Rural Affairs
Issue No. 10 - April/May 2003
Farming to Win
by David Heinjus
As farm sizes grow, many businesses are being faced with new and complex management challenges. These challenges include employment, managing growth and compliance issues. To deal with these issues, farmers are taking time off from working in the business, to work on the business. Those farmers who are continually working in the business may actually be missing a major opportunity to work smarter.
2002 was a very challenging year for some of our clients. Some only received 50mm of rain between April and October (the main growing season) where normal rainfall would have been more than 200mm. Income variations between 2001 and 2002 have also been huge. In 2001, one client delivered $1.2 million worth of grain and wool and achieved a return on capital of 31%-an absolutely fabulous result. In 2002, however turnover has been reduced to $100,000 and return on capital was negative 17%-an absolutely dreadful result, but the client still achieved an average return on capital of 13% over the last 3 years. (Try managing this cashflow!)
These farm business owners know exactly how they are performing because of benchmarking, and participation in a farm management and business development program called Breakthrough System®.
Increasingly professional farmers are participating in programs like Breakthrough System® so they can manage risk, improve personal confidence and improve their business and its bottom line. These producers are part of a group of like-minded farm...
