FarmFan is shutting down Jan 4th, 2019

Dear FarmFan Customer,

As of January 4th, 2019, we are going to discontinue the FarmFan service.

Thank you for coming on this journey with me and my team. Since we launched in 2014, FarmFan has sent over 2,500,000 text messages to farmer’s market customers.

In five growing seasons, I’m proud of what we accomplished with FarmFan, but it never achieved the critical mass of farms and markets to make it a viable long-term business. It is time for us to say good bye the FarmFan.

We will take some of learning from FarmFan and apply it to our Harvie platform and allow farms to send text message reminders to their members when farm shares are delivered to a site.

In the intervening years, there have been a variety of text message reminding programs that have come on the market for more general use so if you want to keep doing text messages for your market customers, you should be able to find a service to do that.

Creating new products is messy work and some things work and some things don’t. That is the nature of the work I do. After 12 years in this business, that is one hard lesson that I have learned. I’m proud to say that we will keep innovating and working along side you.

If you have any questions, please let me know.

Best and thank you!

-Simon Huntley
Founder and CEO, Harvie & FarmFan

Sales Channel Profit Margin Analysis Spreadsheet

My core mission at Small Farm Central / Harvie is, “make local farmers more profitable.”

As a local farm, you have many different sales channels available to you. For example, as some farms saw CSA sales decline, they shifted their sales to “small-scale wholesale” like aggregators or restaurant sales.

Or you may be trying to decide between running a traditional CSA and transitioning to Harvie — how will the extra costs and benefits effect profit margins? This spreadsheet helps me to be confident that I can help farmers be more profitable even as they pay us a higher fee than before.

Or perhaps you are considering moving to larger scale wholesale from direct-to-consumer channels: how will this change effect profit margins?

Each sales channel has a different cost and profitability profile and I realized that I could put this all on one spreadsheet so I created this “Sales Channel Analysis Worksheet” that is freely available on Google Sheets:

I have gotten feedback from several growers on this, but I would love more feedback and to keep improving this spreadsheet.

I have added comments to many of the cells to describe the thinking behind each assumption. Feel free to add your own comments and reply to mine! I think this can become an excellent resource for our community going forward.

To put in your own numbers, go to:
File > Make a Copy

I would love to see your work so share back with me!

The most interesting lines for me are row 38 with “Profit margin” and then extrapolating from that, ” Gross sales needed for farmer salary” (row 40). This data point describes, at a given profit margin, the scale of sales you need to drive through a sales channel to provide a fair farmer salary. However, “farmer salary” may also be paid through other line items like labor percentage (rows 3-6) or admin cost percentage (row 13), so that should be taken into account as well.

This spreadsheet does not tell the whole story of farm profitability of course and each farm will have different numbers, but I think it is a useful of making decisions and planning the long-term future of your operation.

How to Increase Lifetime Value of Member from $600.81 to $1,222.57 (+103%!)

I’ve talked for years about how retention is a key statistic for a farm share program. High retention means happy members, less work and marketing cost to maintain membership each year and it makes growth much easier!

There is also an argument I can make with math that makes it clear why retention is so important.

Here is a video describing the results:

Introducing Lifetime Value of Member

Lifetime Value of Member (LTM) is the measure of how much a member will spend with your farm over the life time of their membership.

Our newest staff member, Pablo is also a data guy so he has been digging into retention numbers on Harvie now that we have year-over-year data. We can compare that to data that came out of Member Assembler with the “CSA Farming Annual Report” that we did in 2014 and 2015.

In the 2015 Annual Report, we found the average year-over-year retention rate for CSA / farm share to be 46.1%.

For Harvie, we are seeing an average retention rate of 67%. That is a relative increase of 45% over a traditional CSA program.

This is a huge increase and validates the year of customer research that I did before developing the concepts that underlie Harvie.

So how does this translate to the bottom line or the “Lifetime Value of Member”?

So for a traditional CSA farm at 46.1% retention, on average each member will be retained for 1.29 years. Using the average cost of a farm share from the 2015 CSA Farming Annual Report of $465.75/year, the Lifetime Value of Member is $600.81.

For a Harvie farm share, to do a fair comparison I will use the $465.75/year and then add in 5% “delivery extras” sales because that is how much we see, on average, that members add to their share each week giving us $489.03/year.

At the average Harvie retention of 67%, each member will stay for 2.5 years. So the Lifetime Value of Member for a Harvie member is $1,222.57.

So this difference in retention takes the Lifetime Value of Member from $600.81 to $1,222.57. That is an 103% increase in LTM! Wow!

