SMARTCANE BMP REGISTRATION Business Name: Business Information Contact Name: Phone: Email: Address: Locality / Town / City: Post Code: State: Farm 1 Name: Farm Information Farm 1 Lot Plans: Farm 2 Name: Farm 2 Lot Plans: Farm 3 Name: Farm 3 Lot Plans: Farm 4 Name: Farm 4 Lot Plans: Others:
Farm Business Management Introduction Farm business management is more than keeping the books, it is an ongoing process that involves decision making, managing change, achieving goals, limiting risk and communicating ideas. In this module you will be assessing your level of practice in the areas of business planning, succession planning, risk management and legal awareness. Documenting the farm management decisions and plans you make can help communicate with your financier, accountant, production advisors and family members. A comprehensive business plan will include information collected throughout this Farm Business Management module. Key Area: Planning: Part A - Your Farm Business Entity 5.1.1 Developing And Communicating A Plan For The Business Business planning is not a normal part of the farming operation. Industry Family members are involved in open discussions about plans for the business future Time is set aside for formal business planning and the plans are documented and reviewed.
5.1.2 Goals And Actions Industry Specific goals are not set for the business Goals are informally discussed and actions are taken to achieve these goals. Specific goals and action plans are set for the business and for individual family members or business partners
Key Area: Business Planning: Part B - Situation Analysis 5.2.1 Describing The Natural Resource No description of the natural resources is available. Industry Natural resources are known and recorded on third-party documents (e.g. mill map). Natural resources, infrastructure and farm layout are documented and used to assist with planning and communication.
5.2.2 Describing The Financial Resources Industry Financial records are kept for accounting (e.g. taxation) purposes alone. Financial records are kept and used to monitor income and expenses throughout the year and for the production of financial statements. Financial records specific to each enterprise are kept and used for business decision making, and to assess the contribution of enterprises to whole farm profit.
5.2.3 Describing Human Resources Industry Skills are not assessed and training opportunities are rarely taken up. Skills are assessed and training opportunities are frequently taken up on a range of production, safety, business and personal topics. Skills are assessed and training opportunities are sought for all family members and employees, according to priority. Where possible, more than one person from the business attends most training activities.
5.2.4 Strengths, Weaknesses, Opportunities And Threats Industry Business strengths and weaknesses, opportunities and threats are not considered when making decisions. Business strengths and weaknesses, opportunities and threats are generally known and considered when making decisions. Business strengths and weaknesses, opportunities and threats are documented and used to identify options for change.
Key Area: Business Planning: Part C - Assessing Options for Change 5.3.1 Analysing Options No budgets are prepared for the farm business other than to help determine overdraft arrangements. Industry Whole farm profit budget and cash flow budgets (usually based on last year s costs) are prepared annually and can be used to determine expected farm profit and borrowing requirements. Farm profit and cash flow budgets are prepared, at least for the coming year, using zero-based budgeting to forecast whole farm and enterprise profit, and to determine the profitability and affordability of implementing a change e.g. a new production system.
Key Area: Business Planning: Part D - Monitoring And Evaluation 5.4.1 Monitoring Productivity Productivity data is not reviewed. Industry Productivity data is used to assess performance against other mill suppliers and district averages (e.g. t/ha, t/ml). Steps are taken to determine why productivity may be different to that of other mill suppliers and to identify opportunities to improve productivity within your environmental, personal and financial constraints.
5.4.2 Monitoring Financial Performance Indicators Industry Farm financial performance is not monitored. The financial statement prepared for taxation purposes is used to compare farm financial performance, such as equity, profit, return on investment and debt servicing capacity, with the business performance in previous years. Enterprise specific performance indicators, such as $/ha and $/ML water, are calculated and used to identify opportunities to improve farm productivity or profitability.
Key Area: Succession planning 5.5.1 Wills and Enduring Power of Attorney Some adult family members have wills. Industry All adult family members and business partners have up-todate wills and Enduring Power of Attorney arrangements in place. Beneficiaries are aware of provisions that will significantly affect their life choices (e.g. the disposal of land and other major assets).
5.5.2 Succession planning Industry No succession plan is in place. Family members have an informal understanding of the transitional plans for management and ownership of the farm asset. Family members have participated in discussions, possibly with a succession planning professional, to develop clear arrangements for the transition of management and ownership of the farm asset to the next generation.
5.5.3 Retirement planning Industry No retirement plan is in place. Superannuation or other off-farm investments are in place to fund a desired retirement lifestyle. A comprehensive retirement plan is developed and reviewed in conjunction with the succession plan.
Key Area: Risk Management 5.6.1 Assessing risk Risks are not assessed. Industry Risks are assessed and basic insurance provisions are in place to protect the business. Risks are assessed and a risk management plan is in place to avert, minimise or insure against perceived risks associated with current and planned farming activities.
5.6.2 Managing personal risk Industry No provisions are in place for the survival of the business if key personnel die or are incapacitated. Basic provisions (e.g. insurance) are in place to provide short-term financial relief if key personnel die or are incapacitated. A variety of provisions are in place for all income earners in the case of death or incapacity (e.g. life and permanent injury insurance, superannuation with income protection, substantial off-farm investment).
5.6.3 Managing production risks Industry Farming practice remains the same regardless of seasonal changes and the availability of new technology or information. Farming practice is adapted to suit prevailing conditions and new information and new technologies are considered and adopted if applicable. A risk management plan or protocol is used to avert, minimise or insure against production risks associated with current and planned farming activities.
5.6.4 Managing environmental risks Industry Environmental risk is rarely considered when making farming decisions Long range weather forecasting and the potential for resource degradation are considered when making farming decisions. A risk management plan or protocol is used to avert, minimise or insure against production risks associated with current and planned farming activities.
5.6.5 Managing financial risks Industry Farming practice remains the same regardless of input price changes or fluctuations in price of sugar. Farming practice changes are considered in response to changes to costs and returns. Forward pricing offers are assessed according to their ability to minimise price risk and cover the cost of production.
5.6.6 Managing business debt Industry Debt structure is not reviewed. The debt structure is reviewed annually at a meeting with financier. Steps are taken to minimise the risk margin and obtain the best debt structure, interest rates and loan terms by providing detailed evidence of the affordability and profitability of the business and the project being funded.