Positive cash flow can be a strong performance metric. But to boost revenue, improve production, reduce stress and ensure long-term viability of your farm or ranch, there are certain behaviors that offer proven effectiveness. Some of the most successful farming habits require strong business management techniques. The most resourceful farmers and ranchers practice these seven habits.
7 Habits to Implement
1. Analyze the Business on an Ongoing Basis
Most of your time is probably spent on day-to-day operations, such as harvesting crops and feeding livestock. Focusing on tasks is important, but the key to successful farming is proper farm management. Review your business plan and adjust it annually. Perform monthly reviews of projections against cash flow and adjust expenditures as needed. Staying on top of your business will allow you to make smart, timely decisions before revenues or production dip.
2. Manage and Reduce Risk
The business of farming and ranching can be uncertain, just like the weather. However, managing risk upfront with strategies that range from diversification and vertical integration to crop insurance and off-farm employment can help protect your agricultural business. Keep in mind that the software you choose will depend on the specifics of your operation.
3. Have a Team of Advisers You Can Count On
You know that it takes a village to run a successful farm or ranch. For those times when you have questions or need assistance, you’ll want a strong team of professionals you can call on. This can include lenders, veterinarians, agronomists, insurance agents, extension agents and equipment dealers. Overseeing a successful agricultural business means having the right experts available in case something falls out of place, which is bound to happen eventually.
4. Regularly Evaluate Effective Farm Technology
Conduct frequent technology reviews to ensure you’re using the right farm management software. Adopting new technology — like yield mapping or soil mapping with GPS — while phasing out ineffective technology can help improve productivity and profitability.
5. Reach Out to Other Farmers and Ranchers
Connecting with other farmers and ranchers brings both social and economic benefits. A strong network can lead to new business opportunities, much-needed help around the farm and even equipment sharing arrangements. Join national and regional farm or commodities associations to connect with others and stay on top of issues in the industry.
6. Engage in Continuing Education
The most successful farmers and ranchers are always learning. Look for training sessions, webinars, social media groups, seminars and conferences to expand your knowledge and skills.
7. Create a Farm or Ranch Succession Plan
A farm succession plan not only preserves your agricultural legacy, it protects the heirs — usually family members — who will inherit the farm. Smart farmers and ranchers have succession plans in place long before retirement and take steps to ensure a successful transition from one generation to the next.
Adopting these seven habits can boost the chances of long-term business success for your farm or ranch. Connect with your Mountain West agent to ensure your farm & ranch insurance is fitting your needs.
Source: Farm Bureau Financial Services