Beginning the Planning Process
The beginning of the planning process is often perceived as a “touchy–feely” sort of thing that most farmers hesitate to become involved in. However it’s a very important step towards making a plan work and people need to get over their hesitations, take a deep breath and work through this process. A number of farmers have commented to me at the end of their plan that while they were reluctant to start their Plan with this “Fuzzy” stuff, on reflection it was one of the most valuable parts of the whole exercise for them.
Put simply, Planning is a process of working out in advance what you intend to do.
The importance of having a business plan was highlighted in the inaugural edition of the Price Waterhouse Business Barometer (May, 2007). The report is based on a survey of 750 businesses with turnover in the range $10 million to $100 million. In respect of business planning the report noted: “A sizeable minority (40 percent) had no formal business plan and most employed an ad-hoc approach to managing information technology. Those businesses that did use a formal business plan set more realistic short and medium-term targets and achieved better sales and profits than those that did not.”
In an on-going farm management situation, planning can be either tactical planning on a seasonal basis or day-to-day planning, otherwise described as operational planning. However, both these levels of planning are controlled by primary strategic planning, otherwise known as long term planning.
In my experience, farmers generally plan long term and much of their thinking in regard to their property is intergenerational. Most farmers subscribe to the philosophy that they want to pass on their farm to the next generation in a better condition than they received it. It is this long term strategy which drives much of their shorter term decision making.
Unfortunately it’s often hard to think long term when you are under immediate pressure from creditors or your bank manager to face immediate issues. People in the conservation movement have an apt saying that: “It’s hard to be green when you’re in the red!!”
Most land resource-related decisions are longer term in nature; matters such as changes of land use from stock to cropping or from dairying to horticulture are major planning decisions that affect your lives for a long time. Getting this change process right is a matter of good strategic planning although often short term operational or tactical planning can have a disproportionate impact on longer term strategy, particularly where aspects of the land resource are in delicate balance. An example of this would be the clearing of vegetative cover for a crop at the start of a recognised drought cycle, where your short-term need is for extra feed for your stock, but you run the real risk that baring the land may accelerate the risk of wind erosion, which would run counter to your long-term strategy of protecting your land against loss of your topsoil asset.
Planning is more a cyclical process than just a straight line from vision to outcome. Planning is also a process that needs to be regularly revisited and fine-tuned in the same way that you drive a car. You need to “keep your hand on the wheel” of management and be prepared to make those continuous small changes which cumulatively keep your farm vehicle “on the road” rather than heading off into the scrub or over a cliff.
I know that farmers often find this strategic planning stuff hard to talk about with others and many would prefer to hand-crutch a thousand ewes than stop to think about these sorts of things, let alone discuss them with the rest of the family. I recall the story of a rich and successful businessman who was travelling through the Australian Outback when he realised that he didn’t quite know where he was. He saw a local farmer, doing some fence repairs and pulled up in his late model Mercedes and said politely, “I say, old chap, you couldn’t tell me how far it is to Bourke along this road?” “Nope” replied the farmer. “Well then, how far am I from Dubbo?” the businessman asked. “Don’t know!” said the farmer. “You’re not a very bright chap then, are you?” the exasperated businessman said. “Nope,” the farmer commented, “but then again, I ain’t lost!!” Once you can see the need for good farm planning, then you can easily understand the value of good information. However, like most processes of change, the first step is generally the hardest.
You also need to ensure that all the key players are involved in this initial planning process. I can recall some families that I have dealt with over the years who have a very strong family bond and healthy relationships where, when I arrived to start the farm planning process with a discussions on values, aims and objectives, I was confronted by the whole family, not just the person in the leadership role, but his wife and two children, his brother and his wife and two further children and both sets of grandparents as well. Luckily they had a very large dining room table because everyone was treated with respect and had equal say on the future direction of the farm. They all listened to everyone’s views and contributed to the Farm Plan. It was an initially daunting but eventually very interesting, few hours for me, trying to strike a middle course between a whole range of views of their future. However, I’m sure this situation is not the norm, but I tend to ensure that, if possible, the whole immediate family is involved in this discussion as its outcomes often affect the direction of everyone’s lives.
