The Hurdles of Farm Growth
Tom of Bennett Farms (MI) shares the challenges tackled (and overcome!) as he doubled his Farm sales… then doubled again in just 4 years. In this latest episode, hear Tom’s advice for Scaling your Farm Business.
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Hello and welcome to the Independent Farmer Podcast, the go to podcast for do it yourself farmers who are taking control of their own business, skipping the middleman and selling direct to local consumer and wholesale buyers. This podcast is hosted by Barn2Door, the number one business tool for independent farmers to manage their business, promote their brand and sell online and in person.
Let's dive in to today's Independent Farmer Podcast.
James Maiocco: Welcome to the Independent Farmer Podcast. I'm James, the Chief Operating Officer at Barn2Door, and your host for today's episode. As many of our listeners may be aware, Barn2Door offers an all in one business solution for independent farmers who are cutting out the middleman and taking control of their own business, selling under their brand, and [00:01:00] making sure their customers can access them anytime online and in person.
In today's conversation, we're gonna be jumping into some of the hurdles of growing your farm business, right? And today I am happy to welcome back Tom Bennett of Bennett Farms in Michigan. Tom is a part of our farm advisory network, and he is worked with us for more than five years. Since becoming an advisor, he has shared many best practices for growing your business, and marketing in person and growing a full-time farm business while increasing average order sizes. Tom's been incredibly successful and he's also a family man. I'm excited to talk to Tom today about the various steps he's taken to grow his farm business, some of the struggles he's encountered along the way, and some advice for new farmers.
Welcome back, Tom. It's great to see you.
Tom Bennett: Hey, thanks James. Good to be back.
James Maiocco: Well, I'm really excited to dive into this given, you know, watching the maturation of your farm over the years, you guys have really built a great business. But for some of the listeners perhaps who may be unfamiliar with Bennett Farms and your story, let's rewind a little bit and maybe give a little bio on your background, how you got into [00:02:00] farming to begin with.
Tom Bennett: Yeah, so did not grow up farming. Had no background in farming. You know, the neighbors had a farm when I was a kid and we'd throw apples at their cows and stuff, but that was about the extent of it. So, I joined the Marines in 2001, right outta high school. Spent 10 years in the Marines and when I got towards, like year seven, I started thinking about what I would be doing after the military service, and I knew I wanted to get some land and live in the country. And so we went that route, bought some land and then, when I transitioned to civilian life, started producing food for ourselves just as more of a homestead type of deal. And then we had seen demand from people we knew around us that started asking us if we would raise hogs for them and do things for them. And then we kind of said, well, maybe there's something here. Maybe we should formalize this a little more. Started selling bulk animals that way. By 2012, I was raising livestock mostly, you know, starting out with chicken and pig, things like that. And then by 2016 I did my first farmer's market, still working an off-farm job. Had some success with [00:03:00] that and saw the potential to replicate that and, you know, just to do more of those, to provide more income. And then by 2018 we had grown that big enough that I had to decide between scaling back on farming or going all in on it and quitting my day job, 'cause we just ran outta hours in a day, you know, to do everything. So, went all in on farming in 2018. That would've been about the same time we started with Barn2Door. I believe that was like the same.
James Maiocco: Yeah.
Tom Bennett: Quarter of the year, when I said, okay, if I'm gonna do this for a living though, I definitely need an online avenue as well, to capture more customers.
So, yeah, it's been great. It's been a ride. I mean, it exceeded my hopes and dreams from the beginning when this started and I was just laying in bed with my wife saying, you know, I think I can do this. Like if we just raised this many animals and you know, she brushed it off just kind of like, yeah, yeah.
Right, right. You know? Okay. And then here we are, you know, surpassing all those goals. You know, less than 10 years later, so.
James Maiocco: Wow, that's amazing. I have to tell you, I remember [00:04:00] talking to you, I think we met at the Farmer's Veteran Coalition Conference, actually. And, at the time, like you said, you were working an off-farm job and for the listeners who don't know this, you also have six kids, right?
Like, so you got a lot of mouths to feed, right? You still have a heavy load, but at that point you had a very heavy load on your plate in trying to make this decision, especially as a, you know, providing for your family. Talk about making that transition, 'cause I know a lot of people still working off farm job and try to make that switch and that's really tough.
Tom Bennett: Yeah. And I got some great advice on, you know, I've tried to, on that question that I get sometimes I try to distill it into an easy answer for people on how do I know when it's time to make the switch.
And I haven't said this on a podcast yet, because it kind of just came to me a month or so ago. There came a point when I was working my off-farm job and farming where by going to work at my off-farm job, I, in effect, lost money that day because I missed out on opportunities with the farm. Like I would go to work to make 300 bucks, but lose 500 because I wasn't able to [00:05:00] do a delivery route that day. Or maybe, you know, I had six pigs farrowing that day and I had to walk away from it because I gotta go to work and I lose thousands of dollars worth of pigs, you know?
