farming industry

Farming is one of the most volatile industries out there. When you’re as dependent on the weather as farmers are, there’s very little you can count on.

That’s why it’s so important to be smart with your profits during the good years.

When you get those good years, that’s not the time to spend…

It’s time to invest, invest, invest!

I recommend you take the money out of the business and do two things with it:

Reinvest a portion back into the farm
Invest the rest of the profits off the farm

Investing off the farm enables you to de-risk the whole situation.

Imagine if you had enough income coming in from outside the farm that it actually didn’t matter if you had a bad year on the farm…

Let’s say you owned your farm and had $2million invested off-farm. With an average return of 8%, you would receive $160K per year off your investable assets.

Thanks to the security that asset provides, the unpredictability of the farm wouldn’t bother you. You’d just be loving farming, you could still laugh and smile, and you wouldn’t really stress about what happens because you’d have enough assets off the farm to take care of you.

THAT’S what Procure Assets, the final step of the TOP Producers Model is all about.

Although this step falls under the Propel phase, which isn’t for everyone (click here to learn why), we think this is something EVERY farmer should pursue. We’re adamant that investing is a skill farmers really can’t miss.

Farming is too risky, in the end, to have all your eggs in one basket. It’s so important to diversify through off-farm investments.

Some of our farmers who have done this step really well make more money off their investments than their farms.

So what I invite you to do is allocate some time now to learn about how to procure assets. Don’t just have your farm as your only asset. Learn the skills to build your wealth.

Investing is a skill, just like anything else! Anyone can learn to do it…and do it well.

Let’s walk through the two most common off-farm investments you should consider, along with the pros and cons of each:

Off-Farm Asset #1: Property

The first way most farmers can grow wealth off the farm is through investing in residential real estate.

Real estate makes a great investment for a number of reasons…

First, you can create a lot of leverage, meaning you can borrow money to buy a house. Using the bank’s money to buy is a good option to have.

Let’s say you buy a $1million property and it grows at 5% per year. You’re making $50,000 per year…and because you’ve got leverage behind it, you won’t need to put up $1million upfront to purchase that asset.

The property market also gives you a certain amount of stability. In Australia, the property market has been very consistent, which is a nice balance to the unpredictability of farming.

There are a number of tax advantages to buying property as well, which can result in a significant cost savings. And property appears to be a finite resource, which makes it inherently valuable.

However, there are also a few cons to property investment…

It’s a high capital outlay. Although you can borrow money from the banks, you often need to put forward a sizeable chunk of money to purchase property.

It’s also a difficult asset to liquidate. There are usually fees of getting in and fees of getting out (typically about $100K to get in and out.) If you buy property and then want to liquidate quickly, it’s often hard and/or expensive to get your money back.

Finally, you have to consider maintenance and things going wrong with the house. You could buy a house that ends up needing lots of unforeseen work. For that reason, I say property isn’t a passive investment option. It can involve quite a bit of effort to maintain.

Off-Farm Asset #2: Shares

Personally, investing in shares is my favourite way to build wealth. There are a number of reasons for this…

First, you’re riding on the back of successful companies. This means it takes very little mental energy on your part. Someone else has to use their mental energy to grow the company…you just need to choose which companies to invest in.

It’s very cheap and easy to buy a share, especially compared to buying property.

Your returns can be high, particularly if you’re investing in US stocks. Returns are often significantly higher than the property market, if you know what you’re doing.

It’s also very easy to liquidate, which gives you a certain amount of freedom. In theory, I could sell my shares tomorrow and get my money back. That flexibility is really nice when you’re investing.

Investing in shares is also quite simple. It’s not simple to learn…but once you learn it, it’s simpler to pull it off than many other investment strategies.

The downsides to shares?

How the company performs is ultimately outside your control.

It’s difficult to find leverage, meaning banks are unlikely to loan you money to buy stocks. You’ll have to use your own money to invest.

There’s also quite a bit of volatility in the stock market. There are lots of ups and downs. Farmers are typically used to this volatility (and is one of the reasons farmers make such incredible stock investors) but it’s a point worth mentioning.

If you want to learn more about the shares market, I have three podcast episodes for you to get started. In each one, I interview Terry Tran, the investment guru I call “Australia’s Warren Buffet”, and the guy I trust to manage my own finances.

He’s the best person to teach everyday people about the shares market and he gives so much good insight on the podcast:

RELATED PODCAST: 3 Reasons Farmers Make World-Class Investors

Of course, investing isn’t just about money or becoming the richest person in the world.

It’s about security.

It’s about stability.

It’s about providing financial freedom for you and your family so you have the choice to live life however you choose.

Investing is a skill, just like farming. Even if you don’t know the first thing about investing right now, don’t worry — it’s something anyone can learn.

Go and engage the experts (some of whom I’ve mentioned in this blog post) and study their teachings. I promise, it will be an incredibly smart “investment” of your time.

Learn how to master the shares market…for free.

My good friend and investment guru Terry Tran created a training just for FOA called “How to Create REAL WEALTH Outside Your Farm Safely”.

What I love about Terry is that he teaches proven financial strategy…in plain English, no financial jargon included! During the free training, you’ll learn:

The 4 critical areas to consistent high returns…safely
How to get BIG RESULTS from small accounts (even if you’re starting from scratch)
How to take control of your family’s financial future by getting 9 out of every 10 stock picks right
And more!

If you’re even remotely curious about generating wealth off the farm, this training can’t be missed!

Click here to sign up for the FREE training.