The First Step
The first step of the cycle is to describe where do you want to go with your farm. This is known as your Vision for your property. Many people get confused over the difference between Vision and Mission. Vision is about foresight and the future whereas mission is about tasks and what we need to do today to move us towards the long range vision.
Your Vision is your statement of the situation you want to create in the future. Your vision might be, for instance: “My vision for my farm is that it will give me and my family a reasonable standard of living in a healthy environment. I want to be independent, but part of a vibrant and sustainable rural community. I want to hand the farm on to my children in better order than when I took it over.” Sorting out your vision is very personal to you and is hard to do. Often there are complications of partnerships to deal with which require a shared vision. Talking openly and honestly with your partner is vital to a successful partnership whether it is just in business or in life. Some people might find it easier to draw their vision, particularly if they prefer to work with pictures rather than words. That’s fine because in the end, it’s your plan and should be expressed in ways that you can relate to. I know that I think graphically rather than in words and tend to use pictures as my preferred communication method.
Your vision for your farm results from both your purpose in farming and your personal values. Your purpose in farming is your answer to the question “What am I in farming to do?” Are you in farming for the lifestyle or do you want to succeed in running a profitable business? Are you there because you like the outdoor life or because you were born into it and know nothing else? Answer these two Questions;
- Do I want to be involved in farming?
- What am I wanting to do in farming?
If your answer to the first question is yes then your answer to the second question could include: to make money; to improve the farm asset; to heal the land and/or farm it more sustainably; to be a part of the rural community. It’s important to write these things down if only to commit to your answer. You don’t necessarily have to show your answers to any of these exercises to anyone else but you do need to be honest with yourself with your answers. Please think carefully about these two questions and write your responses on a piece of paper that can be stored in your Farm plan Folder.
Why write it down?
Forward planning uses the frontal lobe of the brain which is situated directly behind your forehead. The frontal lobe sends instructions to other parts of your brain to develope ideas and tasks that will assist your forward planning to become a reality. It may take some time for the ideas to develop but it is a relatively easy task for the brain which is a phenomenal multi-tasking organ.
Identify your Values.
Your values are those principles that you wish to apply to both your life and to your farm. They generally describe how you want to operate from day to day as you pursue your vision for your farm.
It is often useful to undertake a values assessment before finalising your vision for your farm. The Values Questionaire shown below can be helpful in compiling a list of those values that are important to you. You will also find it useful to discuss this list with your partner(s) and family before finalising on your values priorities. Also remember that not everyone is going to have the same motivations as you.
A successful planning process will allow for the delineation of different views and for merging of different values into a final plan, provided that people are prepared to be inclusive and find the middle ground using the planning framework. There are over forty different values listed here which could be important to you. It’s not an exhaustive list. You may also have other values that are important to you but are not listed here. Please tick the five values that you consider most important to you. These should also be saved to your farm Plan.
Your final values list will help you decide your planning direction. For example, if you value economic security, financial gain and stability highly, then you will need to develop a high return enterprise on your farm to meet these values. If you place most importance on working with others to promote ecological awareness and natural values, then your plan will need to focus on a different direction. Once you have decided on the values that drive your farming, you should be able to write down (or draw) your vision for your property. Your vision statement should be saved to your Farm Plan. I also encourage you to place your Vision Statement in a place where you will be able to regularly read it. Writing a Vision Statement is relatively easy … making it a reality is much harder and requires persistence and daily application.
If you can clearly enunciate your vision for your property, then you will find that your partner(s), your family, your bank manager and most of the other key people in your business will easily buy into and share your vision. It just requires some effort on your part to “break the ice”, clearly explain your motivation and initiate this part of the planning process.
