Do you have a business plan?
I am sure many of you have an idea of how your business is tracking and where you want to be, but have you got it written down? Have you set goals to help you achieve your goals?
There are so many opportunities right now for farmers to work with experts to develop their own business plan, often through a subsidised program, that is written down and provides you with context and direction.
I had no idea what a business plan was, nor how important and useful they are before we had the opportunity to develop one with a consultant as part of a drought recovery program.
Some of you may be asking what is a business plan? From my perspective, a business plan is a document that identifies the short- and long-term goals you have for the business are so that you can start taking steps to achieve them.
Traditionally, farmers don’t become farmers to be businesspeople, and I certainly know that many farmers would prefer to just live out their childhood dreams of playing with sheep or driving the tractor without the boring administration that comes with farming! But it is now expected that farmers have enhanced skills and knowledge to manage their (often multi-million dollar) enterprises, and have strategies to manage risks associated with farming such as adverse weather events and commodity price shocks.
Business planning gives you the opportunity to learn more about the intricacies about your business beyond what happens in the paddock and enhances your business acumen and financial literacy.
The process of developing that plan will vary as it often depends on the expertise of the consultant or advisor you are working with, or the outcomes of the funded program that you are participating in. However, the core of the process is a review of your financial performance, your business management including your business structure, and your enterprise performance based on the rainfall and landscape.
Many business planning processes are also now considering factors that were once considered to sit outside of the business such as personal resilience – and rightly so! Ensuring that you are as fit as a fiddle, do things that you find enjoyable, have a community you feel part of, and remain happy (and married!) are things that help you to contribute to your business and live a happy life.
Many programs that have run to date have offered an incentive for farmers once they have completed a business plan – whether it be access to additional support or funding for projects. While it is always nice to have access to funding to buy shiny things (and we certainly have bought the shiny things), this approach has resulted in an expectation across our industry that there needs to be a “carrot” for producers to participate in these programs.
Don’t get me wrong, I was definitely in this camp – it raises the “what is in it for me?” question. These incentivised programs have also resulted in people attending the business planning sessions because they had to in order to access the incentive, rather than because they wanted to understand their business better. I have no doubt that some people who have gone to these sessions because they had to have realised the value in attending, but I would put money on the fact that these business plans are now buried deep in a draw or in the bin.
But what I have come to realise is that the incentive for participating was actually that I get to work with a trained professional to review my business and come out the end with a roadmap that shows us where we want our business to be and steps on how to get there. The power understanding your business more should be enough of an incentive for farmers to get involved!
I encourage you all to go and sign up to one of these programs or engage an advisor to develop a business plan. And if you have already developed one, this is your reminder to pull it out the draw or the bin and review it!
It will help you to set you and your business up for success.