WITH uncontrollable conditions at the forefront of farmers' minds due to the unfolding Australian bushfire crisis, it is important farmers review any controllable factors impacting them on a yearly basis to ensure their business remains proactive and sustainable.
Bank review season is under way and reflecting on the year that was and the opportunities that lie ahead is an important part of the review process to prepare farming businesses for the new year.
Many farmers may not set aside time to look in-depth at the viability and sustainability of their businesses and to take stock of their present financial position.
It is important to review what is making money for the business, what enterprises are and are not profitable, where costs can be cut without affecting income flow and goals and plans for the future.
Staff workload and skills need to be reviewed to plan any further training or education exercises or any hiring of new staff.
Reviewing the previous years' cash flow, preparing a forward cash flow for the next 12 months and determining a current and accurate statement of position are good exercises to determine the financial position of the business.
Farm asset and liabilities information needs to be kept up-to-date to include in the analysis of business performance.
Expanding on this, gross margins and other data analysis programs can provide further detail on the profitability of each enterprise.
Involving external professionals such as accountants, agronomists, farm consultants, livestock agents, financial planners, general practitioners and rural financial counsellors is critical in helping effectively manage a farming business.
Actively asking these professionals questions, and providing them with up-to-date information, documents and an accurate outlook of business performance and health and wellbeing will ensure recommendations can be made regarding the best outcome for the farmer and the business.
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A review of the mental and physical health impacts on the owner, family and staff within the business is very important to maintain sustainability.
Staff workload and skills need to be reviewed to plan any further training or education exercises or any hiring of new staff that may need to occur to even the workload, make working more enjoyable and improve efficiencies.
Business transition and retirement plans need to be decided to put a firm progress plan in place and to also ensure all parties involved understand the progression of the business.
Contacting professionals and reviewing all aspects of the business can be confronting.
But, assessing the present situation honestly and promptly is important to accurately implement a successful strategy for the years to come.
- Details: 1800 836 211 or ruralbusinesssupport.org.au
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