When it comes to resources on our farm, time and money are two incredibly valuable things, but they’re limited. Everyone gets the same amount of hours in a day – no human can do anything to change that fact. The farm’s bank account contains a certain amount of money, which of course is impacted by how much comes in and how much goes out.
On the farm, we could spend what’s been entrusted to us in many different ways. One thing is for sure: the ways in which we choose to spend our time and money within our operation affects our farm’s success.
A closer look
Sometimes it isn’t clear whether a particular decision will impact the operation in a positive or negative way overall – but we do know that there will be an impact. Being intentional in working to be a good steward of the limited resources of our time and money is clearly important.
With this in mind, I have a couple ‘New Year’ questions that can help you take a closer look at your investments of time and money in your operation. The big question is: What do you need to say ‘yes’ to in 2017? Along with that question comes another: What do you need to say ‘no’ to?
One area of your business where it’s critical to ask these questions is in making major decisions. This is the ‘money’ side of the equation. Where are you going to invest the farm’s dollars to achieve the vision and success that you want? And why will you choose to direct those dollars toward a particular purchase or decision versus another?
Since every farm’s situation is unique, there are multiple variables to consider when an opportunity comes up. Consider how your operation is currently evaluating new opportunities – land, equipment purchases, and other decisions that require a capital investment.
Sometimes an opportunity can look really good on the surface or on paper. But after analyzing it more closely, in light of the farm’s current situation, the farm leader may decide it’s not right at that time. Equally important to keep in mind is that when you say ‘yes’ to a particular opportunity, you’re also saying ‘no’ to the chance to invest in other future opportunities, because those dollars have already been earmarked.
Farmers have found it helpful to have an ag finance advisor create a feasibility study for them about a new opportunity. The study looks at how the purchase or opportunity will impact the farm’s overall financial situation.
Also, it can be useful to create and use a unique process for how major decisions are made. Having and using an outlined process helps decision-making stay in alignment with the farm’s overall vision. It can also potentially speed up the length of time it takes to make a decision.
Next week, I’ll discuss how you can take a closer look at where you’re choosing to spend your time, as the farm’s leader, and what you may want to say ‘yes’ and ‘no’ to in 2017.
In the meantime, you can read the new winter issue of the Smart Series publication, bringing business ideas for today’s farm leader. This issue features tips on harnessing the power of your farm’s numbers, how to set up an employee strategy, and ideas on shielding your farm from unexpected events. Get your free online issue here.
The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.