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Introduction to the Human Resource Risk Pillar of Your Farm Business

This is an introduction video for the Human Resource pillar in the “5 Pillars of Risk Management” series. Of all the risks that are associated with the farm business, human resource risk is the most important. Studies have shown that at least 80% of businesses do not transfer because of a communication or conflict issues, therefore it’s essential for you to ensure you understand the human resource risks on your farm operation.

Though large corporations have human resource departments and realize that this is a much needed component of their business, farmers often go at it alone without any human resource background at all. From employee reviews to how to navigate your way through the growth of your farm business, having a human resource plan in place can be a very valuable asset.

Watch Reg Shandro explain what a human resource risk is and what you can do to minimize it on your farm operation.

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

Writing the Rules: Making Sure all Your Farm Business Partners are on the Same Page

One of the risks for a farming operation that is often overlooked is management and continuity of ownership. This is one of the reasons it is essential that whatever your business structure, you need to understand what the rules are.

Even if you’ve talked about it, and especially if you haven’t, writing down a partnership agreement or unanimous shareholders agreement, is a critical step for your farm business.

This will be a living document, meaning that as the farming business grows the document will evolve with it.

Don’t miss this important lesson from Tracy Hanson, Calgary lawyer, onthe importance of writing down the rules of your farm operation.
This workshop was funded in part by the Agriculture & Food Council of Alberta

 

Incorporated Farms and the Benefits of an Unanimous Shareholder Agreement

We hope D-Day will never come, but divorce, death and default can ruin any business if you’re not prepared with a solid unanimous shareholder agreement.

As with any business, there needs to be a plan for when certain events happen on your farm operation. If your farm is incorporated, it is prudent to also have a unanimous shareholder agreement in place. A unanimous shareholder agreement is intended to be the back-stop for the relationship between shareholders. In 99% of cases the agreement is never referred to but it sure is important to have when a problem arises.

Watch Tracy Hanson, Calgary lawyer, explain the benefits of having a unanimous shareholder agreement for incorporated farm operations.

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

 

 

Why You Need to Develop a Farm Marketing Plan

Marketing is an essential part of any successful farm business. Whether you’re selling a commodity or a retail product your marketing strategy starts with putting together a marketing plan.

A marketing plan helps you keep out emotions when you’re making decisions in your farm business. You need a plan so that you don’t get caught up in hype, and a farm marketing plan will go along way to ensuring you stay the steady course.

Watch Reg Shandro explain why it’s important to have a farm marketing plan on your farm business operation.

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

 

Take the first step in developing a farm marketing plan

 

5 Human Resource Components Putting Your Farm at Risk

This video accompanies the “Introduction to Human Resource Riskvideo for the human resource pillar in the “5 Pillars of Risk Management” series. Watch Reg Shandro explain the sources of human resource risk and what you can do to minimize them on your farm operation.
5 Sources of Human Resource Risk on Your Farm Operation

Communication: The lack of effective communication in your farm business is a huge hurdle to formalize. If you don’t communicate properly, your perspectives aren’t going to be shared.

2. Conflict management: This is a sensitive point for farm families, but if you don’t seek out the necessary professionals or tools required to minimize conflict, you’re going to have a major issue.

3. Time management: Studies show that if you work more than 3000 hours a year, eventually something will crack. Make sure you are managing your time on, and off of farm, properly!

4. Take time off for holidays: each family member should take 2 weeks of per year!

5. A formal human resources plan: You need to have a formal HR plan that is implemented and reviewed. The reason for this is it makes goal setting a lot easier, and stats show that if you have goals written down you will make 9 times the wealth, compared with people who don’t.

For further notes, please refer to the following resources:

1. Effective Communication: barriers and strategies

2. Conflict Resolution Skills

3. Time Management by Penn State University

4. How to Manage Your Time Effectively by Kent University

5. 6 Rules to work less and get more accomplished

6. Personal Goal Setting: Planning to Live Life Your Way

7. How to Set Goals for Your Company and Improve the Bottom Line
This workshop was funded in part by the Agriculture & Food Council of Alberta

 

 

Introduction to the Financial Risk Pillar of Your Farm Operation

As a farmer, you need to understand your farm finances in your operation so that you can mitigate risk.

There are three main things that you should be aware of:

  1. Profitability:The first thing to understand is whether your farm business is profitable. You need to be able to make an operational profit, or you cannot farm. It’s as simple as that.2. Assets: Number two is that you need to protect your assets.

    3. Role as a farmer: Number three is that you need to clarify your job as a farmer. We sometimes confuse what we like to do, with our role as a farmer. However, “like” doesn’t feed your family.

    There’s a rural myth that by working hard, you’re making money. However, it’s essential to take a step back from the hard work, and really try and understand your numbers. Think about it this way – would you ever accept the terms of conditions of employment, in which you work all year and then pay your employer money to have that job?

    WatchReg Shandro introduces the financial risk pillar of the ‘5 Pillars of Risk Management’ and tell you what to look out for.

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

 

How to Understand Your Farm Operation’s Working Capital

 

Working capital = your current assets MINUS your current liabilities (what you need to pay off in the next year)

It’s a representative of your ability to weather your short term commitments. Different farms (with different focuses, for eg. wheat vs. dairy) will have different working capital expectations.

By rule of thumb, you should have 25% of next-years expenses sitting in working capital. So, if you have 1.25 million dollars of assets sitting there in cash or inventory and you have 1 million dollars of expenses next year, then you will have a $250,000 buffer to allow for some breathing room for next-years expenses. If your farm has no breathing room, you’ll have to have a plan for what will get you through the down curve, or unexpected events in your farming production.

Watch Reg Shandro shares a few simple tips to take a look at how your capital is working for you.

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

 

How to Boost Your Farm Business with an All-Star Advisory Team

Do you want a huge boost to your farm operation? Here’s a great tip: get all of your agriculture advisory professionals together in a meeting to share their oprinions and strategies for your farm business.

This means getting your accountant, banker, insurance agent, investment advisor, vet, lawyer and so on, together at the table. We know this is pricey but there’s tremendous value a meeting like this could have for your farm business.
Reg Shandro explains why it’s important to have an advisory team for your farm business operation.

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