A year after opening his own precision business, an Iowa dealer offers advice on how to survive and thrive as a one-man company.
Starting a precision farming business from scratch requires confidence, ingenuity and a willingness to work to the point of exhaustion. Just ask Pete Youngblut, who a year ago formed Youngblut Ag in Dysart, Iowa, after spending several years working with a precision manufacturer and a short time as a precision specialist at a local dealership.
At the time, Youngblut wanted to take advantage of farmers’ growing appetite for technology and try to establish himself as a sole precision proprietor. By all accounts, he’s succeeding in his endeavor, growing his customer base from a handful of local farmers to more than 75 and counting.
Photo courtesy of Pete Youngblut
“My number one goal was to establish a strong customer base my first year, so I could get to the point where I’d always have someone calling,” Youngblut says. “Since I’m pretty much a one-man show, I needed to structure my business plan around being able to sell and service everything I carry.”
While he’s been able to turn a sales profit, thanks in part to virtually non-existent overhead costs, Youngblut admits it hasn’t been easy. He sells seven different brands of precision technology, which requires broad knowledge to adapt and install components of each system.
One of the lessons he’s learned is to make sure he knows exactly what equipment customers have on their farm, before making a service call.
“The things that have hurt me the most are when I’d get out to the field and be surprised,” Youngblut says. “It’s worth it to make that extra trip to a customer’s farm in advance and make sure I’ve got all the details on their machine and do my homework.”
Although a couple of friends occasionally lend a hand with paperwork or equipment installations and sales, Youngblut is singularly responsible for keeping cash flowing through the business.
This mandates 24/7 availability for customers, even if they aren’t always the ones asking for help.
“I’ve had times where the customer takes the day off, but I’m making them work,” Youngblut says. “About 98% of my customer visits are done out of the back of my Chevy pick-up, and I know I’ve got to keep pushing whether it’s late at night or a Sunday afternoon, because farmers have plenty of other options when it comes to where they get their precision equipment.”
So what advice does Youngblut have for others thinking of starting their own precision farming business?
“Number one is don’t give things away,” he says. “Getting started, one of the challenges I faced was that bigger dealers would offer customers a deal on hardware to get their business. Sell yourself and the sales will follow, because I find that customers will keep coming back for excellent service.”
Youngblut also recommends using a comprehensive accounting software program to manage inventory, track sales and set profit goals.
“Understand your margins and know what they are for each product you sell,” he says. “Keep accurate books and set sales goals to be comfortable and if you fall short, know where you have to be to get by.”
Finally, Youngblut advises new entrepreneurs not to overlook potential expenses, which can take a bite out of the bottom line.
“Account for taxes, especially, and be sure to plan ahead,” he says. “Don’t set yourself up for failure in the second year, because you didn’t account for expenses during the first.”