Farming is like any other business, it has its peaks and troughs and there are various factors beyond an individuals’ control that can mean things don’t always go our way.
However, as always there are several elements that can be implemented, monitored and reviewed which are within scope for many. Here, Roddy McLean, director of agriculture for NatWest, gives his top business tips for farmers.
1. Embrace change and opportunity
With Brexit on the horizon, farmers should view this as another catalyst for change and consider how this could lead to new opportunities.
Roddy warns not to use Brexit as an excuse to let businesses stagnate and urges people to keep driving forward focussing on the areas that can be controlled and influenced. For this, a mindset that is open to challenge and change will be needed.
2. Plan ahead
He also suggests that farmers consider carrying out a business audit to understand the resources available within a business, the graphic below provides some food for thought here.
Farming may be the cornerstone of your business but consider what else you and your enterprise could do to achieve the best return from your assets. Remember, what is perhaps not an opportunity now, may be in the next five years and it’s therefore worthwhile investigating this now to get ahead of the market.
It’s also just as important to understand what the limiting resources (including capital) are within the business, why this is the case, and what actions can be taken to work with or overcome these limitations.
(Source: Farms for the Future 2005)
3. Work on your business rather than in your business
Value your time. ‘Anyone’ can scrape the yard, fill the feeder wagon, cart grain, for example, and it’s therefore important to use your time and energy to ensure you are getting the most out of your business.
Roddy suggests allowing time during your working week to strategically plan and set objectives for your business. Your time doing this is more remunerative than carrying out the day-to-day tasks. Don’t be the ‘busy fool.’
Read more from NatWest here
4. Base decisions on evidence
Record and analyse data and embrace technology to make data capture and analysis easy and straightforward.
Roddy urges farmers to ‘challenge all that is being done.’ The agricultural industry can sometimes be constrained by history, and although this is a great teacher it shouldn’t become the master.
He urges people to park statements like, ‘we’ve never done it that way’, ‘we’re not ready for that’, ‘we’re doing all right as it is’, ‘something like that won’t work’, and consider what is right for the business at the current time.
5. Don’t forget self-care
This can often be a taboo subject within the agricultural industry, however taking care of your own well-being is hugely important.
It’s ok to say you are not ok and no one should ever feel too proud to ask for help. Roddy suggests that everyone involved in your farming business should feel they can:
6. Run your business like a public limited company
Although it may be a lifestyle choice for some, a farm should be run like any other business.
Roddy suggests holding regular ‘board meetings’ where quality time is spent working through a prepared agenda and minutes are taken with actions that depict what is required and by whom and when.
This focus will drive people to be accountable for various tasks and ensure people are not distracted by everyday activities that would be present if you had a quick discussion around the breakfast table.
7. Prioritise succession planning
Has succession been discussed and agreed with the wider family? Do you know, and have you discussed with family members their personal and business objectives?
Don’t just assume you know what others want in the future.
Is your will up to date? Do you have a written partnership agreement? Does it contain a continuation clause allowing the business to continue trading and for the bank accounts to be kept operational on the death of one of the partners.
Although these are eventualities we don’t necessarily want to think about, they are hugely important to allow the business to keep functioning should anything happen to key personnel. Get it sorted now and it’s done.
8. Become an employer of choice
When employing a team of people, there is nothing worse than your employees feeling undervalued. Roddy suggests considering the following to help keep your team upbeat and motivated:
9. Strive for excellence
There is often always room for improvement. Even if there are just small tweaks that could be made to help improve performance, to be seen to be striving for excellence will have a positive influence on the rest of the team.
Creating an environment where staff feel empowered to come up new ideas, where you are constantly looking for ways to reduce waste or are benchmarking the business to understand why your business is performing differently to others are only positive steps to help continually move the business forward.
10. Understand your customer
Engage with your customers and understand what adds value or cost to your partners within the supply chain. Developing trust with these partners through collaborative partnerships, co-operation and communication will help you ensure your supply chain is the best it can be.
In summary, Roddy urges farmers to run their farm as a business. Budgets should be produced with the business managed by them and difficult decisions shouldn’t be shied away from.
There are always excuses that we can make to not start introducing change to a business, but there is no better time than today to start thinking how small changes could make significant differences for the better.
NatWest, farming, farm business
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