Why I need an income...

Discussion in 'General chat' started by Grahame, Nov 17, 2011.

  1. Grahame

    Grahame Senior Member

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    There are a lot of costs that come with 'working' a piece of land, and these seem to increase distressingly when you start making even a few dollars from it...

    General costs

    Council rates
    Water rates (if you have an irrigation allocation)
    Home and contents insurance
    Any other insurances you choose (health, life whatever).
    Other things I can't think of right now but always seem to appear...

    Can you really afford not to have these.

    Then there is the jump in the cost of insuring your house and contents just because you decide to make money from you property. In our case it will cost us over 3 times as much. If you try to sell at farmers markets you also have travel, site and other costs that begin to make selling your surplus unviable.

    Even if you decided to sell it at your gate, in order to remain insured then the price goes up.

    So can a Community Supported Agriculture system bypass any of these costs or are you then still running the gauntlet?

    I was thinking we may actually be able to support ourselves with a little bit of extra income from selling the surplus, but in actual fact it could possibly end up costing us more! Unless we up-scale and become more aggressive about selling our wares.

    Does any of these seem wrong to you guys?

    So instead I may have to go out looking for more gardening clients and concentrate on that or I guess I could always go on the dole!!

    If we make the decision to abort the garlic sales, there may be a shit load of free garlic available pretty soon.

    Keep your eyes peeled!
     
  2. mischief

    mischief Senior Member

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    Yeah, why would your insurance go up just because you are getting your land to support you?
    There must be a point where you are making more than you have to spend to make it,,,surely.
    Have you thought of selling your garlic on the Aussie equivelant to ebay.
    There seems to be alot of people selling plants etc on the kiwi trademe site.
    I buy from there.

    Otherwise its getting the marketing right to attract clientele in the restaurant and hotel industry.
     
  3. annette

    annette Junior Member

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    Why would you need insurance if you sell at the gate? Household insurance would cover anyone hurt on your property.

    Grahame there must be a local group you can tag onto to promote local food. We have quite a few here in SEQ that provide boxes of organic grown food. It would mean just dropping off your garlic at a central point. Australian grown garlic is in big demand.

    Valuing adding must be an option also.
     
  4. pebble

    pebble Junior Member

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    Do you really need life insurance? (not sure about health, don't you have a public health system too?).

    I agree with the selling online thing. Also, share a stall with someone else at the Farmer Market, then there is less travelling and time investment.

    Are you selling to cafes and restaurants? Over here they crying out for naturally-raised, local produce.

    I'm interested in the insurance issues too, I didn't understand what you meant.
     
  5. Grahame

    Grahame Senior Member

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    You are right in many respects mischief but...

    Yes, there is a point where we would actually start 'making' money. But the insurance increase amounts to a lot of garlic to sell. If we were to do it at farmers markets that would be the equivalent of about 10 average markets around here - not ideal.

    We have a few shops in the area ready to sell our stuff too, but that profit gap really does start to squeeze the viability of it all.

    Sure we could travel to the major centres for the bigger markets, but that starts to defeat the whole purpose of this thing - we are all about local produce.

    The idea was to do the farmers market thing until we start to get more and more people buying it 'at the gate'.

    You don't get a lot of restaurants around these parts that care for high quality produce. I mean of course there are some, but nowhere near the amount we would need.

    In the global scheme of things the money may seem pretty insignificant, but for us this really is a game changer. It's unsustainable to operate at a loss (we have nothing to lose :D ) for a few years before we build up a customer base. It may be that in this area we could only sell the equivalent of the insurance premium anyway! A few thousand dollars is very significant in that respect.

    It's a dilemma.
     
  6. Grahame

    Grahame Senior Member

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    Hey Pebble,

    The health and life insurance is not really relevant.

    The point is if I don't make a profit from my land is costs me $x to insure my house and contents. If I start to generate an income form my land i have to pay about $3x to insure my house and contents. Don't ask me how they work it out but there it is. Then if I want to sell at specific farmers markets I have to get product liability insurance which is a further $.5x. Even if I don't sell at markets this may be something I would be wise to get.

    So before I even sell one thing, I already have to sell a few thousand dollars worth of stuff before I am any better off (regardless of where I sell it). And there was always the possibility that I was only ever going to sell a few thousand dollars worth of stuff.

    Clear as mud?
     
  7. permasculptor

    permasculptor Junior Member

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    Can I buy some uninsured garlic from you G
     
  8. pebble

    pebble Junior Member

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    There is a lot of 'have to's in that post Grahame. In my experience there are often ways around that. But I don't live where you do.

    I understand the difficulties you are describing though. Do you feel there is room for creative solutions, or is it more that you need to get things off your chest?
     
  9. Grahame

    Grahame Senior Member

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    Yeah, could be a get-things-off-my-chest thing pebble. ;) Also, I thought i'd bring the whole farm vs domestic insurance thing to peoples attention. It'd be crap to sell some eggs and find out you have no coverage when you place burns down - you know how slippery insurance companies can be at the best of times.

    I was hoping things would be easier :D I might have to grit my teeth and get creative.

    I'll set up some internet sales and see how we go - it seems a shame not to support local farmers markets though...

    Thanks for listening folks!

