Making Dollars and Sense - British Columbia · Dollars and Sense Study. The research found ......

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Presented by: Heather Watson, Executive Director Pacific Ag Show 2019

The 7 Practices of Canada’s Top Farmers

Making Dollars and Sense

Today's Journey

1. The 7 Practices Driving Farm Financial Success

2. The Power of Planning

3. Learning Opportunities, Resources and Support Available

Who and What are in your

Farm Management

Toolbox?

Fact:

The success of any farm enterprise, regardless of size,

geography, or commodity is directly related to the farm

business management skills and practices of the farm manager

How do we know this?

• Ground-breaking research – the first to establish a measurable link

between business practices and financial success that is nationally

representative and cross-commodity

• Management activities tested:

• Strategy, Planning, Communications

• Marketing, Supply Chain

• Financial Management, Benchmarking

• Human Resource Management

• Risk Management, Contingency Planning

• Animal Care, Environmental Management

• Training, Education, Use of Farm Advisors

Dollars and Sense Study

The research found

7 farm business management practices

that drive farm performance…

The 7 business management practices driving farm financial success:

1. Lifelong learning, skills development

2. Business decisions made using accurate financial data

3. Seeking the help of business advisors and consultants

4. Having a written business plan, following it, reviewing it annually

5. Knowing, monitoring your cost of production and what it means

for profit

6. Assessing risks and having a plan to manage and mitigate risk

7. Using a budget and financial plan to monitor financial position

and options

So…how are we doing?

1. Lifelong learning, skills development

2. Business decisions made using accurate financial data

3. Seeking the help of business advisors and consultants

4. Having a written business plan, following it, reviewing it

annually

5. Knowing, monitoring your cost of production and what

it means for profit

6. Assessing risks and having a plan to manage and mitigate

risk

7. Using a budget and financial plan to monitor financial

position and options

49%

32%

59%

26%

50%

32%

33%

What do we stand to gain?

Farm Business Management pays!

Actual

Value

Industry

Rating

Percent

Change

Asset TurnoverTop 25% 20% Moderate

100%Bottom 25% 9.7% Vulnerable

Gross Margin

Ratio

Top 25% 50% Moderate

155%Bottom 25% 19.6% Vulnerable

Return on

Assets

Top 25% 10% Strong

525%Bottom 25% 1.6% Vulnerable

That’s the difference between $100,000 and $16,000 profit.

It’s not just about the money…

CTEAM alumni were asked the impacts of the program…

Financial Impacts include: profit, debt management,

reduced costs

Business Impacts include: having a process for decision-

making, performance management and a network of experts

Personal Impacts include: confidence in management

decisions, the ability to prioritize, provide clearer direction,

and understand personal dynamics to better manage people

and communicate

It’s about the confidence that comes from preparedness

• Results revealed that there were significant financial impacts

(over 60% ranked ROI >50% after program costs)

• However, business impacts (ex. improved decision-making)

outranked financial impacts

• And, personal impacts (ex. confidence in decisions, the ability

to prioritize and better manage people) far outranked both

financial and business impacts

There is an immense opportunity to grow our capacity by investing in

farm business management

Proactive planning to best manage both what is…

IN the farmers’ control: OUTSIDE of the farmers’ control:

Management means being proactive: “An ounce of prevention is worth a pound of cure.”

Minimizing Threats, Taking Calculated Risks,

Seizing Opportunity!

Mitigating Negative Impact

Coping with Negative

Outcomes

Farm Business Management Insurance & Government Programs

Farm business management means…

• Taking a proactive approach to build the underlying

capacity to weather any storm and seize every

opportunity, positioning the farm for continued

success

• It boils down to having accurate, reliable data to

create a realistic picture of what’s possible and a plan

to guide you towards success

Let’s take a closer look at the 7 practices…

• When was the last time you assessed your skills

against the skills required to meet the current and

future needs of the farm?

• How about the skills of your farm team?

• Do you have job descriptions for all of these

positions, including core competencies and

experience requirements?

• Take the time to create a skills development plan as

part of the business plan

• Create a culture of lifelong learning to create the

space for new ideas and empower your team

Lifelong Learning, Skills Development

“When the human mind is stretched, it never returns to its original size —

similar to most new underpants.”

Do your Best, Hire the Rest

• Identify where you want to focus your energy and time, where you

need others to be supporting you

• Use professional farm business advisors (beyond your accountant,

lawyer and lender) to facilitate the process and keep you on track

• Personal coach

• Psychologist

• Marketing specialist

• Etc.

• A multi-disciplinary team working together for you

• Not just “the professionals” – consider peer advisors

• Are you using a recognized accounting system for your

farm?

• Is data entered in a timely manner by a qualified

person?

• Is data easily changeable (what-if scenarios) and ready

to review and analyze at a moment’s notice when

making business decisions for your farm?

Business Decisions via Accurate Financial Data

• While you may know if you’re making money, do you know

what’s making you money, what’s not?

• How many distinct businesses are you running?

• Have you prepared a budget for your farm, and the distinct

business entities within it?

• Do you review your budget and financial plan when making

business decisions?

• While assets are important for access to capital,

cash is still king to weather the storm and/or

seize opportunity

Budget, Monitor Your CoP, Financial Planning

• Uncertainty can lead to stress and poor decision-making

• Do you know what’s in your control? What’s outside of your

control?

• How prepared are you? Are you taking a comprehensive look

at risk and risk management (people, finance, markets,

production, policy, strategy) and the connections between

them?

• What measures could you put in place?

