There are two times when farmers should pay attention to their business’s financial management — when they have a gazillion dollars in the bank and when they have no money in the bank. In other words, all the time. I’ll start with a generalization and a caveat. First, the generalization — my observations over time […] Read more
Tag Archives Perspectives on Management — page 2
Pay attention to financial management — all the time
Defining critical issues helps farmers achieve a vision
We’re nicely into January. How are you making out with your New Year’s resolutions? I managed to escape the ritual this year. We had a bunch of family visiting and everyone got busy and we forgot to make our yearly declarations. On the plus side, that means I haven’t had to break my resolutions. Accountability […] Read more
Take time to know where current prosperity originated
Some farms have had a couple of tough years with weather not co-operating. For many, and for a second year in a row, average-type yields have been achieved with very little in the way of moisture. I think it is testament to advances in farmers’ abilities to grow a crop. But there are a different […] Read more
‘Theft of time’ can damage farm’s financial performance
I had an interesting discussion a couple of weeks ago with someone who works in a large not-for-profit organization. The management team in the organization had just finished working through a planning session. Part of the focus of the session was on roles, responsibilities, work plans and desired outcomes. It was pretty typical: who has […] Read more
It’s important to get on top of financial difficulties early
When you’re a farmer, it doesn’t take long to slip into financial difficulty. Management decisions in the 1980s, 1990s and into the early 2000s — especially around debt — helped contribute to degrees of financial hardship. The problems were often compounded by factors outside a farmer’s control, including low commodity prices, high interest rates and […] Read more
Leadership role increasingly important on today’s farms
There are aspects of managing farms today that didn’t appear on the radar screen in years past. One such aspect is human resource management. It wasn’t that long ago when the broader function of managing human resources on a farm did not warrant a lot of attention. This has changed. Even for more modest operations, […] Read more
Timing of focus on farm business management evolving
The landscape of farm business management continues to evolve and I think for the right reasons. Years past, it was extremely rare to have a July meeting with families about managing their businesses. There was a pattern of the work we did with farm families: November to mid-April — It was a busy time with […] Read more
Be aware of transition within transition for succession
When people talk about succession planning, they’re really talking about transitioning the ownership and management of the farm to the next generation. The transition of ownership will be to the next generation who will be actively farming and often, to siblings (or cousins) who aren’t … who own assets or shares but who won’t be […] Read more
Financial efficiency in multiple entity farm structures
The article I submitted last month discussed financial efficiency, which is defined as the ability of a farm business to use its resources (inputs) efficiently. There are three groupings of financial efficiency, in which expenses are categorized to yield margins and ratios: production expenses (fertilizer, chemical, seed, crop insurance, feed, veterinarian) operating expenses (fuel, repairs […] Read more
Measuring financial performance starts with budgeting
Analyzing and managing financial performance can be both simple and complex, depending on what you’re trying to understand about it. In it’s most simple terms, financial performance can be defined as sustained positive cash flow. Positive cash flow comes from the profit being generated by the farm business, and that’s where the complexity comes in. […] Read more