To be clear, this means that every Harvie member is worth twice as much a traditional CSA / farm share member.

Now take that increase, invest in marketing, invest in efficiency, invest in your employees, invest in your quality of life, or invest in spending time away from the farm with your family.

This is why I do the work I do. It is gratifying to see that my hunches and my research on how we can improve the profitability of CSA / farm share programs are being validated in the data.

“You’re Really Going to Pay That?” or How I’m Going to Make your Farm More Profitable

[Also in this series: The Albatross of Vegetables,  “We sold out 7 weeks before first delivery…”, Here’s how I help market farms  ]

(No time to read? Harvie is the kind of cost that makes you money.)

Dear Farmers and Supporters,

At the root, my work for the last 12 years has been about helping local farms achieve profitability. That’s my ultimate vision: that farming the way we do can and should be economically sustainable to the farm family and the people who work on the farm. (Read One Dollar, One Vote.)

I want to help farm achieve financial success, but to do that we need to charge for our services.

So, the case I must make with farms is, while you pay us, Harvie will at least maintain profit margins, if not increase them. If I can’t make this case, your farm should not adopt Harvie.

Here’s what farms using Harvie say about the cost of the service:

“The cost of Harvie seemed steep, and we definitely hesitated before signing up.  What we’ve realized is the cost isn’t just for great software, it’s for marketing assistance and customer service support, too.  I’ve spent significantly less time answering and solving basic questions like how to put a hold on a box, how to set a vacation hold, questions about payments, and so much more.  Our customers, even longtime members who would support us no matter what, have been extremely happy with the Harvie system, and tell us all the time how much they love it.  It’s hard to imagine going back to the old way of doing things, and I love giving our customers what they want.”  – Barr Farms

“We’re loving everything about Harvie. I initially was thinking my goodness a % of my sales goes to a tech company…and geez, another % to credit card processors??? In all reality, it works so well and the support that you receive with Harvie is amazing. You know when you finally get to that point that you can buy a really high quality tool that works so well in so many conditions….that’s Harvie. But that’s not it. They have people on their team that help create promo and marketing material for your farm. Its really exciting to be part of a great network of enthusiastic farm people. I’m a total cheerleader for Harvie because its helped my business.” – Sustainable Harvest Farm

“As a farmer using Harvie I can tell you that the fee is pretty easy to justify in saved time. I suspect I am one of the smallest farms using the platform, but this year for about $150/wk I’ve cut my share administration time down to about 30min/wk, increase customer satisfaction by miles and take two mornings off farming a week to spend at home with my toddler. I no longer have to track payments, deal with a complicated inventory system like when I used Farmigo, or even answer customer emails most of the time as Harvie support has usually answered and sorted requests or problems before I even sit down for lunch and check my messages. Best of all, almost all my work time is now spent farming! I haven’t tracked hours to be sure but I believe I’m saving several hundred dollars per week.” – Daniel, Country Thyme Farm

How much does it cost?

$500 one-time set up fee

7% of sales, with discounts for farms over $250,000/yearly revenue

3% fee for credit card transactions

Simple. We only get paid when you get paid.

What does this include?

  • The technology platform to run a high retention CSA / farm share program
  • Cooking Suggestion Engine: members get recipe and cooking preparation suggestions based on their box
  • We’ll set up your Harvie site for you
  • Marketing / sales assistance, consultation, and resources
  • High quality customer support both to you as the farmer and your consumers
  • Training from set up to setting delivery estimates to delivery logistics
  • On-going support from my team to make sure you are using Harvie

How to pay for it?

This is an increased cost, so you must account for this in your margins. There are a variety of areas you could look at to justify the added cost:

  • Many of our farms increase prices to cover the fee since this is a service to the customers.
  • Many farms give 10-30% more retail value in shares than members pay for. With Harvie’s technology and customized shares, members get what they want and they get retail value. This means that our farms can generate 10-30% more revenue off the same production.
  • Decrease in admin time means saving on staff costs – many of our farms report not needing a dedicated farm share manager.
  • Harvie helps farms grow membership so the same equipment can be used to serve more members which increases profitability.
  • Moving farm sales from low margin channels like wholesale to high margin farm share sales increases profitability.
  • Reduced marketing expense due to higher retention rates.

Cost-Benefit Analysis

If you are a “numbers” person you will appreciate this Cost-benefit analysis spreadsheet to quantify the added costs and benefits of Harvie. Download your own copy and edit with your own numbers using these instructions or I can work through this with you.

For example, an average 250 farm member farm will see a yearly net-benefit of $72,000 by joining Harvie.

Harvie is the kind of cost that makes you money.

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