When you start to see that you could make more money by staying home than you would've if you went to work today, that's when it's definitely a time that you need to, you know, take a look at that about stepping away. And that starts happening consistently more and more as you grow.
So, that was the tipping point for me was where I was just tired of losing livestock, you know, death losses. I've had thousands of birds on pasture, gotta leave for work during a thunderstorm and couldn't take care of, you know, what I needed to there. So I go to work to make my wage for the day, but I lose thousands of dollars in birds that I could have prevented if I'd have been home or, you know, missed opportunities with, I couldn't do a Thursday delivery route because, you know, I had to work on Thursdays, and the restaurants that we deliver to, you know, they don't want an evening delivery. They want a morning delivery. So just things like that. It [00:06:00] was a hard transition, like the risk is all financial, right? I mean, that's what it really comes down to. And my wife had said to me when I left my employer that I was with, like, you can do this.
She didn't fully support it. All right, so. 'cause we had a comfortable thing going, you know, life was easy. And she said, you can do this, but your paycheck next week better not be less than it was last week. You know what I mean? Like, so from day one, we had an understanding that I could do this, as long as my family did not suffer for it.
You know, I don't want my kids to go without, I don't want us to have less because I want to chase my selfish, you know, thing in life that I want to see us do. So, and we succeeded at that. Life's changed a lot since then. It's nice because, I mean, with the success that's came now, it's like the financial obligations in my real life are laughable compared to the financial obligations that the farm [00:07:00] has. I mean, we spend $2,000 a week on milk just from an Amish dairy that we resell. You know, I mean, like, that's more than my mortgage. You know what I mean?
James Maiocco: Yeah.
Tom Bennett: And that's just one side item that we carry in our online store and we offer for delivery.
So, and that's not even a product that we produce, that's just we an add-on from another farm. So, we're in a lot better place now financially, because we were able to take the risk early on, you know?
James Maiocco: Yep. No, no risk, no reward, right? Like it is a transition and I know many farmers who are listening to this podcast right now
want to get into that position that, that enviable position, like you said, where you can begin, where you've built loyalty, built brand, you've got a customer base big enough now that you're now acquiring additional products, which is add on margin, add on revenue, to even add more value for your customers.
And that's a really great position. Took a lot of hard work for you to get there.
Tom Bennett: Yes.
James Maiocco: Well, let's back up a little bit. Let's talk about some of the steps it takes to get there. So first off, your core products. You mentioned pork [00:08:00] and chicken. Talk to us a little bit about how you chose those items initially, and you know, kind of a little bit about your commitment there in terms of your practices and the types of products you're raising.
Tom Bennett: Yeah. Pork and chicken was our go-to from the beginning. We knew we had to differentiate ourself like in the market, right? Because if I'm gonna sell the same confinement CAFO operation Meat that Walmart's selling, why would they wanna buy it from me? I'd be local, but it would be a similar product. So in order for us to get a premium on our product, we needed to be able to differentiate ourselves in the marketplace.
So we are pasture based, non GMO and antibiotic free. To this day, even with everything, we don't have a barn on our farm. We've got some brooders, but aside from that, we have no barn. So everything's, you know, the pigs, the chickens are actually, we're running them all the way into January now, and then starting 'em in March. So we started out with pork and chicken mostly because it's a quick turnover, right? We need to be able to turn over that cash to get money back in as quick as possible. Chicken's got an eight [00:09:00] week life cycle. It's very fast.
And if you need to grow with chicken, you know, you can do that quickly, you don't have to wait for another season to start to do more. You can always add that on. It's only eight weeks away from being in stock. Pigs are the same way. We saw them as being a pretty quick return as well. You're looking at six to eight months depending on if you're buying feeder pigs or breeding them.
And the margins were good. So we started out with that and we grew the pig and the chicken thing to substantially large numbers. We wanted to get into beef, but frankly we just couldn't afford to make that long-term investment in beef in the early years because all of our capital was going back into raising more and more pigs and chickens, 'cause we were doubling every year for the first, at least four years, four or five years. We're not quite doubling anymore. We're growing at about 30%. And that's because doubling, a lot of people don't realize it, it is financially burdensome because you're taking, if you, let's say you make a [00:10:00] 50% profit margin, okay, let's just use that as a example number.
It would take all of your profit to double if you just reinvest that back in next year, just in the livestock inputs, right? So, the first several years, it's like we're doubling, we're doing more and more volume, but we didn't really get to capture a lot of those profits because we were growing.
So now, it finally feels good to be able to grow at like 30% instead of doubling, because then we still have, you know, a 20% margin to work with on, you know, getting more delivery vans. We finally got our first tractor on our farm, like a loader, ever about two months ago. So, that's been real nice.
So, it was pig's, chicken, started out with that. Then we went into turkeys, obviously started doing turkeys mostly for Thanksgiving. Still once a year. We'll do about 700 of those for Thanksgiving. And now we're growing a beef herd. And beef is awesome 'cause there's no input cost on that. I mean, I spend, you know, a thousand dollars a day on pig and chicken feed.
But I spend $0 a day on beef feed.
James Maiocco: Well, [00:11:00] gotta manage your grass and pastures well. Right? So, I assume that you're in a good rotational grazing plan.
Tom Bennett: Yeah, we're management intensive grazing. So we small cells moving 'em every day. I mean, in the winter that goes out the window, 'cause we eventually run out.
So right now, we're waiting for the spring green up to start. So, right now they're on hay that we just buy in hay, but they'll be out on rotational pastures again soon. But beef's a time thing, you know, it's a time investment, not so much a input cost.
James Maiocco: Now you mentioned early on, you know, why would people wanna buy from you versus Walmart if you're selling locally, right?
A confinement product. So, you're not doing that, you're selling a premium product, grass fed, pasture raised non GMO as you mentioned. But let's talk a little bit about the channels that you're selling to. Are you still trying to focus in on locally? Like I know you're also at farmer's markets.
You sell, you mentioned some restaurants too, like what's your customer mix and what's your kind of target radius that you're looking at?
Tom Bennett: Yeah, our customer mix is 97% direct to [00:12:00] consumer, either via our online store or through one of the 29 farmer's markets a week we do. We did 29 a week last season, and we're also gonna stick with that again this year and do 29 again this season. And that's where a bulk of our product goes. We do do some wholesale, to restaurants and independent, like organic grocery stores. We don't aggressively pursue them still. Those are just ones that have reached out to us via, like Instagram, wanted to carry our product. So, we just add that those stops into our Tuesday and Thursday delivery routes.
So it's just like a residential stop for us. It just gets added on. So, yeah, we're not too heavy into wholesale yet. There's so much more room to grow there. I mean, I know guys that built their entire farm just on wholesale accounts, you know, that's not us, right now. You need lots of volume, small margins.
And then, you know, you get stuck with some big wholesale accounts and all they gotta do is, you know, miss an order for one week and it kind of throws your world upside down. So it's like, [00:13:00] during the whole covid issue, when everything shut down, I was doing just fine. You know, it was some of the farms that were like all in on wholesale, they were up a creek.
Because they had no market to sell to, they didn't have, I mean, I've got 60,000 individual customers per year. I might lose a few here and there, but I'm always gaining more than I'm losing. You know, if people move, things like that, stuff happens. It's really hard to lose 60,000 customers at once.
James Maiocco: Yeah.
The resilience you have in your business by having such a diversified and wide customer base is just, again, versus a few wholesale contracts, right. Again, you're not putting yourself in any form of jeopardy, plus you have full control on your pricing. Right. Which is fantastic. Let's talk a little bit about, you mentioned delivery routes a couple times. So, you have farmer's markets, I assume, can people pre-order for pickup at the farmer's markets? And then, talk to me about delivery, 'cause I'm very curious about that as well.
Tom Bennett: Yeah, so they can pre-order for pickup at the farmer's markets. And then they can also choose [00:14:00] from delivery.
So, when they add an item to their cart, the first thing you'll ask 'em is this for delivery or pickup? They just pick which fork they want to go down. And they could do it either way. So, we have to constantly update our farmer's market pickup availability on our online store, because markets changed throughout the season.
So, we need to keep that up to date. You know, I had people call me yesterday, Hey, I'm trying to pick up for Wicker Park tomorrow. I don't see it on the website. I'm like, that's because there is no wicker park tomorrow. It's a skip week market. It's not. They're like, oh, you know, so our pickups on our site are that accurate.
That if they tell me that they're not seeing it on there, I can tell them with confidence. It's because that market doesn't exist tomorrow. So, they can do it that way. Or home delivery. We've got home deliveries going out tomorrow. I just printed off 162 pack list orders for tomorrow's deliveries.
James Maiocco: Wow.
Tom Bennett: And so, that's what we're doing today is building those routes. My barn office manager is building the routes. I'm kind of, it's funny you said, you were talking earlier about how hard work it was. I actually within like the last six months, so we are busier than we've [00:15:00] ever been.
But by hiring key people, like livestock managers and office people, I've actually never felt like I had less on my plate than I do right now. You know? 'cause I'm able to delegate so much of this once we've grown enough that I can afford to pay people to do these specific, you know, areas of our farm.
And it frees me up for a lot more mental capacity to like look at the big picture instead of just like, and nothing burns me more than me out there feeding chickens when like, this could be done by someone that doesn't need, you know, it's good to do that once in a while because you learn a lot and like, I'm the master of chicken health.
I've seen it all, I've done it all. But, I'm at a point now where I can't get bogged down doing $15 an hour jobs because I need to be doing hundreds of dollars an hour jobs, you know, in my head, in the office.
James Maiocco: Yeah. You need to be working on the business, not in the business.
Right?
Tom Bennett: Exactly. And we finally reached that point and it's really nice.
James Maiocco: I was gonna say, with respect to delivery, do you guys charge a fee for that or is there a threshold [00:16:00] which delivery fee free, or like, how do you structure your delivery route.
