Farm Business Planning

Posted on April 17, 2012. Filed under: Chuck Rabitz |

Farm business planning may not be something high on everyone’s priority list, but all family owned businesses must seriously think about planning and writing things down.

As we design a farm management structure we also must think about positioning or transitioning the business for the future.  There is a difference between letting something happen and making informed decisions.

Form a Business Plan

The first step of any successful farm is a business plan; this includes mission statements and core values of the operation. Detailed planning will include dividing responsibilities, setting policies, and communicating. There also must be some type of system in place to measure performance. Remember, for this to work everything needs to be written down.

Set Goals

Goals of the farm operation should include all aspects of the business including personal goals.  Owners and employees should all have written job descriptions. Farming today is even more complicated and it is a really good idea to spell things out, things like compensation packages. Many farms today have many partners and even investors. All parties involved must have similar goals in mind.

Farms today are small businesses and we don’t necessarily think things like Standard Operating Procedures (SOP’s) apply but they do.  For example written safety protocols for the farm are now inspected by OSHA.

Like any business, working capital, debt to asset ratios and cost of production are important with good record keeping.

Working in a family business can be very rewarding, but there could be consequences when we don’t do things well. There are many professionals out there to help you, including your banker.

Plan …..To ensure success.

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