How adept are you at analysing your horticultural business and understanding what drives profit?  Before I joined the horticulture team at Planfarm, I thought I had a pretty good handle on economic principles, how farm businesses operated, and what made them succeed.

I studied agricultural economics at university as an undergraduate and also completed post-graduate studies.  I have worked in the field and been involved in running a family farming business for 20 + years, actively involved in the business’s financial side. However, it wasn’t until entering the world of Planfarm that I quickly realised how much about farm business profitability and business management there was that I didn’t know, and more importantly that I wasn’t analysing and continually monitoring.

The first resource I was directed to within Planfarm to bring me up to speed was their online and interactive learning tool Planfarm Academy, “The Business of Farming”.  This set of video modules with accompanying worksheets was the missing link between applying the academic economic principles I had gained at university and the on-ground day-to-day running of a horticultural business. It provided the perfect balance between what I thought I should be analysing and basing decisions on, and providing the tools in the toolkit to set about seeing how my business measured up and how everyday decisions and behaviour, small or large, affect your bottom line and the growth of your business over time.

Passion grows crops, Business grows the future

It’s a bit of a contradiction, but in order to look forward and plan for the future of your business,  sometimes we have to look backwards.  To make sound business decisions that will influence a company’s short, medium and long-term outcomes, we need to reflect on what we have done and base our future planning on our historical performance.

In the Business of Horticulture series, participants are guided through how to analyse their farm’s historical data so that they can make sound and informed decisions about the future of their business.  Our team of consultants covers various topics and explain why some aspects of financial performance can be extremely limiting, such as cash flow, and how these can influence what scope your business has to grow, access funds, diversify and purchase plant and machinery.

One element that I found that I hadn’t placed a great deal of emphasis on when looking at my business regularly was making the distinction between cash flow, profit and balance sheet.  I was basing purchasing decisions purely on cash flow and not stopping to consider the profit or balance sheet implications around investments. This was a short-term view of the business. The learnings from Planfarm Academy highlighted that knowing your numbers and finding that sweet spot between short-term cashflow impacts and long-term growth implications is vital.

Silver linings, not silver bullets

If farming had a ‘get rich quick’ solution, everybody would do it. While there are no silver bullets or magical formulas for making a motser out of growing horticultural crops, the learnings and formulas outlined in the Business of Horticulture learning program do provide sound guidance or goal posts for a horticultural business to aim for in order to achieve long-term success.

The key performance ratios that Planfarm has developed through many years of working with farming clients have been cleverly adapted to horticultural businesses, taking into account the dynamics of different intensities and levels of mechanisation of horticultural growing.  These ratios are designed to assist you in setting internal targets to aim for within your business and start benchmarking against yourself year in and year out.

Like most things in life, your business is a work in progress, and for this, you are playing the long game. You must continuously adapt to a changing environment, market forces, compliance, inflation, IR laws and government policies. Having a clear plan ahead of you and having those around you invested in the same vision and shared values will help your business withstand change and external volatility.

Uncertainty and unease go hand in hand. It will help smooth out internal volatility if you plan early and communicate well on matters like succession and transition with staff and family members. Give them the roadmap and bring them along for the journey.

Football analogy

At Planfarm we use a few football analogies such as operating efficiency being the mid-field of your team and balance sheet acting as the backline of your business. Apologies to those of you who don’t dig football, but go with me here. It’s worthwhile reflecting on your own business and allocating playing positions to those within your company: captain, key forwards and wings. And don’t stop with the players, consider the roles in the rest of the club.  Who is filling the role of coach, the board, the social committee, and the members?

Having a visual in your head of the role that your accountant, bank, staff and partners play in your business can assist you with identifying what your key role is, and what the key drivers are in your business to get you all playing on the same field and striving towards success not just for each crop, but year in, year out, and for future generations.

Academy training starts soon

In keeping with the football analogy, several sprint training sessions will be running in 2025. Up to three live rounds will be run, which are 6 weeks in duration with webinars and face-to-face workshops. There will also be the option to sign up for self-paced learning, and through this, you will have access to webinar recordings and the training modules for life.

If you would like to know more about the program, get in touch for a chat with Steff (click on the blurred out email address) st***@pl******.au or call 0428 712 852.