Often one of the most unpleasant tasks of farming is planning, but farm planning may be the single most important tool at a farmer’s disposal. Careful planning can minimize costly mistakes, eliminate redundancies and create a clear path of profitable action.
As Tamara Benjamin, a program leader at Purdue University points out one effective method of planning is to view your farm as a series of interrelated parts. Since each of these parts consist of strengths and weaknesses, she suggest writing down each element. Two segments she suggests are:
- Biophysical factors: This includes the physical makeup of the land – soil type, soil issues (erosion, flooding, etc.) and any problems with disease.
- Economic factors: Know which crops or products generate the best cash flow, but also look at market conditions, available capital and product yields.
But, what if planning and creating a business plan is not a strong skill possessed by the farm owner?
Another farming expert suggests taking a three-step approach to business planning and the first step is to reach out to others impacted by the success (or failure) of your farm. Karisha Devlin, a University of Missouri Extension agriculture business specialist in Knox County, Missouri believes you should reach out to
Those people who are in the trenches daily from a financial standpoint—all of them should be included in the planning.
After this, Devlin explains, create a successful business plan by:
- Gathering all the right information – like product information, payroll costs, financial records, yield data, etc.
- Finding someone with business planning expertise to map out the best path for financial growth.
This approach includes the farmer in the planning process, but turns over the business plan creation to an expert. The farmer then follows the plan’s steps on a daily basis. This allows the owner to capitalize on their strengths while minimizing their weaknesses since they are leveraging the strengths of an expert.
If you have questions, comments, or additional ideas about farm planning, contact us today. We’d love to hear from you.
