By: Amanda Richmond, Farm Business Management Specialist, Kindersley
Did you know that management plays an important role in financial success? A study was conducted by Ipsos, a global independent market research company, to determine the degree to which farm business management practices are direct drivers of farm financial success.
The results of the study show a direct relationship between management activities and farm financial success. There are seven key management activities that have a direct impact on financial success.
- Continuous learning: Actively seek new information and opportunities for learning and skills development.
- Make Business Decisions with Accurate Financial Information: Keep financial information up to date, accessible and used for timely decision making.
- Engage the Use of Professional Business Advisors: Use a trusted farm business advisor or team of advisors to review the business on a regular basis and ensure activities are meeting strategic objectives.
- Use of Formal Business Plan: Use, review, and update a written business plan throughout the year when making business decisions.
- Cost of Production Monitoring: Calculate, review and monitor cost of production for every production cycle and use for benchmarking and management decisions.
- Risk Assessment and Management: Actively look for emerging risks and use risk management programs and tools to manage risk.
- Use of Financial Plan with Budget Objectives: Use a budget including revenues and expenses for each product, department or area of the farm business.
These management activities are not exclusive in generating profit for the farm business, but will have the most impact on financial success. Incorporating these management activities into your daily routine can help improve your bottom line.
The full report, Dollars and Sense, can be downloaded from the Farm Management Canada website.
For more information stop by or contact your local Regional Office or contact the Agriculture Knowledge Centre at 1-866-457-2377.