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A presentation by Lee Melvill, P.Ag. Farm Marketing Advisor at Meyers Norris Penny, on succession planning and discovering what the next generation needs to take over your business/farm. For more information on succession planning view other presentations by Meyers Norris Penny or go to www.edalliance.ca
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What does the next Generationneed to know about to take over?
Lee Melvill, P.Ag.
Farm Marketing Advisor
403-376-0419
Brooks
First and Foremost I believe. . .
Farms and Ranches arebusinesses!
What Is a Farm or Ranch? . . . .
Prairie Farm & Ranch Situation
across all operation sizeswith similar markets,
with similar gov't policies and
with similar weather
some operations will "succeed",
some will be marginal
some will fail
Why?
Because there are no guarantees for successluck sometimes a big help
Prairie Farm & Ranch Situation
But . . . . . . . .
There are ways to significantly improve probability
of "success".
To be "successful", farms and ranches need to be
run like any other "business".
What Is a Farm or Ranch? . . . .
Farm/Ranch Business
Production
Management
Business
Management
Human
Resource
Management
What Is a Farm or Ranch Business? . . . .
Crop variety choice
Spraying
Machinery Repair
Harvesting
Choosing Bulls
Picking Replacements
Calving management
Livestock health management & treatment
Keeping comprehensive production records
We're pretty good at this but THERE ISALWAYS ROOM FOR IMPROVEMENT
Production Management
What Is a Farm or Ranch? . . . .
Business Management
(Pencil Farming)
Financial
Management
Marketing
Management
What Is a Farm or Ranch Business? . . . .
Identify, Set & Record Personal, Family & Farm Goals
Understand & Use a Historic Income Statement
Understand & Use a Historic Balance Sheet
Create an Annual Income & Expense Projection
Develope a Cash Flow Projection
Manage Actual Cash Flow & compare to projection
Develope & Use Enterprise Budgets
Develope & Use Partial Budgets
Develop & Use Break-even Costs of Production
Astute Financial Management
What Is a Farm or Ranch Business? . . . .
Manage Capital Investments
Manage Production & Financial Risk
Keep comprehensive financial records
not just for tax reasons
Fully understand the financial implications of ourpersonal spending decisions
Astute Financial Management
What Is a Farm or Ranch Business? . . . .
Producing what the market wants
Calculating Your Per-Unit Cost of Production
Use your COP to set Farm Target Prices
Managing Price Risk
understand contracting alternatives?
understand futures market?
understand basis?
Knowing for certain the quality of your products
Understanding & Using Quality Market Information
Astute Marketing Management
What Is a Farm or Ranch Business? . . . .
Developing & Using a (Written) Marketing Plan
Profit-based, not price-based marketing
Astute Marketing Management
What's New in Farm/Ranch Marketing?
Ag commodity marketing using the Internet hasn'ttaken off!
Much more price volatility over the past 5 to 10 yearsfunds - trend-following and commodity index
Much more market info available than even 5 yearsago.
More Price Info
Better Market Analysis - what's happening and why and whatwill it take to change it.
More Market Outlook
Better Researched Strategies
Market advisory services more readily availablenot all will succeed
What do I need to think about?
Do I want a life-style operation?
Need to have little or no debt & have cash forre-investment - replacement and/or expansion.
Do I want a business-style operation?
Need to believe re-investment is important.Complacency leads to risk of obsolescence
Need to believe in life-long learningTo improve production, business management & humanresource skills
Need to take time for personal development (hobbies)and family.
Lee Melvill, P.Ag.
Farm Marketing Advisor
403-376-0419
Brooks
Questions & Discussion . . . . .
