SMARTCANE BMP REGISTRATION
Business Information
Business Name: Contact Name: Phone: Email: Address:Locality / Town / City: Post Code:
State:
Farm Information
Farm 1 Name:Farm 1 Lot Plans: Farm 2 Name: Farm 2 Lot Plans: Farm 3 Name: Farm 3 Lot Plans: Farm 4 Name:
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
Practices:
Below Industry Standard
Business planning is not a normal part of the farming operation.
Industry Standard Family members are involved in open discussions about plans for the business’ future
Above Industry Standard
Time is set aside for formal business planning and the plans are documented and reviewed.
5.1.2
Goals And Actions
Practices:
Below Industry Standard
Specific goals are not set for the business
Industry Standard Goals are informally discussed and actions are taken to achieve these goals.
Above Industry Standard
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
Practices:
Below Industry Standard
No description of the natural resources is available.
Industry Standard Natural resources are known and recorded on third-party documents (e.g. mill map).
Above Industry Standard
Natural resources, infrastructure and farm layout are documented and used to assist with planning and communication.
5.2.2
Describing The Financial Resources
Practices:
Below Industry Standard
Financial records are kept for accounting (e.g. taxation) purposes alone.
Industry Standard Financial records are kept and used to monitor income and expenses throughout the year and for the production of financial statements.
Above Industry Standard
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
Practices:
Below Industry Standard
Skills are not assessed and training opportunities are rarely taken up.
Industry Standard Skills are assessed and training opportunities are frequently taken up on a range of production, safety, business and personal topics.
Above Industry Standard
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
Practices:
Below Industry Standard
Business strengths and weaknesses, opportunities and threats are not considered when making decisions. Industry Standard Business strengths and weaknesses, opportunities and
threats are generally known and considered when making decisions.
Above Industry Standard
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
Practices:
Below Industry Standard
No budgets are prepared for the farm business other than to help determine overdraft arrangements.
Industry Standard 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. Above Industry
Standard
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
Practices:
Below Industry Standard
Productivity data is not reviewed.
Industry Standard Productivity data is used to assess performance against other mill suppliers and district averages (e.g. t/ha, t/ML). Above Industry
Standard
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. NA
5.4.2
Monitoring Financial Performance
Indicators Practices:
Below Industry Standard
Farm financial performance is not monitored.
Industry Standard 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.
Above Industry Standard
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
Practices:
Below Industry Standard
Some adult family members have wills.
Industry Standard All adult family members and business partners have up-to-date wills and Enduring Power of Attorney arrangements in place.
Above Industry Standard
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
Practices:
Below Industry Standard
No succession plan is in place.
Industry Standard Family members have an informal understanding of the transitional plans for management and ownership of the farm asset.
Above Industry Standard
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
Practices:
Below Industry Standard
No retirement plan is in place.
Industry Standard Superannuation or other off-farm investments are in place to fund a desired retirement lifestyle.
Above Industry Standard
A comprehensive retirement plan is developed and reviewed in conjunction with the succession plan.
Key Area: Risk Management
5.6.1
Assessing risk
Practices:
Below Industry Standard
Risks are not assessed.
Industry Standard Risks are assessed and basic insurance provisions are in place to protect the business.
Above Industry Standard
Risks are assessed and a risk management plan is in place to avert, minimise or insure against perceived risks
5.6.2
Managing personal risk
Practices:
Below Industry Standard
No provisions are in place for the survival of the business if key personnel die or are incapacitated.
Industry Standard Basic provisions (e.g. insurance) are in place to provide short-term financial relief if key personnel die or are incapacitated.
Above Industry Standard
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
Practices:
Below Industry Standard
Farming practice remains the same regardless of seasonal changes and the availability of new technology or
information.
Industry Standard Farming practice is adapted to suit prevailing conditions and new information and new technologies are considered and adopted if applicable.
Above Industry Standard
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
Practices:
Below Industry Standard
Environmental risk is rarely considered when making farming decisions
Industry Standard Long range weather forecasting and the potential for resource degradation are considered when making farming decisions.
Above Industry Standard
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
Practices:
Below Industry Standard
Farming practice remains the same regardless of input price changes or fluctuations in price of sugar.
Industry Standard Farming practice changes are considered in response to changes to costs and returns.
Above Industry Standard
Forward pricing offers are assessed according to their ability to minimise price risk and cover the cost of production. NA
5.6.6
Managing business debt
Practices:
Below Industry Standard
Debt structure is not reviewed.
Industry Standard The debt structure is reviewed annually at a meeting with financier.
Above Industry Standard
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. NA
