Edition #11

September 16, 2023

Good morning and welcome to the Braintrust Ag newsletter. **Opening this email is like that first deep breath of a fresh fall morning…drink it in.

A few notes to begin:

• Check out the new website, please: https://braintrustag.com/

  • It’s a simple v1 & I’m no creative web designer, but it ought to help explain more about what Braintrust Ag has to offer.

• If you’d like an invitation link to the community page, throw your email into this form & I’ll get it to you.

• Last Thursday’s SOIL Gathering was great - we discussed strategies and tools for calculating breakevens and their importance. Hope you can join us for the next one.

Alright, let’s get to the topics that will help you build a strong, sustainable agri-business.

-Clint

Here’s what we have this week:

• 🐮 Ag-adjacent Side Hustles

• 🗣 Headlines

• 💡 P&C Insurance Tips: Part 3

• 💲 Finance Roadmap

• 👨‍👩‍👦‍👦 Why an estate plan? Part 2

• and more…

“AG-ADJACENT” SIDE HUSTLES

Idea Breakdown

For the next few weeks we’re going to be looking at some ag-adjacent side hustles and do a breakdown on them. Last week we outlined what they are, why start one, and an overview of how to start one.

Let’s dive into our first breakdown.

Fencing Business

No, we don’t mean two people with mesh body armor and skinny little swords.

Description: A fencing business could offer a wide range or services. From very broad (from simple repair to complex welded feedyard fence and everything in between) to very niche services (only smooth wire & tape for horse owners). The key will be to focus on agricultural fence and avoid the inevitable calls from folks in town to build their privacy fences.

Potential Services:

• Spring Pasture Repair

• OId Fence Removal

• Setting Posts & H-Braces

• Hanging/Building Gates (purchased or welded pipe gates, barbed wire pasture gates)

• Pasture Fences (smooth braided, barbed, electric/high tensile, woven, fabric/tape)

• Feedyard Fences (sucker rod, continuous panels, guard rail, wooden)

Start-Up Costs: Medium

Depending on the services offered and available assets, this side hustle has a range of low-medium costs to get started. For full-scale services, here’s some equipment needed:

• Hand tools (fencing tools, stretchers, hammers, pliers, drill, impact, wrenches, sockets, chainsaw, etc)

• Four wheeler/UTV

• Pickup & Trailer

• Skid steer/Tractor

• Attachments (post puller, pallet forks, post pounder, grapple bucket, wire winder)

The Good:

• Job length

• High demand

• Flexible schedule

• Word of mouth advertising

• Little prior training & knowledge needed

• Proximity to landowners, farmers, and ranchers

• Most necessary assets will also help on your farm/ranch

The Challenges:

• Seasonality

• Travel Radius

• Quality Labor

• Equipment costs/rental availability

Here’s what I’d do:

Unless you have prior access to the larger equipment, start small. A reliable four wheeler and an assortment of hand tools will get you in the door. Contact all the area livestock producers and offer fence repair services. Keep it simple and charge by the hour or job.

This can be done solo or with one other person. Charge enough so at least 25% of prospective customers say you’re too expensive. That’s the sweet spot. Save up cash to add more equipment and offer more services.

When you decide to start fence install, rent as much of the larger equipment as possible. Bill the rental fee directly to the farmer/rancher. Make the farmer/rancher pay for all supplies. You don’t want to front those costs when you’re just starting out. Build unbelievably great fences.

Eventually, buy equipment and start sourcing (procuring) the posts, wire, panels, etc. Charge a 20% markup on all materials you supply to the job. This is going to take good inventory management.

Overcome the seasonality by renting access to a shop. In the winter and during rain days, start welding continuous fence panels, free-standing panels & windbreaks, and gates. Offer these for sale or use them for new fence construction.