Tom Bennett: Yeah, on our subscriptions, we do a free delivery.
So, any of our subscriptions that we offer, that's free delivery, that's kind of like the bonus for them to sign up for that is that they get free delivery and then we make sure they know that, like, Hey, also if you want to add on things, like just make sure that you select the same delivery date as your subscription and you'll receive free delivery on those ala carte items, as well.
'Cause we're already coming there with free delivery for your subscription. So, we do charge a delivery fee on our normal orders, up to a certain threshold. I think we still have it at $75. And I know a lot of farms are like, that's crazy. You know, we charge whatever, like customers would pay the delivery fee.
Our delivery zones are so dense. I guess I could put it that like it's really, it's not a lot. We're going three houses down, in some cases. Like in Chicago, you can deliver multiple stops from one parked spot, you know, or there's three customers in the same condo. So, our deliveries are dense [00:17:00] enough that we're not driving long distances for single stops.
And typically even the people who get free delivery, there's a tipping option on there for the farm. And I mean, they'll get the free delivery or use their $5 coupon code, 'cause they're a first time customer and then they'll leave a $20 tip and it's like, well obviously they don't care about the, you know, saving five bucks.
So, that's cool. But, yeah, our delivery fee is $6.95 if it's under $75, unless you have a subscription going with it.
James Maiocco: I know here in Nashville, I pay $15 for our subscription box to get delivered once a month. Right? But like you said, I don't really care. Like I'm more interested in supporting the farmer and making sure that they can pay a wage to their delivery driver.
Right?
Tom Bennett: Yeah. And I mean, I don't like paying delivery fees. If I go to a website for Best Buy and they want to charge me a $20 delivery fee for a tv, I'll just go to Amazon and buy the same TV for the same price and get free delivery. You know what I mean? It's psychologically, a lot of people are looking for that expectation of free delivery nowadays, and we're not making [00:18:00] our money on delivery fees.
You could even go as far as just price your meat a little bit more and build it into the cost of the meat, and then give a free delivery at a lower threshold. I don't know, I'm not saying that everyone should do that, charge as much as you want for delivery, but we were more concerned with volume and we wanted to get the volume up and build a bigger customer base faster.
And I felt like, you know, making delivery more accessible was a good way to do that.
James Maiocco: Yep. And I love the incentive for, hey, if you're making a one time purchase, yeah, it's $6.95, but if you sign up for a subscription, you know, we're gonna bring it to your house for free. And as you said, there's just this beautiful add-on capability.
Just be able to, hey, great, let's add some milk to that order. Right?
Tom Bennett: Yep. And they do too. Yeah. They flood in with orders, right? A couple days before the subscription day, adding on stuff, so.
James Maiocco: Yeah. That's great. What do you feel like has been one of the biggest hurdles you've had from moving from a hobby to a full-time farmer?
Right. Like, how are you managing your time? Right?
Tom Bennett: Yeah. I kind of have a list of some hurdles that I think people will [00:19:00] encounter with growth in a farm. So, one of the most important things that I think is a huge hurdle to people's growth of their farm is that, you know, they'll spend 90% of their time planning and never taking action. You know, sometimes you can't wait to be a hundred percent ready to do something before you do it.
You just gotta jump in and learn how to swim while you're drowning. That's how I go at things and I get way more accomplished than people I know because I'm not afraid to just learn as I'm doing it. You know, you can read as many books as you want, but people plan, plan, plan, and they never actually get around to doing before the idea dies.
So I would say one of the biggest hurdles to growth is yourself.
James Maiocco: That sounds a little bit like getting married or having children. Right? Like nothing can prepare you for it. Right. You just have to jump in and trust God's gotta plan in it ultimately, right?
Tom Bennett: Yeah. Yeah. I'm 41 years old now, and I still can't believe that I'm a parent and I've been a parent for 20 something, you know, I've been a parent for 20 years.
So, it's like I, this shouldn't [00:20:00] be allowed, you know? I still don't feel like a grownup. So another, another big hurdle that people will face, kind of the nuts and bolts of it. You're gonna face cold storage issues, right? Like if you're a meat farmer, that's gonna be one of the first things that slaps you in your face, is that I wanna produce all these pigs and chickens, but I have nowhere to put them. So what people end up doing is, is that they're just producing as much as they can hold in their chest freezers, and then they're selling it, and then they're out, and then they're selling. You need cold storage capacity, right?
Because then you can produce more when the weather's good, you know, and put that away for the off season, like to carry us through the winter, you know? A lot of my savings is actually in the form of pallets and pallets and pallets of meat that's ready to be sold, you know, going into the winter.
So, cold storage, you're gonna wanna find a regional cold storage facility near you. If you start getting into like, you know, you're doing thousands of chickens at a time, we have three walk-in freezers here on the farm. And [00:21:00] we keep those stock with what we'll need each month. And then as we start to run outta stuff, we can just go to cold storage and pick up pallets of chicken or whatever to restock that.
