This week we sat down with Greg Johnson (Co-founder of Farm Owners Academy) to talk about why a basic understanding of your farm’s finances is a key component to your profitability, and how improving these skills will help you become more successful.
So, what IS the secret to a highly profitable farm?
Farm Owners Academy (FOA) believe that the secret to a highly profitable farm is directly linked to a sufficient level of financial literacy. Simple right?! Perhaps not! As Greg explained:
“Business owners need to clearly understand the big financial picture – and make decisions based on numbers and data, rather than just their current bank balance, in order to make profitable choices. Finance is the language of business, but unfortunately, most people don’t know how to speak that language!”
Since working with hundreds of farm owners throughout Australia, the team at FOA have found that the #1 problem holding us back is a lack of financial knowledge.
But Greg isn’t surprised by this…
“A lack of confidence with, and understanding of finance makes sense because it’s not something we’re taught in school and it’s not something we know intuitively”.
We often don’t seek to improve our knowledge of farm finances because training courses and programs can be unnecessarily complicated, filled with jargon, and not specific to the unique constraints of the farming industry, so many of us give up on improving these skills, putting it in the ‘too hard’ basket.
Why is improving farm financial literacy so important?
FOA have found that most farm owners make decisions based on what their current bank balance looks like. Yet Greg stresses that your cash balance is only one marker of financial health – and there are dozens more that should be considered – before making decisions that could easily wipe out the profits for the entire year.
Another situation FOA see all too often is our nation’s farmers giving up their own remuneration, time, and sometimes even sanity, for the sake of their farming business. Sound familiar?
We push ourselves and push ourselves and often don’t see anything change on the bottom line. So, we convince ourselves we are “in it for the lifestyle” …but can’t we be in it for the lifestyle AND the money?!
Well, FOA believe we deserve better than this for the work we all do day in, day out, year after year, so their mission is to give farm owners like us, the tools and knowledge to make more money without sacrificing our time or sanity, so we can build a strong farming business and legacy.
And that’s why they created the Farm Financial Framework.
What exactly is the Farm Financial Framework?
The Farm Financial Framework (FFF) is an online, 14-week, step-by-step training program delivered LIVE to help producers become more fluent in farm finance. The program includes a workbook to ensure you are implementing as you learn and also includes a benchmark of your farm’s finances too! Here’s an example of what your benchmark report will look like:
This program will help you make smart financial decisions that lead to more money, more security, and much less stress on the farm.
The LIVE fortnightly sessions cover the following:
- Introduction and the Farm Financial Benchmark
- Module 1: The Basic Financial Framework
- Module 2: Financial Decisions (Long-Term)
- Module 3: Financial Decisions (Medium-Term)
- Module 4: Financial Decisions (Short-Term)
- Module 5: Identifying and Managing Risk
- The Game-Changer: Farm Financial Benchmark Debriefs
You can read all about the program and access further information about the course content here or listen to this recently released podcast (Whilst you’re there, be sure to listen to past Profitable Farmer episodes as it’s seriously good listening!)
Who is the FFF for?
If the situation we explained above sounds a bit like you, or if any of the following sentiments ring a bell, then this program is what you need:
- You’re a complete newbie to the world of finance.
- You’re tired of meetings with your accountant where you don’t understand the jargon they’re using. You want to be able to have informed conversations with your advisors and be a strong leader of your business.
- You see a profit on the bottom of your tax P&L statement, but when you look at your bank account, there’s nothing in there.
- You want to know where that profit actually is… and how to get more money in the bank.
- You’re no stranger to hard work, but you want to know all your efforts are leading you to the right end goal.
Greg explained that FOA designed this introductory finance program for complete novices, which means there’s no financial jargon and you don’t need any prior experience.
When and where does the program run?
Online! The whole course is entirely internet based (very Coronavirus friendly!) so there is need go anywhere as you can complete this program in the comfort of your own home.
The FFF program starts on Friday 3rd July and finishes on Friday 25th September 2020. Each live session starts at 12pm (SA time) for 60-90 minutes and takes place once a fortnight (live sessions are recorded so you can watch the replay if you miss one).
The entire 14-week course will require an investment of approximately 30 hours of your time.
How will improving my financial literacy help my farming business?
