Many of you who follow this column and my speaking series’ around the continent know of my ownership interests in a dairy farm and dairy creamery. Both businesses struggled initially as my partners launched their entrepreneurial concepts to enhance profits and lifestyle on their family farms.
My entrance into these business models came with my academic educator-focus on the importance of planning. With some initial reluctance from our partners, this concept has grown into an annual event, followed by formal business planning development.
After completion, the business plan is not stored on a shelf, but used each month by our management teams to tweak and involve in an objective, disciplined manner as business conditions quickly change for better or worse.
Dos and Don'ts
Both businesses have one-day retreats that are facilitated by outside parties. No cell phones or text messaging are allowed to help focus and concentration by board and team members.
- Pre-surveys are filled out by participants before the meeting to prepare participants for richer and deeper discussion. The agenda and flow of the meeting is established based on these questionnaires.
- Summaries of meeting minutes are taken and filed to create institutional memory and the legacy of the business.
- Financial and business metrics are established to provide guidance, prioritization and business strategy. This includes capital expenditures, a prioritized list of needs and wants, as well as training and education.
What has been the power of this planning? First is the business' ability to proactively plan and develop strategies for countercyclical downturns and capitalize on market opportunities. Second, it has assisted the whole team in better understanding of the business’ financial and management reports that tell the story and stimulate questions for deeper and richer discussion and decision-making.
It is interesting how many producers do not get it! That is, the power of formalized planning, and then the execution and monitoring of strategy. This whole package can improve the bottom-line and enhance business, family, and personal life balance.
Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at firstname.lastname@example.org.