Why did Tierra Miguel Farm Close? Part 2

This is the continuation from yesterday.   I want to stress that this isn't meant as a rant.  Nor is it meant to place blame.  I was at Tierra Miguel.  So naturally I have to shoulder some of the burden of the place closing.  This is only me trying to find some good out of a terrible situation.  I need help understanding how something so good could go away.

5.  Loss sight of core business - There were just too many extras.  We forgot that the CSA paid the bills and we allowed it to dwindle to a point where it was not even covering operational costs.  There were too many distractions - namely the grant.  See below.

6.  Operational costs exceeded revenue.  There was a whole host of costs incurred by the farm that shouldn't have been there.  We bought in compost because an effective composting program wasn't in place.  Our irrigation was old and leaky which was essentially throwing money out the window.  Our soil needed extreme love.  We were constantly using it which meant it needed lots of water and compost.  Having too big a presence in Los Angeles and not locally added to our delivery costs.  The chickens, sigh, the chickens.  We got them without a clear plan or budget for them.  Nor did we have the infrastructure in place - prior- to help us realize sales from them.  So they became something we had to pay for rather than a viable enterprise on the farm.  Salaries were too high.  It was a nonprofit.  Granted some of the salaries were paid for by the grant but the grant was reimbursable.   So we had to make the money first.

7.  No significant advertising or marketing.  We couldn't afford to hire a marketing pro.  Plus as you drove down 76 or Cole Grade Rd there was no signs advertising our place.  We hit up Facebook but that had such a limited audience.  We were starting to get word of mouth but that was due to the flurry of energy given by all near the end.  Word of mouth is the best form of advertising but it requires excellent customer service and a great product.  Both of which we had been lacking till several months ago.  Too little too late.

8.  Non-profit model - fundraising.  This was something we did not do.  Technically, it was also part of our core business.  We had lost our relevance in the community.  By not being out there, every day, showing and telling people what we were doing for the community, they forgot about us.

9.  Lack of people - It is 85 acres.  It is also a teaching center and the grant home.  There was too much work for the small staff.

10.  Decrease in quality / undervaluing product - The quality of our product declined over time.  This is an effect of losing sight of our core business.  But when we did have a decent product we undervalued it.  We needed the sales because of our large operating costs and debt.

11.  Wholesale - This is the death of a small farm.  Whenever you add a middle man you are devaluing your product.  Not only do wholesalers want your product cheap they also demand you use their packaging which adds to your cost not theirs.  I'm very angry about this and since this is my blog here it goes.  Wholefoods isn't as great as they make themselves out to be.  Remember what I said about a business is a business?  The free market doesn't care.  Well Wholefoods understands that very well.  A second place I dislike and will never do business with is Moceri.  We got into a position where we owed them money.  They threatened collections unless we sold them cases of strawberries for almost half what we normally sell them at wholesale.  The labor costs for picking them was barely covered.  They had us over a barrel and they took advantage of the situation.  The sad thing is that the guy who owns it used to be a farm manager at TMF.     I want to add some changes here.  First I was mistaken about Moceri.  I did not know the full situation.  Moceri is a family owned company that has been in business for generations.  They did not threaten collections.  One of their buyers, who used to be the farm manager at TMF, was the one who threatened collections.  Legally he could not do that - only the owners can.  So this just adds to the character of this man or more aptly detracts from it.  Second, wholesale has its place.  I still feel that wholesale is the death of a small farm if that is its only means of income.  It is dangerous to generalize situations.  Each business transaction for each product one produces should be scrutinized and generalizations should be avoided.  That said, I believe wholesale should be something that a small farm does after it has created retail markets for itself and perfected the quality of their product.  This way it is just another diversified income stream.

I feel myself getting more angry at the second.  So forgive me if I lose objectivity here.

12.  Dysfunctional Board - I've seen less people at a $1 black jack table in Vegas then on our board.  That was till lately.  Then the board consisted of two people.  One who was too vocal and the other non-existent.  We tried to get new members onto the board that could help us with building relationships, fundraising, marketing, and straight up business savvy.  But the existing board was like the worm in the apple.  Rotting the fruit from the inside.  No one wanted to be a part of that and I don't blame them.

13.  Rent - This is what it came down to.  We were so far behind in rent that our landlords finally said enough is enough and they weren't renewing our lease.  I can't blame them.  They put up with us for so long.  We didn't cultivate a good relationship with them.  Life is all about relationships, nurture them and you will succeed.

14.  Grant - I concede that I don't know much about it.  But here is what I do know.  It was a grant from the CDC to help fight childhood obesity.  From the grant grew the San Diego Growers.  The problem is that most places (like wholefoods) and institutions (like schools) require their sellers to have large insurance policy.  In the neighborhood of $5M.  Large distribution companies have these insurances and this is why they exist.  The small farmer can't really afford this.  So TMF acted as the umbrella for the SD Growers to become started.  This was all good.  UCSD administered the grant.  This means the CDC gave them the money and they then held onto it (and got and administration fee) and we got paid for all our grant work through them.  They made it a reimbursable grant - it didn't have to be, the CDC had no requirements for this.  So we had to spend the money, pay the bills from our operating income, then invoice UCSD to get paid back 3-4 weeks after we invoiced them.  You see how the problem compounds?

So the problems that TMF faced where many and they fed into one another.  Also there were a lot of cohorts in the eventual demise - it wasn't just the staff.  In fact we tried very hard.  We just made mistakes and the farm wasn't in a position to bounce back from them.  Running a business is a complex thing to do.  I am sure that I missed more lessons learned and I'm also sure that some of what I wrote people will disagree with.  That's fine.  That's good even.  The important thing is to look at the situation and learn from it.  Take what you will.  This experience has been invaluable to me.

I've tried not to be emotional about this post.  But I don't apologize for being angry.  A very wise woman told me it is ok to be mad at everyone involved.  Because it is those things that you care about that you are mad about.  Sit back and examine what they are and you'll see the things you value.  I'm very mad about Tierra Miguel closing.