When you’re a business person farming you know that you’re not in a riskless business. Risk is a four letter word but there are many things that can assist you in managing these risks.
There are 5 pillars of risk which you need to understand in order to successfully manage your farm business. You need to be able to understand them both separately and together. The 5 Pillars of risk on your farm are:
1. Market Risk;
2. Legal Risk;
3. Human Resource Risk;
4. Financial Risk; and
5. Production Risk
Warren Buffet once said that when making a decision with regards to your business, you shouldn’t be asking yourself how much money you can make, but instead you should ask how much money you can lose. This change in mindset is important when evaluating the risk on your farm business.
This is an introduction video for the “5 Pillars of Risk Management”series. Watch Reg Shandro explain what risk management is and what you can do to minimize risk in your agricultural business.
For further introductory notes, please refer to the following resources: