Business & Policy
You too need an advisor
Fear not the services of a good farm advisor: they are part of a positive evolutionary process, not just a single changing event!
March 5, 2008 By Larry Smith*
What happens when a group of qualified, dedicated professionals all work diligently together to help farmers capitalize on positive opportunities or navigate around obstacles to their success? Everyone benefits!
One particular aspect is seeking assistance in transitioning the methods of making sustainable and profitable farm decisions to a properly designed formal strategic management plan. The key questions that need to be answered are: why don’t very many farmers have documented plans, what would inspire them to do so; what unique or new training items would have perceived value and who should deliver it to them?
The days of farmers keeping all their ideas and plans in their heads, of producing as much as they can and letting the rest take care of itself are over. This is precisely the consultation focus of every individual member of the Canadian Association of Farm Advisors, a non-profit professional organization dedicated to assisting farm businesses. We constantly strive to increase the credible skills and relevant knowledge as farm advisors and we are all dedicated to being leaders in understanding the unique and confidential needs of every farmer’s situation. There are many valuable benefits to be derived from hiring a farm advisor.
There is proven pay back in creating and using an active business plan: as an important management tool to reduce risk, improve efficiency and increase profits. Some farmers tend to think that they either do not have the time; see the relevance due to all those complicated business variables; want undue documentation because it is too limiting; have the necessary visionary skills; or actually even know where to start.
On-farm advisors have found that by delivering user-friendly platforming with time-tested software packages and expert ag-training, farm operators can make a good start in managing
their businesses. A good example with a proven successful 10 year business improvement track record is NxLevel Agricultural Entrepreneurs training programs. With the potential subsidization available from Agriculture and Agri-Food Canada and interested agronomic partners, like ACC Farmers Financial and TD Canada Trust, it is simply impossible to consider the time and dollars in farm business management planning a bad investment.
Of course, financing, accounting, taxation, succession, risk and equity/operating capital management are important, but that is only part of the story. Strategic marketing design, promotional partnering, time and process resource management, as well as stress reduction, human resource behavioral science and alternate investment strategies must come into play in a proper business plan. Some farmers even suggest that commodity trading strategies, safety, quality and traceability issues should be included. Farmers suggest “we don’t necessarily need rescue programs for ineffectual farms, what we really need are the proper tools for viable farmers to be more efficient, profitable and sustainable, as well as improving control opportunities for diversification up the end-use value chain.”
A good business plan provides the opportunity for differentiating – value branding! When you abdicate your business responsibility to effectively market a product or service through strategic planning, to know who your customer is, what the big picture is, or know what the contingencies are and concentrate only on production, you give up your opportunity for reaching the best price and perceived value.
Do commodity price/cost levels, commodity marketing strategies, or commodity management support programs drive your long-term profitability? Not at all! Instead, the impact of uncontrollable or unexpected events can only be mitigated through specialized planning counsel: finding, describing, refining. This can achieve a competitive value edge in efficiency, quality, volume or a unique organizational offering. -end-
*Larry Smith is a business advisor with SMX Business Management Consultants based in Mitchell, Ontario. He has 30 years of career experience with the seed trade across Canada and provides a unique perspective on farm business operation and planning.