Profit & Loss Statements
A Foundational Guide for Small Farms
About This Guide
This guide is designed to build a foundational understanding of key financial concepts essential for managing a farm business, with specific guidance tailored to the needs of organic farms. It will guide you through foundational business terminology and demonstrate how to read a Profit and Loss statement (P&L).
It also provides tools and frameworks for effectively tracking income and expenses so you can better understand the financial health of your business, identify key costs, and make more informed decisions.
While it does not present a process for creating business projections, it can support your ability to determine how certain business decisions—such as transitioning to organic production—might affect your profitability. It does this by teaching you how to read and create a Profit and Loss statement and by helping you develop a better understanding of your historical costs. You can apply this knowledge and skill set to create informed financial projections for your business.
These resources were created in collaboration with Ellen Rawley Creative & Strategy, Inc, and with funding from CDFA’s Organic Transition Pilot Program and the United States Department of Agriculture (USDA) Transition to Organic Partnership Program (TOPP).
Who This Guide For
- Certified USDA Organic farmers
- Farmers transitioning to organic
- Fruit & Vegetables, Meat, Grains, Dairy and/or value-added farmers
- Land owners or leasers
- Farmers growing one or two crops or diversified operations
- Farmers selling through any and all market channels
What This Guide Includes
- Descriptions and examples of the most common financial terms you encounter as a farm business
- Recommendations for how to track farm income and expenses using a Profit and Loss Statement
- Tips for creating a system to track your income and expenses that you can stick to
- A workbook to help you practice tracking your income and expenses
- Six how-to videos that demonstrate how to use the workbook
- A list of other resources to level up your farm financial management
Download The Guide & Workbook
- Click here to download the GUIDE
- Click here to access the WORKBOOK
Watch The Workbook Tutorial Videos
Video #1: Getting Started with the Small Farm P&L Workbook
In this video, we’ll walk you through how to open, copy, and set up your Small Farm P&L Workbook. Click here to access the workbook and follow along.
Video #2: Tour of the Small Farm P&L Workbook
In this video, we’ll take a tour of all the tabs in the Small Farm P&L Workbook and explain what each one is for.
Video #3: Inputting Income in the Small Farm P&L Workbook
In this video, we’ll walk through how to record income in the Small Farm P&L Workbook.
Video #4: Inputting Expenses in the Small Farm P&L Workbook
In this video, we’ll walk through how to record expenses in the Small Farm P&L Workbook.
Video #5: Understanding Your P&L
In this video, we’ll take a look at the P&L tab in your Small Farm P&L Workbook and talk about how to read it to understand your farm’s financial performance and profitability.
Video #6: Keeping Your Workbook Accurate and Up to Date
In this video, we’ll take a look at the resources we’ve created to help you keep your P&L workbook accurate and up to date.
Questions?
Email farmerservices@caff.org for support using this resource.