Have you ever heard the saying, “hope is not a plan.” This is a great saying that is very applicable in agriculture. It is very critical to ensure that you are creating the proper roadmap. This should include projections on production, prices and yields. This also includes plans for capital expenditures in the coming year. From all of this you can determine the size of operating loan required to run the business properly.
If you are creating an accurate road map you can talk to the bank with a stronger knowledge of your farm business. From the road map you have a better idea of how you need to market your crop production in the coming season. Marketing crop by margin instead of by the “best price” will ensure execution of the farm business plan. Making financial decisions with knowledge will allow you to make better input purchasing and crop marketing decisions which means more profit for your farm.
The road map not only includes financials but also involving everyone in the family farm business. YOu need to make sure that the family unit has input and agrees with the plan for the coming season.
See more episodes of the Farm Business E-Team Episodes.
Creating the road map or plan for the coming year creates a sense of being proactive which is always better than reactive. Watch the video below to get your farm business plan on track.
Please check out episode 2 – Road Map – Planning for the Year Ahead
If you cannot see the embedded video below, click here.