Recently, I participated in a videoconference for producers that began with accounts from alumni of Farm Credit University’s Ag Biz Planner Program, an online business planning course. It was a special treat to listen as program participants detailed their individual benefits and how the program has helped them to become better managers and producers. Let’s take a look at some of their points.
According to the alumni, one of the main take-away points was the lender’s perspective. That is, the advantage of understanding how lenders approach an account was very helpful. One tool that helped highlight that perspective was the projected cash flow, followed by the monitoring of results as compared to the projections. This allowed participants to tweak their business strategy with the benefit of an outside perspective, namely their lender. In one case, a participant shared his family partners were skeptical of business planning, but the exercise of developing a projected cash flow boosted their confidence in the business planning process, particularly when their actual financial results turned out to be within 5 percent of the projections.
Another alumnus mentioned the benefit of the diverse input from a variety of sources. This level of engagement in areas such as production management, expense control, and business and family planning was extremely valuable. In this case, the course led to weekly planning meetings and yearly strategic planning for the family business. Other alumni shared that the planning process was especially valuable in better utilizing their team of advisors.
While some already had advisors in place, several graduates of the Ag Biz Planner Program created a team of advisors as a result of the course. In fact, many meet with their team quarterly to discuss strategies and tactics. As reported, the outside ideas and questions generated by the team are critical in the success of the business going forward.
One alumnus indicated the benefits of business planning are directly correlated with the input and time commitment you dedicate to it. He shared that in his second year, his time for the program was limited, which impacted his benefit. In particular, he felt the planning exercises were the most crucial.
Similarly, many of my former students from Virginia Tech and Cornell Universities have told me they regret not dedicating more time to their studies while in school. However, it is often the experience and maturity of age that help us realize this desire; which is a large part of why adult students tend to be much more motivated.
In summary, especially when income and net worth are on the line, business planning is critical. The Ag Biz Planner Program outlines proven tools for producers to improve business management, efficiency, as well as profitability. As today’s economic reset continues, remember to utilize available resources, like online courses, to develop and adjust your business strategies for success.
For more from Dr. Kohl, follow his "Road Warrior" blogs.