Fear of the Unknown – The ceilings we hit as primary producers

“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure” – Marianne Williamson.

The only obstacle I have as a farmer is “fear of the unknown”. This was the answer from one of the primary producers during our last Farmer Coach session. Not weather, not markets, not policy, fear. The fact that, as individuals, we don’t know what we don’t know. I was taken aback, as this was a self-awareness that most entrepreneurs don’t have. The ability to remove themselves from working “in” the business and identify that the largest holdback in their success was themselves. It still gives me chills as I type this.

As humans, a natural reaction to life is fear. I had it when I moved away from home to go to school, I had it when we had our first child, and I had it when I left a safe career in public practice to become an entrepreneur. The difference between success and failure is how you conceptualize that fear and how you find solutions to move forward.

Paralysis of Analysis

One of the first solutions for fear is information. I have used the following graph numerous times in discussions around decision-making on the farm.

It identifies the life cycle of a decision on a family farm better than any other depiction I have found. It also identifies the area that most entrepreneurs struggle and fail with – the Valley of Despair. Some call it paralysis of analysis, and this is where most primary producers let fear hinder their future success or opportunity. For example, a land purchase would look like the following:

Uninformed Optimism – A land parcel comes up across from your home yard. We should buy it because I can see it from my kitchen window, it fits into all our other land parcels, it is great dirt, and so on.
Informed Pessimism – The price is well above the market, and I am not sure that I can ever make a dollar from it; plus, I would then have to stretch my machinery and possibly hire more people to help, and so on.
Valley of Despair – You lose sleep, you talk to yourself, or if bad, you might even argue with yourself. Your spouse starts to worry about your well-being, you have run and rerun the numbers a dozen times, and so on. This is where 90% of deals die because of fear of the unknown.
Informed Optimism – You take the numbers to the bank, and they find ways to use interest only or longer amortisation, so you don’t stretch too thin. Your accountant finds that it lowers your current equipment line, and you can stretch and make it work without further investment. You buy the quarter using information and data.

Worst Case

Fear is based on the premise that you have no way out. As entrepreneurs and primary producers, the farm is a business, not a life. Once you can tackle that hurdle, the fear tends to subside, and reason and understanding become the primary drivers. This is moving from a position of weakness to a position of strength.

Too often, I have clients who don’t think about “plan B”. “If I buy that quarter or piece of equipment and can’t afford it, I may lose everything” changes very quickly to “I can always turn around and sell it later, most likely for a gain or breakeven”. Farming as a lifestyle identifies an emotional attachment to assets such as land. Farming, as a business, identifies that these assets are merely for return on investment and can be liquidated in a downturn.

I also find this with insurance. It may be expensive, and it may be a piece of paper, but first off it allows you to sleep at night. For some, the idea of loss can hinder decision-making. We are quick to spend millions of dollars on a piece of equipment or a new chemical, but we baulk at a risk mitigation tool that could save you considerably more loss than either of the other two assets. Sometimes, peace of mind is the largest advantage we have over fear.

In the end, every farmer I talk to is unique. They all have the same problems, but they all have different ways of facing them and finding solutions around the fear of the unknown. For some, this is complacency and risk adversity; for others, they hit the gas and drive face-first into the problem. One is not advantageous over the other; it is just different.

Ceilings were meant to be broken, nobody ever said whether you had to use a pencil or a sledge.