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Top 10 “To Do” Items for Your Farm Business This Year

January is always a good time to “start fresh”, tackle farm business projects we have been putting off, and plan for the year ahead.

Here are 10 Things to do for your business this year:

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1.  Review your will (or get one!)

Of course no one wants to think about their death, but having a will is critical in protecting the future of your business and your family. Who will take care of things if you should pass? Will the business be passed on to others or sold ?
If you already have a will, when was the last time you reviewed it? Have things in your life changed and is your will up to date with all your current assets ?

2.  Review insurance policies

Another task that can easily be put off. This may include health, life, or farm insurance.   Likely it will only take a few minutes of your time, but it is time well spent should something ever happen to you or your farm!

3.  Review your payables/receivables

This is the first step in preparing your yearly budget. Take the time to go through your bills, loan statements and other accounts to make sure you know what you owe and of course what is owed to YOU !

4.  Finish up year end financials (if your year end is Dec. 31st !)

Congratulations to you if you happen to be one of the few people who have all their year end financials in order!   If not get busy and get them cleared up so you can start the year fresh, knowing your books are up to date .

5.  Do production plans for the coming year

This will vary a bit, depending on what you produce. It may include grazing, crop, breeding or forage plans.

6.  Prepare a financial budget

I know you all just groaned to your selves at this one. Preparing a budget can seem overwhelming but it can be quite simple if you have the right tools.    If you need some help with this one don’t be afraid to ask for support !

7.  Figure out every business members goals for the coming year

Sometimes we get so busy thinking about the future of the business that we can forget to check in with the family and co-workers to hear what their own goals, plans and challenges are. As we start a New Year, why not sit down and listen to the needs of the people within the business!

8.  Set goals for your business

Slightly different than our personal goals, these are goals for the business as a whole. Are their changes you want to make, targets you want to hit in regard to production or finances?   How will you do that?

9.  Figure out your cost of production

Do you know how much profit you are making for every unit produced? How much is that cow really making you, or how much are you profiting from the bushel of wheat?

10.  Take a vacation!

No kidding. No one can work ALL the time and stay happy and healthy. Everyone needs to re-charge so we can operate through those busy months with energy and enthusiasm. Even just a weekend get away, or a night a week doing something you love can make all the difference to the success of your business.

This may seem like a lengthy list, and you probably won’t achieve all of these things overnight.  Over time though, remembering to have these key elements of our business in order will support us in creating a successful future.

All the best to you in the coming year!

Jen

 

The Benefits and Risks of Different Legal Structures for Your Family Farm

If you’ve ever wanted a simple explanation of the basic legal structures for a family farm, look no further. In under 5 minutes, Tracy Hanson, lawyer at Walsh LLP in Calgary, expertly explains and discusses the benefits and risks of sole proprietorships, partnerships, and corporations for a farm business.

Sole Proprietorship

This is when a person owes the farm business and controlles the assets. All of the income and expenses remain with the individual. From a risk perspective, if there are financial problems with the farm business, this will affect the assets that the individual owns.
Partnership 

A partnership is a separate entity for all purposes but income tax. A partnership is a relationship that exists between two or more people. The risk associated with a partnership is that the partners are liable for the partnership debts. The benefit of a partnership can come from the perspective of some tax and succession planning.
Incorporation 

Incorporating your farm business provides the greatest amount of risk protection. With incorporation, the assets are separate from ownership of the farm business. The incorporated farm is a separate entity, which carries on the business and carries the business risk. As a shareholder of the business, you are not liable for the debts of the company itself. However, from a financial perspective, financial institutions will require a personal guarantee by the shareholder so it doesn’t necessarily move financial risk away from the shareholders.

The best structure for your  farm business depends on what stage the business is at and succession planning.
For further information on legal organizational structures and the benefits and risks associated with them, please refer to the following:

Legal Organizational Structure by Agricultural Marketing Resource Center

So You Want to be a Farmer? (p.17-19) by Canadian Farm Business Management Council

This workshop was funded in part by the Agriculture & Food Council of Alberta

 

Managing the Legal Risks in Your Farm Operation

‘Legal & Organizational Risk’ is one of the ‘5 Pillars of Risk Management’, as explained by expert Reg Shandro.  It’s an area that many of us avoid but you don’t have to be a lawyer to understand its importance.

What risks exist within the legal structure of your farm? One of the most important risks to look at, in terms of legal risks, is safeguarding your assets. Get legal help to learn what you can do to protect your farm business assets.

For further resources, please read the information below or in the “download” section on the right of your screen:

Legal Organizational Structure for Your Farm Business
This workshop was funded in part by the Agriculture & Food Council of Alberta

 

Breaking Down the Cost of Production on Your Farm Operation

Kent Plosz teaches us how to calculate the cost of production on your farm operation.

The number one thing that farmers really need to consider is the cost of production. If you don’t know your cost of production, how can you answer fundamental questions about your farming operation?

Do you really know the cost of production on your farm operation?You have to know if your farming business is making money, or how can you continue to farm? If you’re not making any money from farming, this is a very important thing to know because there could be things you could change to ensure you do make money as a farmer.

This workshop was funded in part by the Agriculture & Food Council of Alberta

 

 

Farming Isn’t Always About Owning the Land

Farming isn’t a question of owning farm land. Instead, it’s a question of being in the business of farming. There are many available opportunities for getting into the business of farming but you have to make sure you’re heart is in the business. If you’re heart is in farming, the rest will work itself out.

Watch Fred Mertzfrom Farming for Freedom, discusses how you don’t have to always own the land you work on to be a farmer.

This workshop was funded in part by the Agriculture & Food Council of Alberta