Proper planning in agricultural production allows one to analyze the financial feasibility of the proposed farming business. It helps in making more informed and strategic decisions that may increase the chances of success and reduce the risk of financial loss. A good plan should be simple, realistic complete and specific. You need to put the plan into practice for it to be used. The information that follows is essential in farm business planning Finger Lakes.
A plan is essential in setting goals, processing of credit; evaluate the effectiveness of business strategies for long term planning. The goals should be specific, measurable, attainable rewarding and time bound of what the business expects to achieve in future years. You can set short-term goals that are achievable in less than one year or long-term goals that are accomplished in a period of more than one year.
Go for goals that are realistic. Consequently, the dates and objectives should be in tandem with the operation of the farming business. Formulate simplified goals, which are easy to read and understand even by other not so learned people. However, the goals keep on changing as the business grows thus review and analyze the plan regularly.
Create a mission statement for the farm to reflect the objectives to the public, employees, customers, lenders and owners. It should focus on the reason why the business exists, the purpose the business is going to serve and the direction the business is headed. In your plan, formulate the goals of the farm like production, marketing personnel and finance. In production your plan, should include everything from planting to harvesting.
You need to prepare financial statements at the end of the fiscal year. The balance sheet will list and detail assets and liabilities. It gives the net worth of a farm with a record for future reference. It is important to remember to use current market rates when evaluating land, equipment, buildings, machinery crop and livestock. In addition, you need to factor in interest on loans and any payment on arrears.
The profit and loss account document will show whether the farm is making a profit or a loss. It lists the income, expenses and profit in a fiscal year. Most farmers use the profit and loss statement to calculate income for tax purposes. You may use the cash or the accrual method to prepare the income statement.
Consider your implementation plan as a list of must do. Implementation will be done within a specific period. You will notice that some areas are not practical to implement. Going through the plan will help identify bottlenecks and avoid these pitfalls.
You need to include an exit plan. The exit plan should include criteria to indicate it is time to exit and probably try something new. This is because farming, unlike other businesses has several risks beyond human control. Some reasons for exiting are farmer's illness, death of a partner, financial crisis, age and generation gap.
A plan is essential in setting goals, processing of credit; evaluate the effectiveness of business strategies for long term planning. The goals should be specific, measurable, attainable rewarding and time bound of what the business expects to achieve in future years. You can set short-term goals that are achievable in less than one year or long-term goals that are accomplished in a period of more than one year.
Go for goals that are realistic. Consequently, the dates and objectives should be in tandem with the operation of the farming business. Formulate simplified goals, which are easy to read and understand even by other not so learned people. However, the goals keep on changing as the business grows thus review and analyze the plan regularly.
Create a mission statement for the farm to reflect the objectives to the public, employees, customers, lenders and owners. It should focus on the reason why the business exists, the purpose the business is going to serve and the direction the business is headed. In your plan, formulate the goals of the farm like production, marketing personnel and finance. In production your plan, should include everything from planting to harvesting.
You need to prepare financial statements at the end of the fiscal year. The balance sheet will list and detail assets and liabilities. It gives the net worth of a farm with a record for future reference. It is important to remember to use current market rates when evaluating land, equipment, buildings, machinery crop and livestock. In addition, you need to factor in interest on loans and any payment on arrears.
The profit and loss account document will show whether the farm is making a profit or a loss. It lists the income, expenses and profit in a fiscal year. Most farmers use the profit and loss statement to calculate income for tax purposes. You may use the cash or the accrual method to prepare the income statement.
Consider your implementation plan as a list of must do. Implementation will be done within a specific period. You will notice that some areas are not practical to implement. Going through the plan will help identify bottlenecks and avoid these pitfalls.
You need to include an exit plan. The exit plan should include criteria to indicate it is time to exit and probably try something new. This is because farming, unlike other businesses has several risks beyond human control. Some reasons for exiting are farmer's illness, death of a partner, financial crisis, age and generation gap.
About the Author:
When it comes to farm business planning Finger Lakes residents can depend on Molly Bowen Ames, Farm Business Consultant. Discover why a farm business plan or a strategic plan might be just what you need, when you visit http://farmbusinessplanning.org today.