But cold storage is pretty affordable. That'll get rid of one of your big bottlenecks in the beginning. Yeah, I think that'll help people. And oh, mean, we got up to like 18 chest freezers at one point and it just wasn't manageable. Like it's, it's silly. So, get some walk-ins, off Facebook marketplace or Craigslist.
You can get used walk-ins all the time, especially when the economy has a downturn and restaurants start going outta business, walk-ins are cheap. Like a thousand dollars for a 12 by 12 walk-in. Yeah, you can get a pretty good deal on 'em if you watch for it. So, another one of the, the things that I would see is that, one of your hurdles to growth is always gonna be your time too, right?
Like, we've only got 24 hours in a day. So, no matter how rich you are, how poor you are, no matter where you're at in life, me and you both get the same 24 hours. So, it's how you manage that 24 hours that'll [00:22:00] decide, the course of the rest of your life? So, when it comes to growing the farm, I did it almost all myself in the beginning.
Because one, I needed to provide that wage to me. And two, I didn't trust anyone else to be able to do it as good as I was doing it. I was worried that I wouldn't be able to keep 'em employed, you know, through the slow part of the season, things like that, and have the burden of that payroll on me then.
But, one of the things that you can do is hire salespeople, right? Like salespeople are free hires because they are expected to generate more profit for your farm than you're having to pay them, right? So, market staff is how we grew our farmer's markets. Up until last year, I was still doing markets during the week just because I was the fill in for if somebody didn't show up to work that day, 'cause on some days we have nine farmers' markets going at the same time. So, it's a lot of people. But, hire people to represent you at, you know, markets or if whatever your sales channel are, [00:23:00] maybe you got one person that you're paying 'em a commission to go out and get restaurant accounts, you know, and they earn a set amount of that commission off that reoccurring restaurant sale every week while that person works for you.
You know? So, you could do incentive based salespeople to work for your farm. That maybe wanna do it, you know, freelance part-time or whatever they could be. So salespeople, they're always gonna make more money for you than they cost you. So those are easy hires and that's pretty much what we hired in the first few years I wasn't hiring.
James Maiocco: Was that the first hire was salespeople to man the booth for you?
Tom Bennett: Yeah, those were the first hires for like five years. Like I didn't get my full-time like livestock managers until about two years ago. That's when I started releasing some of that to other people. So now we have three, one Livestock Manager, two Farm Hands, and a barn office, we call her like a market sales manager. She basically just works in the office and packs orders and schedules, you know, markets and everything. So, vehicle [00:24:00] utilization's gonna be huge. So, if you, at first when you start out, just use your own vehicles. Don't be embarrassed to deliver in your minivan or your Toyota Corolla.
I did it. I was delivering a Nissan Altima at in the beginning. You know, people, they kind of expect it from a small farm, really. I mean, they're not expecting you to pull up in a box truck or a transit van, they know they're buying from a little farm. So, it kind of has some wholesomeness to it as well, you know?
But once you do start bringing on vehicles, we make sure that we fully utilize those vehicles, right? Because they're expensive and you don't wanna have 'em just, you know, paying insurance and things on 'em every month and not keeping 'em moving. So, with farmer's markets, we'll load up to three markets in one van, and they'll drop a trailer at the first one.
They'll drop another market set up at the second one, and then the driver goes on and does the third one and then picks 'em up in reverse order. Those same vans are used on Tuesdays and Thursdays for deliveries and things like that.
James Maiocco: Got it. And do you have signage on your vans, QR codes, all that good stuff?
Tom Bennett: I don't, you know, I wanted to, but [00:25:00] to wrap all our vans would've been like $10,000 and it would've been really good advertising. I mean, it was many miles as we put, I bought a transit van last June and it's already got 75,000 miles on it, and that's only one of our four delivery vehicles. Like it would be a really good utilization of billboard space, but two things, one, it was expensive and I could spend that $10,000 on beef like stocker calf, you know, there's always something else that seemed like it was more important than vehicle wraps and two, quite frankly, sometimes I'm glad that these vans don't have my name on 'em because I got staff driving in Chicago and like if they cut somebody off, I don't want 'em to like piss people off or anything.
So, it's kind of like we're in incognito mode out there on the road. So, no, they're just plain white delivery vans right now. I do wanna put Bennett Farm's stuff on 'em, but I don't want to go halfway either and just stick on some lettering. I would like to do something that's like a full representation, of our graphics and everything. So, we will get to that. But, when we do get to that, we're gonna [00:26:00] have a big conversation with all of our staff about, hey, like this is customer service. Now when you're driving, like, you know, like you, you're letting people in, you're not running red lights, you're not being a jerk, you know?
So it's, uh.
James Maiocco: You're representing the brand now.
Tom Bennett: Right. Yeah. So, we haven't wrapped 'em yet, but we do want to, but still, I mean, we're always finding other things. I like to spend money on things that are gonna make us more money. And I do think that that would be one of those classifications of items.
