Wednesday, January 28, 2015

Important Information On Farm Business Planning Finger Lakes

By Ines Flores


Planning is very important for success of any business. Assessing the feasibility of an agricultural enterprise is the first step to developing a business plan. The plan should not just be drawn, but put into practice for it to be of help to the farmer. Determining what to grow and how to sell it are the first steps in starting a agricultural-based business. The plan should be simple, realistic, complete and specific. The tips below are vital when formulating farm business planning Finger Lakes.

Use the plan, to set goals you want to achieve. These goals should be specific, measurable. Realistic, achievable and time bound. Many financial institutions will want to see a budget before they agree to offer any credit. This is because the lenders use records to assess whether an enterprise is financially sound. The goals may be set to be achieved within a year or a period from two years onwards.

Make a plan whose goals, date and objectives are realistic for the operation of the farm. You want a plan that is easy to read and understand and is easy to implement. Others may use the plan, such as lenders and financial institutions. The planning process is not static. Continue to use, review and analyze the plan as your operation grows and changes. It is reviewed at the end of the year.

Let your plan capture the mission and vision of the farm. The goals should be clear with objectives to be achieved by stakeholders, the owner, employees, lenders and customers. The stakeholders want to be clear on the justification of the existence of the enterprise, and the direction the school is going to take. Take into consideration production methods, financing procedure by lenders and marketing personnel. When planning, cover details from sowing to harvesting.

Financial statements are important in helping assess the overall success and profitability of your enterprise. The statements are prepared at the end of the financial year. The balance sheet will show how much your agricultural enterprise is worth. The records are used for future reference by lenders when processing of a loan. Use the current rates to assess your assets and liabilities. In addition, factor in depreciation of machinery and tools where applicable.

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.

Implementation of the plan will set your business apart from others. There is marketing of the products, which is vital to the profitability, and viability of the land. During the implementation phase, you will realize that some strategies are not feasible to work out. Such should be revised or discarded.

Farming unlike other businesses has many risks and uncertainties, most of which are natural. This may lead to exit from the enterprise. Thus, it is critical to have an exit strategy. Though a farmer might be reluctant to quit, at times it is the best reason for your farm and your family. Primary causes of exit are death of the farmer, terminal illness, and demise of a partner in the enterprise, financial problems and old age.




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