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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

Why You Need a Capital Budget Plan for Your Business

If you’ve ever had to phone your banker from the auction mart about an un-planned capital purchase, you probably could use a capital budget plan.

Another component of financial risk is understanding your capital budget(i.e. what items in an ideal world do you think you need in the next 12 months?). This information is helpful for your banker, as it helps him/her plan for your farm’s future.

You need to have and understand your capital budget plan. Not only will it help you make good with your banker but it will also help to take the emotions of decision making in relation to the market place.

Watch Reg Shandro explain why you need a capital budget plan.

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


Why you need a capital budget plan for your farm business

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

 

Wrapping Up the 5 Pillars of Risk Management

Reg Shandro wraps up the ‘5 Pillars of Risk Management’.

It’s important to note that there has to be a balance between the different pillars of risk. However, you must also remember that with the 5 different pillars, the lowest common denominator risk will be the limiting factor on your farm operation. For example, if you have the best production in North America but you have an extremely poor marketing plan, then there is a major risk to the profitability of your farm operation.

So, it is critical to identify the 5 areas of risk on your farming operation and see if you can bring up the level of all 5 pillars to help mitigate risk and improve your farm operation.

One way to think about all of this is, rather than thinking about how much money you can make, think about how much money you stand to lose.

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

 

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

 

 

Managing Your Human Resource Risk

When you’re in a farm operation there are a number of different risks and in order to be successful as a farmer you need to understand:

1. What the risks are;

2. The potential for problems with the risks;

3. How to alleviate the risks to an acceptable leve

To understand the whole picture you need to educate yourself and then consult professionals to help you out.

‘Human Resources Risk’ is one of the ‘5 Pillars of Risk Management’, as explained by expert Reg Shandro.  In farm families the complexities of managing human resources can be risky business!

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

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

 

Risk and Return in Agriculture: An Intro to Risk Management

In essence, risk management means that the higher the risk, the higher return. However, in reality, risk managment in agriculture is somewhat different.

Watch Reg Shandro introduce the concept of risk management in yourfarm business.

What is risk management in agriculture?

The agriculture industry is unique with a different set of risks and rewards compared to other industries.  If you want to be successful you must know how to manage the risk to maximize your returns.

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

 

 

The Production Risk Pillar

Production is what farmers know best. However, it never hurts to hear some needed advice from the experts.

Production risk exists in weather, in yield, in quality, in expansion of the farm operation, rotations, seasonality, government programs and more.

Watch Reg Shandro explain the production risk pillar of the ‘5 Pillars of Risk Management’.

For more information about production risk check out this excellent guide by Utah State University: Managing Production Risk in Agriculture
This workshop was funded in part by the Agriculture & Food Council of Alberta

 

The Secret to Farm Finance

Reg Shandro explains the secret to farm finance – how farmers typically look at the cash flow situation on their farm, and how they really should be looking at it.

Farmers typicaly look at cash flow as a lake or a river.

Looking at cash flow as a “lake”, the farmer thinks ‘I have lots of assets and lots of networth, so what’s the problem?’.

Looking at cash flow as a river, the farmer thinks in terms of cash coming into the farm business and cash going out of the business.

Watch the video to find out the secret to farm finance and how the bank wants you to look at cash flow on your farm.

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

 

The 6 Financial Options on Your Farm

What are the financial options for your farm?

Reg Shandro boils it down to 6 distinct areas where your farm businesscan get revenue from.

1. Surface right revenues;

  1. Inheritance or lottery;
  2. New borrowing or restructuring debt;
  3. Sale of Assets;
  4. Off Farm income;
  5. On farm income;Take a look at which ones are within your control, I bet it’s fewer than you’d think.

    If you’d like to follow along in figuring our the 6 financial options for your farm, you’ll need:

    1. A piece of paper divided up like in the video;

    2. A red pen and green pen;

    Watch the video to figure out how to do the rest!

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