Plan for Risk and Uncertainty

• Your plan is your roadmap to success and trusty side-kick when

stress runs high or times get tough and decision-making

becomes clouded

• Writing the plan down facilitates important conversations about

the future of the farm and everyone’s role within it

• The business plan is the most effective tool for uniting the farm

team around a vision as a guiding light to keep the farm

healthy for generations to come.

Have a Written Business Plan

Assess your business (January)

Take stock of your farm in the context of change.

Plan your future (February-March)

What is your vision? Mission? What are your priorities and

goals? How will you get there?

Implement and Monitor your plan (April-August)

Host a start-up meeting to discuss priority items, timelines and

goals to operationalize the plan and to guide your decision-

making.

Assess your performance (November)

Measure your progress towards achieving your business goals

over the past year and start to think about next year’s goals.

Like the seasons, business planning is a cycle:

• Where you want to focus your energy and time

• Where you need others supporting you

• What skills must be developed or hired into the operation

• Industry experts who can support you

Important Outcomes from Conducting a Business Assessment

BC Agri-Business Planning Program

• Webinars, Workshops, Conferences

• Publications

• Land-matching program

• One-on-one advisor coaching

• List of qualified business consultants

Funding and Support

• Cost-share funding for:– Advisory services

– Speaker and event support

• $5,000/individual or $30,000/groupVisit: www2.gov.bc.ca/gov/content/industry/agriculture-

seafood/programs/agri-business-planning-program

Some opportunities to build your farm business management skills

and network…

Planning for Success websitewww.pledgetoplan.ca

▪ Accessible from any mobile device or computer

▪ Audio, Video, Chat, Presentation, Podcast

▪ Over 200 archived presentations

▪ Use for lunch and learn sessions

www.Agriwebinar.com

Information at your fingertips.

Bringing top management experts to you –

anywhere at any time.

Agriwebinar®

Transition Planning Workshop for Farm Families

March 20 & 21, 2019 - Coast Langley City Hotel

Is your family farm in a state of transition?

Are you looking to start the succession conversation?

The Bridging the Gap Workshop welcomes farm families to work with Elaine and

Cedric to address some of the elephants in the room that are preventing or hindering

succession planning on the farm.

Day 1 is for the whole family!

Day 2 we encourage Young Farmers to

attend FCC Ignite while the rest stick

around to continue the conversation on

how to bring your kids into the farm

business.

Featuring:

Leading Management Experts | Bridging the Gap Forum

National Farm Management Resource Showcase

Join us December 2-4 in Fredericton, NB!

Meet fellow farm

management enthusiasts

from across Canada to

share insights and build

your farm business

network.

Everyone welcome –

farmers, advisors,

academics, industry

organizations and

government.

For young farmers…

Canadian Young Farmers Forum

www.CYFF.ca

Provincial Groups www.BCYF.ca

Annual Conference

App to stay connected

2019 National Conference April 5-7, Toronto

For young farmers…

Young Agrarians

www.youngagrarians.org

Farmer Blog | Workshops | Land-Linking | Mentorship

FEB 2, 2019: WINLAW, BC – Business 101 Workshop

+ Evening Potluck Social & Farmer Slideshows

To recognize young farmers… www.oyfcanada.com

2019 National Conference December 4-8, Fredericton

BC & Yukon Regional Event: March 13, 2019 - Abbotsford oyfbc.com

▪ Online Risk Management platform

▪ Identify, assess, prioritize risks and create management plans

• AgriHR Toolkit

• HR Policy

• Employee

Handbook

• Labour Market

Information

• Job Search Tool

www.cahrc-ccrha.ca

• Farm Safety Plan

• Online Learning

• Annual National Conference

• Farm Safety Week

www.casa-acsa.com

Next Level Management Programs, Learning Opportunities

Canadian Total Excellence in Agricultural Management

CANADA'S ONLY NATIONAL FARM MANAGEMENT TRAINING PROGRAM

▪ Specifically for Producers and Ranchers

▪ Use your Own Farm Data to Create your Strategic Plan

“For a number of years, we knew we wanted to

move forward, but we didn’t have a clear path of

where we wanted to go and how we can get there.

CTEAM has shon a light on the right path for us.”- Jason Lyons, CTEAM Graduate

Next Level Management Programs, Learning Opportunities

• The Executive Program for Agricultural Producers

(TEPAP)

• Leadershift leadership development program

• Strategic Coach www.strategiccoach.com

• Peer Advisory Groups

• Advisory Boards

• Farm Management Clubs

• Nuffield Canada - applications are due in April!

• National advisor listing by province and region

• Committed to continuous learning

• Hosts Farm Management Update, Succession Update

and other events for farm advisors

www.CAFANET.ca

Next Steps

✓ Conduct a farm business assessment to identify strengths, weaknesses and opportunities (get the whole farm team involved)

✓ Create an action plan to fill any gaps towards reaching your business goals (build this into your Plan)

✓ Identify and seek skills development training and/or advisory services

✓ Host regular farm business team meetings to track progress and maintain a management focus for your farm

Important: When you return home after this event, host a farm team meeting to share the learnings and insights gained. Demonstrate how investing in skills development is invaluable to the farm to endorse a culture of sharing insights and lifelong learning on the farm.

Heather Watson

Executive Director

Farm Management Canada

250 City Centre Avenue, Suite 300

Ottawa, Ontario

K1R 6K7

Tel: 1-888-232-3262 or (613) 237-9060

Email: heather.watson@fmc-gac.com

www.fmc-gac.com

Thank you. Questions?

@FMC.GAC

@FMC_GAC

Watch us on YouTube

"Coming together is a beginning;

keeping together is progress;

working together is success." -Henry Ford

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