Greg told us the most important outcome of FFF is that you’ll no longer be flying blind in terms of finance. The ability to make informed choices based on data, logic, and profitability “will change everything”.
And more specifically, he explained that you will be able to:
- increase revenue by focusing on the highest profit-drivers
- cut costs by spotting and removing hidden money-suckers
- work less because you’ll have enough surplus to hire help
- make more of the good years… so you can stay viable through challenging seasons
- significantly reduce the impact of losses in the bad years on the long-term viability of your business
- know your financial position more deeply than ever before and have the skills to truly take control of your business.
What are other producers saying about FFF?
My husband and I are currently completing FOA’s Take Control Program (which we love) but we haven’t completed the Farm Financial Framework yet, so we looked to see what other producers are saying about it and the feedback is overwhelmingly positive:
“We found the FFF training really informative. The way Greg explains the content was very easy to comprehend. We thought one of the best features was Greg’s targets for the KPI’s and how those ratio’s led to different outcomes for the business. The examination of the caller’s figures can be analysing participants actual reports was also great because they are real examples and had common faults that we could all relate to. Inspired by the training we are just getting organised to submit our financials for the Farm Financial Benchmark.” – Andrew Turner
“The Farm Financial Framework was a great program to go through. Financial planning and understanding is often put on the back burner – this program highlights why the understanding of our finances and where money is allocated is so necessary to run a successful business. I found it easy to follow and engaging. It has made me change a few things in the office as well as ask more questions. We pay a great deal of attention to how our money is generated and allocated and take pride in doing it positively.” – Christine Berry
How much does the program cost?
Greg explained to us that the program has over $5,000 worth of value:
- 7 x online sessions to master introductory finance, delivered to you live over 14-weeks, with accompanying workbook ($1,000 value)
- Personalised financial benchmark to assess the health of your farming enterprise ($1,500 value)
- Live feedback from the FOA team to debrief the results and learn strategies to improve ($500 value)
- BONUS: Two tickets to our sell-out TOP Producers Program 2-Day Workshop ($2,000 value)
But, FOA are offering the program for $1,000 (+GST) per business. I asked him why they are providing the discount and he said it was their way to help support farm businesses in the current climate.
To ensure all participants get the best experience, FOA are also limiting the availability of this program to 150 businesses only. Spaces will be allocated on a ‘first in, best dressed’ basis – so I encourage you to register if you think this may be exactly what you need. They have a 14-day money back guarantee and also a payment plan available for peace of mind.
Want to learn more about Farm Owners Academy?
Greg Johnson and Andrew Roberts created the Farm Owners Academy in 2015 to simplify the complexity of running a farming business. Their methods have been tried and tested in Australian Farming Businesses for over 35 years and are proven to help you experience more profit, more control, and more freedom.
FOA is recognised for its excellence and commitment to helping business owners and their teams succeed. FOA has a variety of resources including educational programs, online webinars, regular live events, plus blogs and fortnightly podcasts. In essence, they have a suite of differing learning tools (both online and in person) that include everything you need to unlock the full potential of your business, and create something that makes you both proud and profitable and gives you the freedom you deserve.
- Access their website here.
- Find their podcast in our Podcast Library here.
- Access their courses in our Course Library [hyperlink]
- Watch their video below!
Free Cheat Sheet
If you’re not quite ready to sign up for the Farm Financial Framework or if your farm financial skills are more progressed, FOA have put together an informative ‘cheat sheet’ that clearly outlines and explains 10 targets to help drive more profit on your farm. For each target, you’ll learn:
- What the target means
- How to calculate yours
- Why it matters (how the figure affects your farm)
- The benchmark you want to aim for
- How to improve your target score, if you’re falling short
We recommend downloading this free cheat sheet which can be found here.
In summary, this online program that begins in July is an entry level farm financial program that will help you become more confident with farm business decision making. It includes a whole host of other benefits, including a benchmarking assessment of your farm and tickets to their hugely popular ‘TOP Producers Program 2-Day Workshop’, and costs $1,000 (+GST) per business. The course intake is limited to 150 businesses and you can learn more and register here.
UPDATE: FOA have already sold 31 spaces already, so only 119 remaining at this stage.