Your New Year Farm Financial Checklist

Whether it’s your farm’s first year in business or its 50th, every farm owner should consider reviewing their operations, financial state and insurance at the top of the year. This farm planning checklist can help.

How to Build a Successful Farm Plan

A well-executed annual plan is your roadmap to profitability, growth and overall success. Whether you need a good starter guide, a basic farm plan example or tips for updating an existing plan to prepare for your next growth phase, these are the key items to keep in mind when it comes to farm planning.

1. Review Your Monthly Cash Flow

The cash flow budget is a plan of how cash will be coming into your farm or ranch operation (cash inflows) and leaving the operation (cash outflows). Inflows typically include cash from operations, capital assets sales and any non-farm income that is used to pay farm bills. Outflows are things like cash outflow from operations, capital asset purchases, living expenses and debt service. Seeing the cash flow over the previous year will likely highlight updates needed in your operation, either to bolster a strength or address a weakness.

1. Review (or Create) Your Farm Succession Plan

Through the succession planning process, you’ll evaluate the future of your farm or ranch, review future goals and choose a successor, develop a buy/sell strategy and provide guidance for continuing the operation. If you need a farm succession plan, be sure to sit down with your chosen successor(s) to talk about the transition and how involved you will be after you move away from the helm. If you have a succession plan already in place, review it to see if it needs to be updated for reasons like changing/adding successors, a shift in strategy or a change in farm operations. 

1. Review (or Create) Your Marketing Plan

Marketing is a valuable tool for businesses that can help increase brand awareness, engagement and sales. It is important to narrow down your target audience and think about what you are providing that other farm operations cannot.

You may want to consider consulting your local agronomist to work through a marketing plan that would result in the best revenue for your farm. These questions can help you get started:

• What do you produce?
• Who is your target consumer? How will you reach them?
• Is there demand for what you are planning to produce?
• Why should a customer buy your product from you instead of someone else?
• What is the cost of farm production?

1. Analyze Your Strategy From Last Year

One of the best ways to plan for the future is to learn from the past. Consider these goals and objectives as you review what worked, what didn’t and where there’s room for improvement in your farm business plan:

• Measure your ROI and look for ways to increase it.
• Analyze your customer base and consider new areas of opportunity.
• Review your permits and licenses for any renewals or new ones needed in the coming year.
• Take an inventory of all machinery and equipment and identify any maintenance or repair needs.

Review Your Coverage

The new year is a great time to ensure you have insurance that meets your needs. Whether your operation is a small, family-run affair or a commercial one, Farm Bureau insurance offers customizable, comprehensive and smart protection. Talk to your local Farm Bureau agent about how to protect your livelihood and what matters most to you.