Choose data to drive your farm business forward

External pressures continue to influence the approach to farming practices. It’s only the most resilient businesses who will survive, and potentially thrive in an industry led by rising input costs and reformed payments

Ben Canning, Farm Business Consultant at Promar International, says that there is no point sticking your head in the ground and shying away from the new challenges farm businesses have to face.

“Ultimately, farm managers and owners need to be responding with a clear strategy. It’s likely that they’re going to have to make some important changes to their business, and to maximise the accuracy of these decisions it’s vital that they think about the position of their finances.

It’s important to start assessing the business’s current position, evaluating how change could impact this position and creating a realistic action plan.”

How to set a realistic plan of action

1. Prioritise production tracking

Track your operating expenses, as well as crop and milk production. This is a good time to look closely at your margins and reflect on how well your business is performing.

Perhaps you’ll find that radical change is required, and adjusting the system or size of enterprise needs to be considered? 

2. Budget and forecast in detail

If you don’t know where you’re going, how do you know if you have got there? Or if you did so in the most efficient way? That is most traditionally the justification for having a map, but it applies equally as well to budgeting and forecasting.

Let’s first look at setting a clear budget. The starting point here should be your latest accounts and evaluating how they look.

Better or worse than the year before? What are the lessons to learn moving forward and what do you need to do to maintain or improve performance?

Compare your figures with benchmark data. The average herd last year produced more milk than the year before. What about you?

To take a long term perspective of your business, you need to look at forecasting. This’ll help you to model various scenarios and evaluate whether your business will meet your strategic growth plan.

© Promar International

An advance in farm management accounting software means that powerful forward planning, over a 5 year horizon, has never been easier.

You can have a clear snapshot of what business success could like, and how it can be achieved.

3. Don’t dismiss the power of communication

The only thing that remains constant is that your entire team are still responsible for implementing any production changes, and accountable for the success of these.

They are working close to the ground, every day. That means they also know the ins and outs of the business, and what is or isn’t working.

As a result, their input is inevitably going to be highly valuable and will likely lead to improvements in areas you may have never considered.

Collaboration and communication needs to extend beyond the immediate team. One of the main reasons a project or enterprise can fail is because the stakeholder management has been mishandled.

To build a progressive and clear vision, you need to know how to communicate with all parties involved and provide them with the right tools.

4. Keep an eye on your cash flow

A cash flow forecast will allow you to plan for a rainy day, as well as for a blue sky scenario. Showing you the reality of your financial position, it is an invaluable tool for growth, helping you to know that you will have the right money at the right time.

You’ll also be able to pinpoint times when you have a surplus of cash that can be reinvested for growth. Furthermore, with scenario planning you can model out the impact of different decisions on your financials.

Get a complete picture of your farm business with Agstute

Agstute is Promar International’s new financial farm management service that utilises cloud-based technology to deliver accurate, real time data straight to your fingertips.

Combining accounting, reporting, planning, benchmarking and forecasting, it will be a key tool when it comes to strengthening your business for future robustness and adaptability. 

What are the next steps?

At Promar, we offer simple pricing options to suit every farm type. We’d be happy to set up a 1-2-1 meeting with you to discuss the best option for and your business, and to provide a detailed demonstration of Agstute.

We will also be exhibiting at Dairy Tech on 7th April 2022, where you’ll have the opportunity to delve deep into the workings of Agstute and its capabilities.

Contact us today to learn more. 01270 616800 / www.agstute.co.uk