James Maiocco: I just asked that question 'cause I know many of our farms who do delivery find that they'll get, you know, 5, 6, 10 signups just off of QR codes in neighborhoods, like you said, when they're doing deliveries 'cause they're stopping the van and everyone else has seen the van. It's like, oh, that's a local farmer.
If they're getting food, man, maybe I can get on that pickup route. Right. Quite simple. Right. So.
Tom Bennett: I agree and maybe that'll be my takeaway from this today is putting that back towards the top of my list. It has been on my list. There's just always something else that seems more important.
James Maiocco: You should talk to Laci.
I know they do quite well over at Tagge's, you know.
Tom Bennett: Yeah.
James Maiocco: She's another [00:27:00] farm advisor. I know they do that quite well. Talk to me a little bit about how you got your initial customers. You know, you talk about the 60,000 you have now. What have been the best avenues to attracting, but more importantly, keeping those customers engaged?
Like how do you capture the information and stay in touch with them?
Tom Bennett: Yeah, so our primary, you know, I'm a one trick pony and that is farmer's markets, so it's like, that's where we built our farm. I'm sure there's other ways to do it, but that is how we met and meet and continue to meet all those customers and build new customers.
I think that's where bulk of 'em come from. That's where we collect emails. That's where we're able to hand out our flyers to tell people to go shop online. So, every single customer that we talk to at a farmer's market, we're giving 'em a flyer to our online store and explain it to 'em that we have subscription options and things like that.
So, even if they don't buy anything from us, it was not a lost opportunity on, you know, letting them know what we can provide them. And so, we've built a lot of that through the farmer's markets. And then, that's [00:28:00] huge for us because that builds the traffic to our online store and the awareness of it.
So, that way in the winter when everything shuts down, 'cause we're in Michigan, we still have that reoccurring revenue throughout the winter, to get us back to the summer market season again.
James Maiocco: Got it. So you're using the markets effectively as a funnel to acquire new customers and then market to them on an ongoing basis?
Tom Bennett: Yeah, it would've been a lot slower growth for us had we not done that. I'm pretty sure.
James Maiocco: Yeah. I'm certain of it. Talk to me a little bit about streamlining your processes, right? Like you started working with us over five years ago and what are one or two of the things that you found most helpful?
I mean, you mentioned subscriptions a couple times. I know I've heard this from other farmers too. Just the recurring revenue. Has that kind of been one of the big things for you?
Tom Bennett: Yeah, the recurring revenue is huge. Especially coming out winter, like this is probably this month and last month are probably the two hardest months as a direct to consumer farm in the north when you're doing meats, because you have huge outlays of capital for production.
Like we're [00:29:00] at full production right now, like feed, livestock, like chicks, all that stuff, but yet we don't have the income yet from those things until, you know, May and June. So, the online stores is really big 'cause it cash flows all that, you know, it gets us through those leaner times. As far as streamlining, we've just gotten better at processes as far as, you know, packing orders, managing inventory.
James Maiocco: You said you have an office manager. What is she helping to do to help make it simpler, easier for your pick your pack crew or for just being able to manage all your inventory?
Tom Bennett: I mean, she's doing everything I used to do, so she didn't like invent anything new.
You really, you just go to your online store, you download, you know, the upcoming orders for right now she's doing Thursdays, so we switched our cutoff time. We used to have our cutoff up until 6:00 PM the night before the delivery day.
And that worked when we were smaller, 'cause I could just come out and pack three orders, you know, that came in after the cutoff, before the morning. But [00:30:00] now, the route is so big that it takes a large portion of the day just to do the routing, 'cause we have to build four different routes and balance 'em and then, you know, lay out all the invoice, staple customers who got multiple invoices together.
And so, we finally pushed that back a couple months ago to two days before the cutoff, and that's been huge, 'cause now we have all day Wednesday to build those routes instead of trying to do it on Wednesday night after 6:00 PM.
James Maiocco: Got it.
Tom Bennett: So,
James Maiocco: that helped streamline some things.
Now, with the size of your business, you know, it's one thing to double when you're small, but now given your size, growing 30% is even probably, you know, proportionally, well, it sounds smaller.
The realistically, it's actually a much bigger amount of growth versus when you were small. So, how are you handling that ongoing growth, as a business, right? Because like you said, there's no additional hours to gain in the day. How are you scaling? What are you finding are the most beneficial investments you're making between people and or prep software to help you [00:31:00] scale your time?
Tom Bennett: So yeah, a couple things. One, you know, when people think of scaling, they think of like, you know, making bigger, when I think of growing this, I look at it more as a replicating, right? Instead of scaling. So, we're taking things that work in small batches, and instead of making them big batches, we're just doing a whole bunch of small batches still, like with growing chicken and things like that.
So, it's more of a replication of what worked when it was small. We're still just doing the same thing, just times 10, you know, 10 more people to do 10 more things to do just 'cause we made profit, you know, with that unit being like it was. So, now we just do a lot more of those units, you know, whether that be farmer's markets or animals. People are the best money I spend all week, right? They're like, I tell my livestock manager, like you are the most expensive tool that I own, like that I buy, you know what I mean? Like, like so they've gotta be productive, you know, you guys have gotta generate more value for me [00:32:00] than you cost me to be here.
