Get Farm Financially Fit - First Steps
|No matter what the level or ambition of a farmer to keep their farm and household resilient to the constantly changing world and to be ready for the future, a farmer needs to follow four steps in farm financial management :|
The first step on the ladder is the “thinking process” behind what you are intending to do. It involves asking yourself a series of questions on where you are going, how you will get there and what extra profit or benefits your plan is expected to generate.
Thinking about where I am at present
Many of these ideas are already in your head but writing them down will help clarify them for you. It will help in assessing your situation and identify what to do next.
Identify your costs, revenues and risks
If you are not doing this, then thinking about these issues will help you to plan better. However writing them down and working with your advisor can help to make better choices.
Thinking about what I have to do
Think about your skills set and skill needs
The next step is the “financial process” where all your financial details are analysed for your farm and family circumstances to examine if your proposed farm plan is actually viable.
Identify costs, revenues and risks
Following completion of the farm plan, you and your adviser can then prepare a financial plan (annual cash flow, Profit and Loss and Balance Sheet) to fully examine the financial viability of your proposals.