Driving any vehicle with confidence toward your goal or destination needs a strong focus on the road ahead, while keeping one eye on what’s behind in your rear-view mirror and another on what your gauges tell you about how well your vehicle is travelling.
Is your farm business any different? How well are you planning for the coming season’s journey?
In a chat recently with an industry leader who has developed a paddock planning app for farmers, I was surprised to hear that only about 15% of farmers who use these types of apps actually follow through at the end of the season to assess what really happened in each paddock.
It got me thinking… Are we only using half of our management ability? And is this important to help clarify where our business is heading?
So, what can be assessed at the end of each season to make a difference for future planning?
Actual Results from Paddock Plans
Good: Plans for rotations and associated paddock planning put in place at the beginning of a season are needed for ordering of seed, chemical and fertiliser for the season ahead. But this information is rarely used again!
Better: A more powerful use of this information would be recording actual use at the end of the season to clarify what inputs are really driving the farming business.
Actual Cash Flow
Good: Monthly cash flow projections are a critical part of planning for your coming season so that the planned seed, fertiliser, chemicals and other inputs needed can be paid on time. Banks need this planned monthly cash flow to be informed when they need to have money available for their farming clients.
Better: A more powerful use of your cash flow is to record how ‘actual’ is going against ‘planned’, so cash can be better managed.
Actual Gross Margins
Good: Estimated gross margins help fine tune the best mix of enterprises for your farm business, given financial performance expectations of yield and prices. Sound management is about combining good agronomic practices with good financial management, so management can focus on those enterprises that give the business the best return.
Better: At the end of the season, develop gross margins using your actual results to clarify what enterprises really are providing the best financial performance throughout the season.
Actual Profit and Loss Report
Good: To be a top farm manager, all this information can be combined to help project the year’s business profits and efficiency measures, so that managers can know they are on track to achieve the business goals of improved prosperity and business wealth.
Better: Again, these projections need to be measured against the actuals at the end of the season, so these goals and achievements can be tracked.
Don’t let your farm business journey get off-track! Recording your end-of-season results will help your business planning remain focused on where you actually want to end up!