You know? And they know that. And we do things with them, like our livestock managers, like we have a profit. It's not even a profit sharing, it's a revenue sharing with our full-time farm staff that have been here for more than a year. So, like Owen, he's my livestock manager. He is amazing.
And he knows that the salespeople, the sales staff that come in, you know, to go out and do markets, they get all the glory and they're nice and clean. They're not doing the hard work in the trenches like he is. But I wanted him to also have some ownership of the farm, like some buy-in, you know, so that way he can feel good when he sees that we're loading up all these cattle to go to the butcher or the chickens or whatever.
So, I give him a gross revenue percentage. It's very small. It's one quarter of 1% is what we started it at because I'm like, man, if this could get outta control fast, like with the way we've been growing. So, we did it as a test, gave him one quarter, 1%, and now we have multiple people that get that.
And so, that way it really gives some buy-in from him, right? So he cares. Our sales staff at the markets, they get a base [00:33:00] hourly wage, plus a 5% sales commission on their gross sales for the day. That kind of buys their buy-in on the whole thing.
James Maiocco: At the very beginning of this podcast you mentioned you're selling milk now from another farm. Right? So, you own the customer base. Talk to me a little bit about, you know, making money off of other products now that you can just source and just pass through and make margin on it given you've got the customers.
Tom Bennett: Yeah. So as Bennett Farms, we produce and raise all of our meats. Like that's all us, that's what we do. So, with the pork, chicken, beef, Turkey, you know, those things, that's all on us. So, one of the best things we were able to do to capitalize on like our success and the growth of our farm, right? Once you get to a certain size and you have this huge customer base, it is like free money to sell them other products from other farms that we didn't have to do anything to produce, right?
So, we're already going out on these delivery routes. We've already got this huge customer base. And so, we partnered with Amish Country Dairy years ago, and now we [00:34:00] buy like from them, as I said earlier, about $2,000 a week worth of milk in the winter, like this isn't even the summer. And we're making, you know, 35% margin on that.
But all of that's free because we were already going to these places and frankly, sometimes some of these customers may have came to us because they could get the milk delivered to their door, and now they're buying meats, so we can't even see what the real net positive is of that 'cause it's hard to fish out.
But it's just, it's super easy. And so we do that. We don't offer lamb, we have no intentions of producing lamb ourselves, I should say. So, we partnered with another farm, Tiger Valley Ranch outta southwest Michigan, and we're selling their lamb now for 'em. There's really good margins on lamb and self-admittedly, they are not great salespeople, but they're great at raising lamb. So, I'm carrying their lamb with their label on it, and that's, you know, helping their farm. And it helps us just because it puts more stuff in our store for our customers to have options.
James Maiocco: What a blessing.
That's just great because ultimately, you know, you're just increasing [00:35:00] your share of the wallet. It's not like the families you're selling to aren't gonna buy milk. They're still gonna buy milk, so why not make it easier? You run a delivery to 'em. Now you just made yourself stickier.
Right? So they're gonna wanna stay with you, because of the convenience of all those things. And the margin's gotta be attractive, like you said as well, right? It's just additional money.
Tom Bennett: Yep. Yeah, it works out really good. Anytime you can create, you know, more profit from something that, like you didn't have to exert any time into, with the exception of the delivery, like it's a no brainer, you know?
So, look at maybe partnering with other farms around you that compliment something that you're not selling, you know? It can make sense. So.
James Maiocco: That's great. Well, looking back, over the last 10 years, is there anything you wish you knew or anything you would've done differently knowing what you know now?
Tom Bennett: Don't be afraid in the beginning, if you feel an imposter syndrome creeping up on you because, you know, in your heart that like you've never been a farmer and now you're farmer Tom, you know? You may feel that for the first couple years. I felt it, because here I am, like never been a [00:36:00] farmer before trying to sell people chicken.
And now I've only been a farmer for a year, you know, at that point. And so, I think the imposter syndrome where you feel like maybe I don't belong, like am I really a farmer? In the beginning like, don't worry, that goes away. I think we all felt it, especially when you start to feel success in the beginning and it's kind of like, just keep going and eventually you'll fill that role that people visualize you as, I guess.
I would say another thing is, you know, I touched on the beginning. Don't be afraid or scared to try something before you're completely ready for it. That's how you gotta go about these things, especially in farming, I think you can't study stuff to death. You just gotta, you know, make sure the numbers work, make sure that you've proven it out, you know, on a small scale.
And then you can grow with that. Schedule all of your butchering a year in advance. I hear people on connect calls, they're like, oh, I just can't get any butchering spots. Well, it's because I probably took 'em all back in December, you know, so use your off season time to call and set up all your butchering for the year, right?
