Setting business goals can help steer farm business activities in the right direction. Business managers must look forward and plan ahead to create a business that is in line with their strategic goals.
Business strategy planning is the first step toward successful farm management. Your agricultural business needs to be prepared for all eventualities.
Build on these skills to increase your competitive advantage:
- Understand your strengths and core competencies
- Be flexible in achieving your business goals
- Re-evaluate your path as new information becomes available
- Know when you have reached your target
- Learn from previous successes and failures
- Consistently evaluate your past business activities
Basic Strategic Approaches
Decide on a basic strategy to help define the steps and metrics required to achieve your ultimate objective:
- Rapid growth to surpass industry competitors
- Keep pace with industry competitors
- Defend existing status as an industry leader
- Catch up to industry competitors
- Turn around an under-performing farm operation
- Maintain stability with minimal effort
- Maximize opportunity before withdrawing
A growing business will display many of the following characteristics:
- Prudent mix of equity and debt
- Robust contingency funds
- Above-average profitability
- Ambitious yet achievable goals
- Expanding markets
- Prominent franchise or brand
- Substantial resources devoted to innovation
- Competitive quality, service or functionality
- Strong relationships with customers
- Specialist or leadership position
- Excellent staff and HR practices
Assess your Farm Business Practices
The Taking Stock workbook guides agricultural producers through a self-assessment of their current farm business management practices. This process will identify your strengths and weaknesses as well as prioritize actions to address personal and business goals.
The resulting Farm Action Plan is required to access program funding for consulting services. Having a better sense of your overall situation, goals and priority actions will enable you to work with advisors to better target and meet the farm’s specific needs.
Managing Business Cycles
The four seasons have a profound effect on plants, particularly perennial ones. Similarly, all businesses, both individual operations and broader business sectors, go through phases of growth, prosperity, contraction and consolidation. The timing of these phases can be unpredictable and hard to recognize while they are happening.
Business cycles are more pronounced or well known in some sectors over others. However, in newer sectors and emerging opportunities, the cycles may not have had time to develop, making them harder to detect and anticipate.
Keep these cycles in mind and watch for indicators of where the industry cycle has been and where it is going. Doing this could help you capitalize on opportunities or anticipate and strategize for upcoming tight periods.