Is your agribusiness ready for the new year?
As 2019 approaches, don’t miss the opportunity to prepare your agribusiness for the new year. Whether you want to diversify or grow your operation in the upcoming year, taking a step back and assessing your operation and its long-term financial health is a critical step in planning for the new year. Here are three key steps you can take to prepare your agribusiness for year-end and kick-off 2019 on the right foot.
1. Compile Documents and Records of Your Operation
As harvest season wraps up, begin compiling documents and records of your operation from the past year. This will include balance sheets, accrual income statements, schedules such as accounts receivable, accounts payable, and inventory and equipment lists. These documents will be essential for 2019 financial planning and the upcoming tax season. Your financial advisor, CPA, and ag lender (if you are looking for financing or refinancing) will need to review these documents to analyze your financial posture.
2. Create Goals and a Business Plan
Now is the perfect time to take a step back and analyze what did and did not work for your operation this past year – and in previous years – to assist you in creating new goals and strategies for the upcoming year. Having a business plan in place for your operation that contains key metrics related to productivity, inventory, finance, and administration will position your operation for success in the long-term. Moreover, utilizing data and insights such as historic crop yields, commodity pricing, and the market outlook will help you set a realistic budget and attainable goals to prepare your agribusiness for the new year.
3. Prepare for Change and Measure Progress
If there are any planned changes for your operation you can make in advance of the new year, begin those now, in order to stay ahead. As the year progresses, maintaining detailed, accurate records of your operation, staying-up-to-date on trending topics and issues in the market, and addressing the financial health of your operation will be key steps in preparing for change.
Pressing issues such as trade uncertainty, the future of the Farm Bill, and budget cuts to USDA programs are likely to remain top-of-mind for the agricultural industry. Farmers will need to conduct consistent evaluations of their operation, to look for ways to reduce expenses and increase efficiencies. Your success will be dependent on your ability to assess and streamline your operation and create efficiencies throughout the year.
Nothing is more important in running a successful operation year over year than having accurate data and records to help you plan, adjust on the fly, and maximize the return on your investments. If your goals include expanding, diversifying, or refinancing your farm or ranch operation, contact our team of land loan experts to have your questions answered today.