Keys to Success:

• Balance service work with bidding new jobs and keep your pipeline full

• Manage cash flows and inventory and keep healthy cash reserves

• Find and retain quality help (pay well & keep busy year-round)

• Start small and build offered services over time

• Keep debt small to non-existent

• Commitment to quality

Conclusion

This ag-adjacent side hustle checks the box on our two-part test:

1. Does it compliment your current or future farm enterprise?

2. Does it put you in proximity of other farmers & landowners to build relationships?

A fencing business focused on agricultural needs offers a robust and flexible side hustle with considerable room for growth and diversification. The business model is scalable, allowing entrepreneurs to start small and gradually expand into a full-scale operation.

Key services can range from spring pasture repairs and old fence removal to offering a one-stop solution for local farmers and ranchers. Though challenges like seasonality and equipment costs exist, these can be mitigated through strategic planning.

Mini Breakdown

Bookkeeping

Every ag operation needs bookkeeping services, and many would like to outsource them. Here’s a cheap and easy side hustle that, due to it being digital, could become as big as you’d like.

1. Take a course in proper farm/ranch bookkeeping

2. ID an accounting software and become proficient

3. Offer remote bookkeeping services to every Tom, Dick, and Harry who has an ag operation

4. Create streamlined & secure method for producers to send receipts

5. Connect with tax preparers and offer to coordinate their tax returns

6. Hire remote bookkeepers (could be international) to follow your processes and procedures

7. Talk about it online and scale

This is a good one that has very low start-up costs, little seasonality, high flexibility, high demand, and high scalability.

Do you have an ag-adjacent side hustle idea you’d like to see a breakdown on? Email [email protected] and it might be featured in an upcoming newsletter.

RESOURCES UPDATE

A handful of resources available for download I’d like to highlight:

Breakeven Worksheet - Crops

Our recent SOIL Gathering focused on breakevens. Use this worksheet to calculate your breakeven price or yield for your crops.

Located: Resources > Budgets > Breakeven Wkst

Simple Annual Cash Flow Projection

Often we get too complex with our financial models and analysis. Use this basic spreadsheet to see if your upcoming plan will be profitable.

Located: Resources > Budgets > Simple Annual Cash Flow Projection

Livestock Rental Lease Agreement

Sometimes it makes more sense to lease livestock instead of buying them. Use this lease agreement template to protect both parties during the transaction.

Located: Resources > Leases > Livestock Rental Lease

SEEDS

• 🚫 Pipeline Paused: The controversial CO2 pipelines that have been making headlines in South Dakota and across the nation have been momentarily halted. Both the Navigator CO2 and Summit Carbon Solutions initial applications have been denied. They can now either submit new applications or appeal the decision.

• 🌾 Specialty Crops: The Specialty Crop Multistate Program has received an additional $10 million in grant funding, according to the USDA. This comes on the heels of the $72.9 million funding announced earlier. The funds are proposed to help with marketing and competitiveness of the specialty crop industry.

• 🍅 Indoor Farming Trouble: A Martha Stewart backed indoor farming company in Kentucky has recently filed for bankruptcy. AppHarvest began supplying major grocers with tomatoes in 2021 and is restructuring its $341 million of debt.

• 🏦 Lender Viewpoint: This article dives into how producers can better position themselves with their lenders, specifically from a collateral standpoint. Lenders are risk assessors and it’s important for producers to understand the 5 C’s of credit.

• 🚜 Monster HP: Case IH announced it’s cranking up the horsepower in its new Steiger 715 Quadtrac. With peak horsepower at 778hp, it’s Steiger’s biggest tractor to date.

FINANCE

The financial side of business can often be the most confusing part. That applies to farms, ranches, ag-adjacent side hustles, or any business you’re operating.

When it comes to finance, ignorance is not bliss. ESP Joey DeWit put together this roadmap to help give some structure to small business finance:

INSURANCE

A Macro-Look at P&C Insurance: Part 3

Click here to see Part 1

Click here to see Part 2

Provided By Endorsed Service Provider — Steve Hasche

The insurance marketplace is tightening up, as we’ve explored the last two weeks…

Here are some things you can do to help get through this current insurance market:

• Consider Higher Deductibles. This will help save some money on your policy.

• Safe Driving Telematic Programs. Telematics can reward you by giving you a discount for good driving.