    Let me know how many tonnes what you want Permasculptur :)
     
  10. FREE Permaculture

    FREE Permaculture Junior Member

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    it really does sound like your looking for an excuse to pull out, maybe it was your idea, you have realised that to make a business out of selling garlic alone you have to sell a tonne of it and to do so will require more work, more travel ect ect.

    but whavever it is, the insurance thing is a bit of a cop out, you make it sound like it's too hard but really it's not.
    firstly i think many people make the mistake of trying to be a business, focusing on the business name, the sign on the property and trying to go all official before they have ever sold a clove, it's like a fantasy in a way, and like most fantasies, once a reality all of a sudden doesn't seem like the glorious idea it was when it was just a fantasy.

    eBay has been mentioned, why try and drag people to your gate for a measly bunch of garlic when you have the whole world at your finger tips online?
    up until just this year, you could do just about anything you liked on ebay if your just a private seller, now the ato has an automated system in place with ebay so if you turn over $10,000+ in a year you will need to lodge a tax return, but under 10k is still considered private selling.

    but yeah I would not even consider extra insurance for something as basic as that, your just a bum, be a bum.
     
  11. eco4560

    eco4560 New Member

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    Put me down for a Kg or two as well...
     
  12. Grahame

    Grahame Senior Member

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    Yeah, I'm a bum it's true!

    We have been selling the garlic and a few other things and did reasonably well at farmers markets last year (on a smaller scale). To sell more though we decided to do more markets this year. I suppose we could bluff our way through it again. That is the very point of it we don't want to be a big business, we just want to sell some stuff, to pay for council rates and a pair of new undies every christmas.

    I don't think you are understanding the point that the insurance companies will not insure us as a domestic house and contents client if we make any money from our land. And farm insurance is over 3 times as much as domestic for no extra benefits. We can take the risk and sell stuff anyway but that would make the policy void should they find out.

    What do you think - take the risk?

    Perhaps you are right and I am just looking for a way to keep being a bum.
     
  13. macousin

    macousin Junior Member

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    Having got some understanding of how insurance work, I wouldn't risk it. They are very "thorough" in case of claims.

    But I must say the logic of 3x for having productive land, I don't get it. I imagine you have shopped around.
     
  14. milifestyle

    milifestyle New Member

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    The problem with insurance is they always find loopholes not to pay you... If you get insurance to sell garlic but you also sell the occasional onion, they will declare a case for non-payment...
     
  15. milifestyle

    milifestyle New Member

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    I don't know whether we need to look at the problems with insurance or the monetary system as a whole... its time we changed the way we look at economics...

    ... I have never seen anything else that is as fake as money take more of a priority than life itself...
     
  16. aroideana

    aroideana Junior Member

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    Just visited a mate who fell off a roof and nearly broke his back . HE IS OK but not allowed to drive and relying on help from family to feed his cattle on family farm a few k's away . He told me he just paid insurance on 2 houses , at a cost of $7000 !!!
    Don't know how an old retired truckie came up with that , but he was forced to pay as some minor repairs still going on . Not as if he makes a fortune from cattle , they are there just to keep grass down .
     
  17. macousin

    macousin Junior Member

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    Hi Eric,

    I like the way you apply economics to your business: a nice balance between taking care of your patch of land and finding commercial outlets for your "workers", aka worms. What I find insightful in particular is that you have thought about which type of customers can get real value from your worms and how. Not only you provide a product but you also provide the education that goes with it. A packaged good: the physical item (the worms), the education, the undelying philosopy of life and the benefit statement. If you were only trading worms that would be like the "old economy" but because your business, person and product are aligned (I guess it's called integrity), this is like "new economy".

    Nothing wrong with money as long as it keeps flowing. When you stock it, it rots itself and the mind of the owner. Otherwise, money has been around for as long as humanity as existed and I can't really see how we are going to do without it. Even bartering requires an underlying measure of value whether it is eggs, pearls or dollars, You need some measure of value for fair exchange, otherwise, why don't you give me a cow and I give you a dozen eggs in exchange.

    Marc-Antoine
     
  18. eco4560

    eco4560 New Member

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    It's not just the monetary system that needs a going over - it's the legal system. We've become frightened of our own shadows. If you run a business you have to have insurance in case some one falls down and sues you. You need to pay for an electrician to come annually and tag all the electricals in case one is faulty, there's a fire and your insurance won't pay. And you need a fire policy and evacuation plans and regular staff training. You need to have an asbestos inspection and certificate in case someone gets asbestosis and sues you. You need a copy of each Award in a prominent place, and a policy on harassment and bullying that you educate your staff on each year - if you don't and someone complains - you'll be talking to the lawyers again. Then you need to have an education session about the Trade Practices Act so that staff aren't breaching that unknowingly and you get sued....

    In my (relatively short) lifetime the amount of 'red tape' has gone up astronomically. It's as though there is a competition on to see who can come up with the largest number of scary situations and then extract money from the gullible and vulnerable to offer an imaginary veil of protection. Imaginary - because when you go to make a claim they'll discover that you didn't fill out a form 17B-723 in triplicate and have it witnessed by a solicitor (at your own expense of course) - and therefore refuse your claim! And you can't just decide to make do without because in many professions it is a requirement of your professional registration that you pay large sums of money to be insured.
     
  19. annette

    annette Junior Member

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    Yep insurance companies have it all over us. I was thinking of buying a house that was not council approved. I rang the insurance company and asked if they would insure it for house and contents being not approved and all. They said sure they will and gave me a quote. Then I happened to say I was surprised they would insure and pay out on a house not approved. I was then advised I was never told they would pay out a claim on the property. So I said OK let me get this straight, you will insure the house and contents but you will never pay out on a claim? That's right. I asked then why would I pay for insurance? I was advised that it was not up to them to knock back an insurance payment. I kid you not.
     
  20. MelMel8318

    MelMel8318 Junior Member

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    What's wrong with a measly part time job to cover the gap? Any debt you can get rid of? I don't see anything wrong with choosing not to play the economic game. Here's to the BUM! :)
     

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