By Rachel Kraynick, BSA, PAg, Regional Farm Business Management Specialist, Yorkton
Mark Twain once said that if the first thing you do each morning is eat a live frog, you can go through the day with the satisfaction of knowing that it is probably the worst thing that is going to happen to you all day long.
Your “frog” is the biggest, most important task you are most likely to procrastinate on if you don’t do something about it. Twain also said if you have to eat two frogs, eat the biggest, juiciest one first. In other words, if you have two important tasks to do, start with the bigger task first. And above all else, if you have to eat a live frog, it doesn’t pay to sit and look at it for a very long time. So don’t wait and don’t procrastinate. Just start!
These words of wisdom couldn’t be more accurate when it comes to your farm business management skills. What important things are you putting off that need your attention? Here are the top four “Frogs” I see in terms of farm business management:
If you are part of a multi-generational family, do you have a solid plan in place to transfer the farm to the next generation? Have you initiated the conversation with your family members as to when you want to retire? How can this transition plan occur in a financially viable way? Do you have a current will? What about contingency plans to enable continued farm management under unforeseen circumstances? Do you know how you will deal with the non-farming children? Do you know how to value sweat equity?
Even though these conversations can be tough or emotionally charged, they need to happen sooner than later. Finding the right tools and resources to help you address these issues are priceless.
When it comes to money, everyone’s priority is different. You may have good intentions to start paying down debt, to start saving for your retirement or to gain a solid understanding of your financial situation, yet you never do.
Having a financial management plan in place will not only mitigate financial disasters, but it can help to make purchasing decisions based on your financial situation and not on emotion or gut feeling. i.e.: Should you purchase more land because it is part of your business strategy and your operation can afford to? Or are you doing it because “you may not get this chance again” even though it sets you back more than you can afford? Realize that bigger may not be better, but better is better. Knowing your financial situation when making decisions will prevent you from biting off more than you can chew.
Do you and your farming partners have a clear vision of where you’re headed? Have you set some short and long term farm and family goals? Is this plan reviewed and updated regularly to guide you in every decision the farm makes? Since each individual has a different definition of what success means to them, you may set goals in reference to the size of the farm, profitability levels, or even work life balance issues. Having a solid business strategy plan helps you work smarter, not harder. It’s important not to confuse activity with accomplishment.
- Lack of strategy = Lack of direction
- Lack of direction = Business chaos
- Business chaos= A state of disorder due to poor management
Don’t let this be you. Have a written strategy plan and is reviewed regularly.
Hiring the right people for your farm can be priceless. Headlong into harvest and working long hours, with little sleep, it may become apparent that you should have hired some extra help. Or perhaps your operation is getting to a size that you can’t effectively handle all the duties yourself. You need a plan to attract, engage and retain qualified staff so you’re running at your optimum. Have an understanding that labour is an investment, not an expense. A detailed human resource plan can significantly affect a farms profitability and efficiency.
You may be telling yourself, “I’ll get around to these tasks when I have more time, more money, or when I get through another production year”. But don’t wait any longer. Eat your frog one bite at a time and stop letting anxiety, fear, or insecurity hold you back. Remember that successful, effective operators are those who address the important issues head on with a disciplined, focused approach. Real growth occurs when we dare to step out of our comfort zones. To get started planning for success, contact your Regional Farm Business Management Specialist or our Agriculture Knowledge Centre at 1-866-457-2377.