Running a farm isn’t easy – especially with prices at an all-time low.
If you want to run a successful, profitable operation, though, you have to approach things like a CEO. Smart equipment purchasing and maintenance strategies are a big part of that.
Here’s what we’ll cover:
- Why equipment purchasing strategies are important
- Approach equipment purchasing like a CEO
- Create a relationship with your agricultural equipment dealership
- Don’t waste money on technology
- Adopt maintenance strategies that save thousands
Ready? Let’s go!
Equipment Purchasing Strategies Are Important
The farm equipment industry is booming.
As reported by Grand View Research, the expected market size is $169.55 billion in 2024. But what does this massive equipment market mean for your operation?
Simple…
Equipment purchasing strategies matter more now than ever.
Instead of impulsively buying the latest tractor du jour, smart farmers are developing strategic relationships with their dealerships. Align yourself with an agricultural equipment dealership that understands your operation – like those offering Case IH and Kubota equipment in Madisonville – and you’ll set yourself up for success.
Here’s why:
Equipment repairs during planting or harvesting can cost your operation thousands of dollars each day. If you don’t have the right relationship with your dealership, you might experience lengthy downtimes while you wait for service or parts.
Don’t let this happen to you.
Approach Equipment Purchasing Like A CEO
You don’t see CEOs making impulsive purchases, do you?
They analyze the cost, scrutinize the return on investment, and think about their decision overnight. So why would your approach to buying equipment be any different?
Farm owners should be doing the same thing before walking into an agricultural equipment dealership.
Instead of rushing out to buy that new plow you’ve been eyeing, take some time to consider your operation’s needs. Do a thorough analysis of your current equipment fleet and find out where you have gaps that new purchases could fill.
This process should also include the math behind purchasing new equipment.
Yes, equipment brings your operation value. But at what cost?
By having a firm understanding of your equipment needs, you can walk into any dealership confidently. You’ll know what you want, and you won’t be affected by salespeople pushing the newest and greatest item off the showroom floor.
Build A Relationship With Your Agricultural Equipment Dealership
Did you know…
Most farmers don’t realize that their relationship with their dealership can make or break their operation’s success.
Here’s what a good dealership relationship looks like:
- Factory-trained technicians who actually know how to service your equipment
- Guaranteed service availability during peak seasons
- Trade-in programs that get you top dollar for your old equipment
- Parts inventory that eliminates unnecessary downtime
These dealerships take the time to learn about your operation. They want to know what crops you farm, your average acreage, and the types of soil you work with.
Why?
This information allows them to make better equipment recommendations.
Too many dealerships try to upsell you on equipment that isn’t necessary. But when you have a trusted relationship with the dealership, their suggestions should be made to truly benefit your bottom line.
Don’t Waste Money On Technology
If you haven’t jumped on the precision agriculture train yet, you will.
USDA Economic Research Service reports that more than 70 percent of large farms use guidance autosteering systems. And with new technology advancing every day, this number is only going to get bigger.
But don’t just buy technology for technology’s sake.
Approach every technology implementation like a CEO would. Here’s how:
- Define clear goals you want to accomplish
- Choose technology that seamlessly integrates with your current equipment
- Train your operators on how to use the technology
- Review your results and make adjustments moving forward
Want more examples?
GPS-guided steering implements, yield monitoring systems, and variable rate technology are game changers. If used correctly, that is.
Far too many farmers spend money on the latest gadgets without ever learning how to use them. And when that happens, you’re wasting money.
Partner with an agricultural equipment dealership that can provide your operation with the necessary training. It’ll be well worth the investment.
Adopt Maintenance Strategies That Save You Thousands
When equipment starts failing left and right, it’s time to adopt a new maintenance strategy.
All too often, farmers wait for something to break before they address the issue. But just like with your car, maintenance on farming equipment is essential.
Here are a few things you can do to save money in the long-run.
Schedule routine maintenance.
Follow the manufacturer’s recommended maintenance schedule religiously. Doing so will prevent unlikely failures from happening.
Implement a fluid analysis program
This program will help identify issues with your equipment before they turn into bigger, more expensive problems.
Train your operators.
Just because you bought a piece of equipment doesn’t mean your operators know how to use it. Provide them with the necessary training to ensure everything is being used properly.
Hold on to critical parts.
Having to deal with downtime is never fun. Keep parts on hand that will prevent your operation from sitting idle.
Another perk of maintaining your equipment is having all of your data handy.
If you have service records, parts receipts, and can produce a history of repairs for each piece of equipment, you’ll be able to identify patterns.
That tractor you’ve had for 10 years may look like it’s still going strong. But if your repair costs have increased each year, it may be time to trade it in for a newer model.
When it’s time to talk to your dealership about purchasing new equipment, you’ll have all of the facts.
Equipment Financing Like A CEO
Another thing CEOs know?
How to manage cash flow.
Equipment purchases can drain your operations’ cash reserves. But what if there was a way to preserve your cash?
Uhm… Yeah. There is.
Equipment financing.
Purchasing new equipment doesn’t always mean you have to buy it. Explore your options when it comes to financing and discover a method that works for your operation.
Popular financing options include:
- Traditional equipment loan with flexible repayment terms
- Operating lease (short-term equipment needs)
- Lease-to-own agreements
- Pre-owned equipment with certified warranties
There are pros and cons to each of these financing options. But the right one for you will depend on your operations’ cash flow and long-term goals.
When working with an agricultural equipment dealership, ask about your financing options. A reputable dealership should walk you through each option and help you decide which is best – no pushing certain contracts.
Scale Smart With These Equipment Tips
Expanding your farming operation means investing in new equipment.
But buy too much equipment, and you’ll destroy your cash flow. The key is scaling smart.
Here’s what smart farmers do when scaling:
Purchase equipment that fits your operation’s current needs, but can also grow with you. This may mean spending a little extra on a larger tractor. Or, it may mean custom hiring equipment instead of buying it.
Asking yourself these questions can help you decide if an equipment purchase makes sense:
- Will my equipment have enough hours?
- Do I have the infrastructure to support this equipment?
- Do I have any operators trained on this equipment?
- What is the resale value of this piece of equipment?
Just because you need something doesn’t always mean you should buy it.
Prestige buying happens too often in agriculture. Spend your money wisely and think about your purchase as a CEO would.
Wrapping Things Up
Running your farm like a CEO isn’t difficult. But it does require you to think about every equipment-related decision you make.
The farmers who run their businesses like successful CEOs:
- Build strong relationships with their dealership
- Think about the total cost of ownership, not just purchase price
- Only spend money on technology that provides a return on investment
- Maintain their equipment instead of reacting to breakdowns
- Strategic finance equipment purchases to preserve cash flow
These may be the largest investments your operation will make. So take your time, weigh out your options, and don’t overbuy.
Your future self will thank you.
