Apr 29, 2011
Keeping track of data can lead to more profits

We all know that the fall season is growing and continues to attract larger crowds to our farms each and every year. According to my fall survey, many farms last year experienced huge increases in sales both in the United States and Canada, due to the near perfect weather conditions. An increasing number of these agritourism farms are open only five or six weeks a year for pumpkins, corn mazes and a huge variety of entertainment activities.

Yet, when I talk with these farms and consult with them one-on-one and look at their profit and loss statements, they all ask me the same two questions: What do I need to add to my offerings to get more revenue? How do we get our guests to spend more money with us per visit?

Because our agritourism industry has not done a good job of developing benchmark numbers we can share with each other, no one is really sure what to do or how they compare. Often, we don’t want to share these numbers with our nearby competitors. Even worse, some farms just plain don’t keep track of them. Without this information, you don’t really know how you are doing from one year to the next, and you don’t have this annual comparison to identify areas that need improvement.

I recently contacted about a dozen of my farm friends in the industry and asked them to share their 2010 revenue and key numbers with me. I selected farms that charge an overall entry admission versus a charge per activity, since these farms could tell us the exact number of people that entered their farm.

The farms chosen were from the United States and Canada, and had overall fall-season attendance from 16,000 to 188,000 in about a six-week period. Their average per-person admission prices ranged from $6.84 to $11 (taking into account ticket couponing and discounting).
Most of these farms also had significant nighttime offerings, including flashlight corn mazes, haunted hayrides, spooky hayrides, haunted woods, bonfires and more. In fact, several of the farms reported that their daytime versus evening attendance was about 50:50.

That’s an important number. For those of you who have not yet jumped onto the nighttime offerings, you may want to consider doing so, even if only for the weekends. If these farms are making half of their revenue at night and you already have the maze and other offerings in place, this may be a good place to increase your revenue with minimal investment.

It seems that both the family “scary” mazes and the adult “haunted” attractions are bringing record numbers of people to our farms. In fact, several of these farms are already experiencing over two hour waiting lines just to go through the haunted attraction.

Another popular revenue attraction offered by the farms is charging for a bonfire/campfire for private parties – this being done both in the day and in the night. In addition to paying an admission per person, groups also pay for the privilege of a place to gather and have fun that includes the bonfire, straw bale seating and roasting sticks. The bonfire sites on the farms surveyed ranged in price from $25 to $75, with a couple charging more on nights and weekends. Among the farms I talked with, the rental numbers ranged from 35 to more than 1,000 sites for the season.

On most farms I visit, food concessions is an underachieving revenue category, mainly because of the lack of food choice, use of concessionaires versus doing the food yourself and simply not enough places to be able to purchase food on the farm. If we want to increase the amount of money people spend on the farm, then food concessions typically offer your biggest opportunity.

The average food sold per person from my small survey ranged from $1.94 to $5.77. I have seen many farms with average food sales of less than $1 per person. My question to you is, would you rather buy a new attraction for fall or spend your money this season on building another one or two food stands? It’s certainly been proven by Vala’s Pumpkin Patch that the more food locations you have across your farm, the higher your average food sale per person.

There are several other key spending numbers you should be tracking:

  1. Average price spent per person on pumpkins
  2. Average price spent per person on fall decorations
  3. Average price spent per person on other non-food and non-fall merchandise sold in your markets

The sale of these products is dependent on large and prominent displays, merchandise choice and selection, as well as ease of shopping. From my small survey group, these numbers were so inconsistently reported that I can’t give you hard numbers. However, you should be tracking these categories from year to year to see how these sales can be improved.

Improving profitability

I asked the smaller group of farms for one more important number. What is your percentage of fall labor to sales? This number is calculated by taking your fall season labor expense (the days you are open) and dividing it by your gross sales. Interestingly enough, the labor percentage ranged from 8 percent to 25 percent.

While some farms may either include or exclude family wages in this number, this is still a very astounding difference. Obviously, by watching and controlling your labor expense you can make a huge difference to your bottom line. It’s a matter of watching both sides of the equation: on the one hand, you should think about how you can get your guests to spend more money per visit; at the same time, consider your labor expense category, which for most farms is the biggest expense.

The fall season has become an important time for most of us. I encourage you to make the best of these efforts by getting a handle on your benchmark numbers. This year, know where your revenue is coming from, identify your profit leaders and target your loss leaders. You can make a big difference from one week to the next.

Jane Eckert can be reached by phone at 314-862-6288, or contact her by email.


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