- Look for no-cost or low-cost financing tools. For example, if you can use an alternate line of credit at zero percent or your own working capital for inputs and other operating costs, you’ll avoid interest expenses. Those money charges may seem like a small thing in the overall picture, but they add up.
- Know your numbers. Before you buy your inputs, make sure you know your numbers. If you can lock in a price that works for your business, it’s a good move. Make sure you actually operate from a business budget that identifies your costs on a per-acre or per-head basis. This is a powerful tool for knowing your business costs and successfully reducing them.
- Be smart about pre-paying inputs. Whatever your farm’s necessities — fuel, fertilizer, crop protectants, feed, irrigation supplies – it’s possible to shave off some costs by negotiating with your vendor. Maybe he or she would be willing to take $45,000 if you pay now, rather than $50,000 later. Maybe your vendor needs to get rid of some lingering warehouse inventory and is willing to discount the cost to you. Call today to discuss ways to increase your profit margins. A 10 percent saving here, a 1 percent cut there, selling your crop in the money, will add up significantly.
Yes, you have to buy fuel, fertilizers and other essentials. But you can likely find a cheaper way to do it.
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Reading Time: 2 minutesEvery little bit helps in agriculture today. Margins are so tight that anything you can do to gain a little ground is almost mandatory. In this price environment, there nothing wrong with only getting to second base. Here are three ways to trim input and overhead expenses to help you gain a competitive edge: