Now would be a good time to review your whole business and life and effectively carry out a “Business Health Check”. Where should one start? For most people this is one of the hardest areas to define. To achieve a good conclusion, one must know where you are striving to get to. By definition, this implies that you have a long-term plan or set of goals to achieve. If this is not the case, then start and develop a clear set of goals that will guide the business strategy. Strategy is the method that will be adopted to achieve the goals i.e. the way you tackle the business of farming or any other wealth generation.
As part of the strategy you will define a timeline and methodology to achieve specific targets. In reality the strategy may consist of a series of targets that have varying life spans or timelines. By building all of these together into one model, the plan will become more obvious. This must be achievable and realistic and will need to be tested to ensure it is robust and sustainable in many differing ways and conditions. Arising from this, investment plans and capital allocations plus borrowing can be clearly identified.
At all times realism needs to be a factor within the strategic plans. As part of this it is sensible to start by reviewing the resources available to you and what constraints apply. This exercise must include all of the physical aspects e.g. land, buildings, equipment and livestock. Realistically it should also examine the capital available and borrowing commitments while taking account of previous financial performance in terms of accounts and physical results. By doing this you will get a true understanding of what is possible and not achievable.
When you know what you have got, you can then assess where the constraints on your desired approach occur. These may be physical constraints or political ones that are not easily overcome. You will also have to be realistic about the skills and ability of yourself and your staff to undertake the route proposed. At this point the gaps in the system should become more obvious and you can then make plans to adapt the business to account for them. This may involve scheduling a development and subsequent investment plan to build in. It may also involve a training scheme or the employment of a new staff member or purchasing in of the missing skill set. All of this takes time and money to implement.
Contact Ian at firstname.lastname@example.org or your local FCG office, to help you carry out a Business Health Check.