All this week on Table Talk, we will be looking at the topic of Farm Business Planning.
Snore you think? Absolutely not! Let us convince you why.
Too hard? Absolutely not! Let us help you.
Why is planning important?
Farmers with a written business plan average a return on assets five times higher than those without Source: Rob Hannam, Synthesis Agri-network and PledgeToPlan.com
Managing agricultural businesses is complex and good planning is now more important than ever. Farming is more and more capital intensive, margins are narrowing, markets are changing and technology is rapidly changing. As a result, on farm business planning is vital to give us all the greatest chance of success. One planning technique is a formal business plan.
The GRDC provide 5 reasons why you need a business plan and we think they are spot on:
- To get plans out of your head, down on paper and shared with others in your business.
- To learn more about why you do what you do and determine what you want to achieve.
- To unearth unexpected opportunities and anticipate problems.
- As a key resource to monitor progress and brief banks and other external advisers
- To be proactive rather than reactive
Planning doesn’t replace day to day operational work in the paddock but it can bring clarity and direction, help to take advantage of new opportunities and assist in avoiding risks.
It may seem like a time-consuming job that will take time away from the “real” work, but investing a little bit of time upfront may come with huge benefits. It provides the chance to frame the future of your farm and your business. Why not just try?
What is a Business Plan?
A formal business plan brings together written goals with marketing, production targets, financial targets, and human resources requirements into a management strategy.
How can I use a Business Plan?
If you invest the time in developing a Business Plan, it is a fluid document that can have a multitude of uses.
- As an operating and asset transfer guide during succession.
- Support requests for financing to bankers, investors or government agencies.
- Evaluation guide for new investment or new enterprise direction.
- Information, all in one place, at your fingertips, about your business. No more scrummaging around for information when you need it most.
“It’s going to be a lot of work,” groaned Stewart. “Yes”, agreed Judy, “But we already have a lot of information in our heads, and doing this together, by the time we’re through, we’ll know exactly what we’re getting into and that means fewer unpleasant surprises once we get going.”
Right,” said Stewart, “Let’s do it!”
“But not tonight,” yawned Judy, “Let’s start tomorrow.”
Stayed tuned tomorrow for some tips and tricks to help you get started!