Manage Your Farm Business Through Times of Transition
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1 Manage Your Farm Business Through Times of Transition Bret Oelke Innovus Agra, LLC
2 Mission Statement: To search for and develop opportunities that allow our customers to achieve their goals
3 What do we mean by transition Definition of transition 1a : passage from one state, stage, subject, Source: or Merriam-Webster's place to another Learner's Dictionary : changeb : a movement, development, or evolution from one form, stage, or style to another Source: Merriam-Webster's Learner's Dictionary
4 Let s Talk About Transitions Stage of Career Changing economics Growth/retraction Type of business
5 Stage of Career Early career Labor, limited decision making Transition to management/ownership Responsibilities and investment increase Full management responsibility Primary decision maker Transition to retirement From manager to mentor
6 Changing Economics Pre-1996 Hangover from the 80 s Restrictive farm programs Freedom to Farm New risk management tools New risks Golden age Wild changes to prices and costs Current economic environment
7 Growth/retraction Is growth an option? Drivers of growth Changing environment, opportunities, technology Types of growth Expansion, adding value, addition of enterprises Reason for growth Add partners, challenge, revenue enhancement
8 Type of Business What do you do? Grower of commodities, high value production, specialty production What is your brand now? How you are seen by others What do you want it to be? How you want to be seen by others
9 Insert Slide Headline Here Definition of management 1 : the act or art of managing : the conducting or supervising of something (as a business) 2 : judicious use of means to accomplish an end Source: Merriam-Webster's Learner's Dictionary
10 Areas of Management Production Management Business/Financial Management Price/Margin Management People Management
11 Production Management This is most farmers and ranchers happy place Includes the production process, machinery operation, production decision making, optimization (maximizing) output There are many professionals that can provide valuable input here
12 Business/Financial Management Accessing and effectively utilizing capital Making investments in a thoughtful way Record Keeping For IRS, for your lenders, to make effective decisions Managing Costs Purchase of inputs, budgeting, benchmarking, enterprise accounting
13 Price/Margin Management Planning for marketing and risk management Market plan implementation Production contracts
14 People Management Managing your own time resource Hiring, developing and retaining quality team members Following the rules of government agencies
15 Management Overlap All of the management areas overlap to some degree Identify your areas of strength Identify your partners areas of strength Improve or outsource areas that are not strengths
16 Develop a Management System Planning is essential Plan implementation is critical Flexibility is important Review and improve plans regularly
17 Planning Each area of management needs plans Production plans Document your process and define how you make decisions Identify areas of flexibility Fertility, plant population, response to weather conditions
18 Planning Business plans Financing documentation Investment decision tools Cost of production/enterprise budgets Benchmark costs and returns to make effective decisions Communication plans
19 Planning Marketing plans Use enterprise budgets as a start Build in flexibility Utilize all of the tools you are comfortable with Get comfortable with all the tools! Employee management structure
20 Planning Employee management Hire team members not workers Know the rules so you don t get in trouble Don t get top heavy with full time labor We have had to reduce our full time labor over the last couple of years with some of the farms I work with
21 Philosophy, Fear, Failure Develop a set of management philosophies Identify your brand Mission, Vision How will you do business with others Will you have a customer service mindset Is your intent to be a low margin/high output producer Is selling value a option
22 Philosophy, Fear, Failure Manage your discomfort Don t be afraid to take intelligent/calculated risks Act like an owner even if you aren t one Be decisive remember it is not the big fish that eats the small fish, it is the fast fish that eats the slow fish
23 Philosophy, Fear, Failure If you don t ever fail, you are not taking enough risk Failure is not personal, it is a type of learning Become a mistake manager Think through the consequences of the decisions you make before you have to make them
24 Philosophy, Fear, Failure Don t suffer from sellers remorse It is not the lowest price or the highest price that you receive for your production that is important, it is the average price that matters. Remember that opinion is the lowest form of human knowledge, it requires no accountability
25 Philosophy, Fear, Failure Surround your self with people that are positive and supportive Stay out of the coffee shop Use others to act as a sounding board Learn from successful business inside and outside of production agriculture Even if they are your competitors!
26 Philosophy, Fear, Failure Be a relationship developer and a networker Take a sincere interest in people and find out what their needs and want are Learn to be a problem solver for your suppliers and buyers not a problem creator Don t get taken advantage of a second time
27 Philosophy, Fear, Failure
28 Thank You! Please take the time to thank the sponsors and the staff from Top Producer and Farm Journal Media for providing all of us with this opportunity to enhance and improve our skills. Bret Oelke Innovus Agra, LLC
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