Farm business planning helps tackle the challenge of change
Change is everywhere in farming and often everything seems to be in flux, whether it’s markets, trade relationships, weather, or family relationships.
Depending on the circumstances, farmers react differently to change says Heather Watson, executive director at Farm Management Canada (FMC). “Some people see that as unwelcome and unnerving; others see it as an opportunity to harness that change and seize opportunity.”
Managing the challenge of change is the theme of FMC’s annual AgEx conference, taking place this week in a virtual format. In this interview with RealAgriculture’s Bernard Tobin, Watson says farmers wanting to effectively grow and manage change in their businesses need to know where they are, know where they can go, and how to get there.
Farmers really do need to plan for success, says Watson. Many, however, get a failing grade on business planning and setting themselves up for success. Watson notes that a recent FMC survey indicates that only 22 per cent of farmers have a formal business plan. These farmers say the benefits of planning are many: from profitability to increased confidence, the ability to make tough decisions, family and farm team harmony, and reduced stress and anxiety.
Watson also points out that 41 per cent of farmers say they are succeeding without a formal business plan — some farmers feel they have a clear vision in their head of how the business should be run and there’s no immediate need to commit it to a formal plan.
But Watson notes there are many benefits to be realized when committing the plan to paper. “When you put something in writing it becomes real,” she says, adding that it’s important that all the stakeholders in the farm know how they fit into the plan. It facilitates understanding of future roles and gives everyone a stake in building a vision for the farm. (Story continues after the video.)
A formal business plan is also a key reference point in stressful situations when decision making becomes clouded. In tough times, a plan developed with level heads in calmer times can play a critical role in determining a path forward for the business. Watson adds that business plans can also be used for contingency planning and setting out rules of operations and procedures when the business sees opportunity or faces obstacles. “A business plan can help us sort through what we should be doing if this happens,” she says.
Business plans can also help farmers better manage stress and support mental health. FMC surveys indicate that 88 per cent of farmers who follow a business plan say it has contributed to their peace of mind.
Watson says farmers and agribusiness managers can attend AgEx 2021 for free by visiting agexcellenceconference.ca. Sessions can be viewed live during the conference. Recordings of speaker sessions will be available on the website until the end of December 2022.