Small business is personal.

Here is the chart we mentioned, an analysis of BEA’s Z.1 accounts for an estimate of historic profitabilty vs. the cost of funds.

I couldn’t resist added a look at ROA on Minnesota farms for comparison. The raw data is from the FINPACK database, parsed and analyzed by Walker Insight. It’s somewhat surprising, to me at least, that the average farm shows lower cost of funds than BEA’s set. It may be methodological issues, but also might reflect various subsidized financing sources available to farmers. That average farms here also tends to show higher ROA is somewhat counter-intuitive. Farming is largley regarded as a “lifestyle business” and therefore afflicted by lower returns. I hypothesize that farms reporting to FINPACK do have strong contingent of high performing operations that affect the average. Our own immediate experience with professionally managed farms is they outperform both FINPACK and Z.1 means by wide margin.