Farm Analysis
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What is Farm Analysis?
Farm Analysis is about clearly seeing where the business and the property are currently. This gives you a benchmark for future comparison and a measure of the needed improvements..
Try to quantify each aspect. A qualitative statement can be misleading when someone else is trying to evaluate the results later – “good” for you will be different for them. Define and use a 1 to 9 scale if the value is qualitative.
Add a description if the value needs further explanation.
Table of Contents
The Farm as a Business
The primary strategic goal is to grow the business to maturity.
Why benchmark?
Once you have completed a thorough evaluation of the business and the property, record the results for comparison next month, next year, in five years.
You can only manage what you have measured.
Make it complete because your questions in the future will be different to those you have now. The lack of data can be frustrating as well as costly due to lost opportunity.
Benchmark KPIs and Metrics
Generally speaking a Key Performance Indicator (KPI) is a ratio and a Metric is a quantity. For example, cost per kilogram is a KPI and kilograms produced is a Metric.
Every business needs different measurements to capture a snapshot of its performance. Because a KPI is a ratio, it is independent of volume. When charted over time, it provides a very useful view of a trend toward or away from efficiency. Try not to duplicate your values – i.e. cost per kilogram produced vs kilograms produced per dollar – different measures but you will rarely need both.
I had an uncle who managed a large motel. He noticed a change in the ratio of meat purchased each month over the number of guests each month which led him to discover that the staff were stealing his T-bone steaks. Ratios can be quite sensitive.
Benchmark Accounting Reports
Accounting Reports contain a mother lode of information. A comparison of the same report over time can illuminate many trends and changes.
They can engender management practices that make your business Clean, Efficient and Profitable.
Benchmark Business Performance
Business performance is a function of experience coupled with a knowledge of season and market forces. A chart of business performance KPIs coupled with a timeline of events can be very informative.
Benchmark Production Performance
Benchmark Marketing Performance
Benchmark Sales Performance
Do not schedule your lettuce or tomatoes all in high season when everyone else is trying to sell theirs.
Farm Benchmark SWOT Analysis
What is the State of the SOP?
Problems with the Land
Most properties have features that are less than optimum.
Some of these are amenable to change – a dam here, a road there, a shelter belt down that fence, some erosion in that creek etc. That rocky knob is less changeable, but with thought a great use can be discovered for it – maybe a tank to gravity feed water to the lower parts of the property.
List these to find solutions when doing the farm design.
The Management Team
Management Team SWOT Analysis
Resources
What resources are available? This will include things like:
- Knowledge and Experience
- Abilities of your staff
- Finance
- Stock on Hand
- Time Available to Work
Take Stock of Your Resources
Resources SWOT Analysis
Assess Individual Resources
It is important to understand and acknowledge the strengths and weaknesses of your people. This is not judgement. Placing someone in a position where they are not suited upsets the person, reduces their effectiveness and so, damages the business.
Include things like physical ability, mental capacity, knowledge, understanding, patience, skills and maturity in your evaluation. An orchestra needs a range of instruments just as a business needs a range of skills. You are the conductor.
Do not use a piccolo to make a BIG sound – that is what the trombone is for. Similarly, throwing people in the deep end is risky – it can damage them and the sub-par result will not help the business.
Some people just do not have the temperament to sit for hours in a tractor droning around and around a paddock. Others quite enjoy the thinking time it provides. Others are better at management, sales or administration. Each have differing levels of leadership ability.
There is a vast difference between a leader and a manager – Know your people.
Prior to devoting my time to Properly Organic and Designer Acres, I served as a contracted super tech in the bleeding edge of satellite imagery, business management and accounting software, then telecommunication software bringing SMS and Mobile Application Protocol into Australia. I then decided to return to the land. I quickly discovered that apart the shape of the bales and the colour of the tractors little had changed.