For your [00:37:00] chickens, your pigs, your beef, and then produce to fill those slots, right? Don't just produce the animal and then worry when it's time for slaughter, about finding butchering dates like you're putting yourself in a bad spot. I schedule all of my 2025 livestock have been scheduled since December of 2024.
So, now I just have to make sure that I have enough animals to fill those and we always do. But yeah, schedule your butchering stuff a year in advance. Cash flow will kill you. That will be the death of your farm. If you have problems on a small scale, you better fix 'em before they become problems on a big scale, because you can't just grow your way out of a bad situation.
Right? If it's a bad situation at a thousand, it's gonna be something that sinks your life at a million. You know? So, figure out your margins, figure out what's profitable, what works. Cut the stuff that doesn't, don't be afraid to say no [00:38:00] to customers on things. They will eat up your day with their special requests and odd stuff that just, it's like I ain't got time for that. I mean, learning to say no is probably one of the most liberating things you'll ever do in life. And I'm a people pleaser. Like I wanted to say yes to everything and everyone, especially in the beginning, 'cause every customer like, gosh, I was just fighting for every one of 'em.
So, they would ask me off the wall stuff like, can you just bring half my subscription this week and then half next week?, 'cause I don't. No. And now I have no problem saying, no, we don't do that. It comes once a month, you know. Sorry. I can't hold that mental space in my head for five minutes a month to give to you, so that way you don't get any medium eggs in your dozen when it comes. Like's not doing that. Like it people, they'll text or they'll message me about, Hey, I have a delivery scheduled for tomorrow. Or I'll have a delivery schedule for next Tuesday, but I was wondering if instead you can just bring it to the [00:39:00] market tomorrow or whatever.
And I'm just like, because they think they're saving me time and I'm just like, no, not really. I would rather not, you know, sometimes I can change stuff like that, but it would be like calling Amazon and saying, Hey, I just want to pick up my order at the fulfillment hub.
I know you guys were gonna bring it anyways, but I'm gonna save your driver, you know, a trip to my house. Let me just get it from the fulfillment center. Like, that would screw up Amazon's world. Right? Well, it doesn't screw up my world, but I've got a lot going on and like you just robbed me of 10 minutes of mental capacity for something that you thought you were helping me on, but you're not like, let us just deliver it. You know? Because we're already there. There's a software and a process that puts all this stuff in order. That's how we mess stuff up, you know, is when we pull stuff off from what was supposed to be a delivery and then just hand it to somebody instead somewhere else.
And so, I say no to that stuff too.
James Maiocco: That's great. You run the business that works for you, right? For you as a farmer. Yeah. You can't placate all these individual [00:40:00] requests. Well, hey, I wanna be respectful of your time, farmer Tom, I like calling you farmer Tom. Now you, you coined it. That's great.
Let's wrap up with a little bit of an outlook. What does the future hold for Bennett Farms? You know, you guys been at this for some time. What are you hoping to accomplish this coming year?
Tom Bennett: This coming year, the future is big on beef for us.
So, that's gonna be the next growth phase of our farm. Keep in mind, like we got to where we're at right now with, I mean, we've done beef a little bit, but we haven't even scratched the surface on beef. I mean, I'm harvesting two beefs a month right now. That's it. And so we're growing our beef herd.
There's so much potential with beef, so, I think we can get, you know, another 60% growth of our farm just with that one product alone, at least. But once we get this all, I'm putting everything in place right now. The people, the team, the staff, my goal for 2025 is for if I died tomorrow or stepped away from something here, the farm [00:41:00] wouldn't miss a beat without me.
I'm trying to make it bigger than me, you know, and that would be awesome. Not that I want to do any of that. I'm still gonna be here micromanaging everybody's stuff, but I don't wanna have to be, you know, and it is getting to that point. We just came back from a 10 day vacation last week, and the farm ran smoothly and excellently.
I didn't have to do anything, like they proved that they could do it, so that's awesome. So, we'll just continue to hone that.
James Maiocco: Well, well done. You are not just a fantastic farmer, you're also a fantastic businessman, making again, good hard decisions and so, well done, and thanks for sharing your advice.
So, I wanna extend my thanks to Tom for joining us on this week's podcast episode. Hopefully you enjoyed it as much as I did. You can check out more of Tom and Bennett Farms on the Instagram @BennettFarmsMichigan. So, that's @BennettFarmsMichigan with two Ns and two T's. Here at Barn2Door, we're humbled to serve thousands of farms all across the country, and delighted offer services and tools help farmers access more, customers, [00:42:00] increase sales and save time.
If you're an independent farmer who's just getting started or looking to save time in a large growing business, you can go to barndoor.com/learn-more. Thank you for tuning in today, and we look forward to joining you next time on the Independent Farmer Podcast.
Thank you for joining us on the Independent Farmer Podcast. At Barn2Door, we are passionate about empowering independent farmers to build a thriving business. To all the farmers out there, thank you for all you do to grow amazing food, care for the soil, and serve your local communities. You are the backbone of our country.
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