• Discount Reviews - make sure you're getting everything you're entitled to. Every carrier has different discount opportunities. Make sure you go over those with your agent.

• DO NOT let your policy cancel or lapse for any reason. Carriers are not reinstating coverage as easily as they once did. If it does cancel, they may require premium in full before reinstating. This is across the board for every line of coverage.

• Bundle your Auto and Home for more discounts and more stable pricing. Bundled/Packaged policies most always include better coverage and benefits and the cost savings is usually 10-15% (or more) on each policy. Many business risks can also bundle options.

• Consider tenure - jumping companies too often will hurt you in the long run. In addition, some carriers won’t take you as a new client if you have less than two years with a carrier. And more importantly, carriers are getting off of some risks if a claim happens in the new business term or for the number of claims in a 3-5 year window. Tenure matters with a carrier.

• Follow the laws so you don’t get any tickets. Those tickets really add rate to your policy and stay on your record 3-5 years, depending on the carrier.

• Absorb small claims when you're able, and save coverage for catastrophic losses. Talk with your agent and let them claims counsel you should a loss happen. Stop using your towing or roadside assistance as a maintenance policy. Frequency of claims REALLY matters. A lot.

Lastly, please remember that we are agents for the carriers. We don’t make the rules, we don’t have control over the rates and we don’t make the decision if your policy is cancelled by the carriers.

We are here to help educate, make sure you have the best insurance for your situation, manage your account with the carrier, and claims counsel when needed. We are doing our best to manage carrier changes with client needs.

Want more? Discuss directly with Steve: [email protected]

SUCCESSION/TRANSITION

I recently met an awesome attorney who works with estate & elder law matters. With two offices in rural Indiana (and one in the ‘burbs) she has many farm family clients. When asked for some content on estate planning, she gladly helped! (also, you should follow her on X @jennyrozelle)

The Importance of Creating an Estate Plan: Part 2

(Provided by Indiana Estate & Elder Law)

Some people do not plan because they are under the misconception that estate planning is only for the rich and famous. That is simply not true. Estate planning is for everyone. Not everyone will have the same needs and that is why finding a good estate planning attorney who will focus on your specific goals is so important.

Others feel that making an estate plan takes away all of their control over their property. This is also a misconception. A good estate planning attorney will explain your options according your individual goals. That plan will ensure that you have as much control over your possessions as you want to ensure that your goals are achieved.

Still others feel overwhelmed at the thought of where to begin. Just like every project, you begin at the beginning and start with determining your goals. Then gather your information. This may be educating yourself by attending a workshop or reading books from the local library. Next, consult with a professional and determine if that person understands your goals and can help you design a plan that developed from your vision. Finally, once a plan is in place, don’t put it on the shelf and forget about it. As your life changes, your plan may need to change with you.

I don’t know how many times I have heard family members express their gratitude that their loved one had a plan in place. They now have instructions about how to proceed directly from their loved one and they can fulfill their loved one’s wishes knowing they are doing “what mom or dad wanted done.”

Estate planning provides you with peace of mind knowing that a plan is in place. It also allows your loved ones to grieve without the stress of trying to figure out what happens to everything you have left behind.

Benjamin Franklin was not lying when he said, “lost time is never found again.” Make today your day to give yourself and your family the peace of mind deserved.

Disclaimer

This is not legal advice. This is in the nature of general information, not specific advice. For estate matters, always seek legal advice from an attorney within your jurisdiction.

MEME OF THE WEEK

That’s a wrap, folks.

Until next week, thank you to everyone involved in ag. Come engage on the new platform & let’s grow profitable ag businesses together.

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DISCLAIMER: All content, communications, and resources provided by Braintrust Ag, its principals, operators, or members is intended to merely be educational and entertaining. Nothing published by Braintrust Ag should be relied on as legal, financial, investment, or other professional advice. Investments and legal matters involve substantial risk and are not suitable for all individuals. It is recommended to enter into a client relationship with an ESP for obtaining professional advice.