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How to Boost the Profitability of Your Farm

In an industry with constant price changes and minimal ability to negotiate, it is important for farmers to be aware of costs they can control to ensure their farms are profitable.

Farmers need to be able to manage multiple problems, including scaling up production, improving cash flow, time management, weather patterns, and managing the need and prices of stock, seed, chemicals, and fertilisers.

The drive for sustainability is another matter they need to contend with as more people are demanding locally sourced, organic or chemical- and pesticide-free, sustainable crops.

To ensure your farming business remains profitable, here's a list of best practices to reduce costs and increase profits

1. Reduce the cost of supplies
Negotiate with your suppliers to improve contract prices and terms. Opportunities to negotiate discounts may arise if you prepay costs or buy in large quantities. Evaluate your suppliers, pick out the ones you absolutely need to deal with, and then work with them on reducing costs without sacrificing quality.

2. Improve efficiency
Work on tightening up efficiency in terms of management decision-making and operations. Group discussions usually take time, so review your decision-making matrix and make the necessary changes to facilitate efficient, rash and timely decisions. Have your annual plans in place, review them regularly and adjust accordingly. It is also important to review your cashflow to anticipate any upcoming costs versus expected timing of income. Due to the nature of seasonal income, timing of payments is crucial to your success.


3. Value your staff

If you're fortunate enough to hire teachable, receptive and responsible farm employees who'll be with you for the long haul, be sure you provide them with a good package including fair wages, benefits, career progression and continuing education or training. Negotiating packages that include profit share arrangements or bonus' based on crop yields or livestock weights will provide staff with more responsibility and incentives to strive for better results.

4. Outsource professional services
As the owner of a farming business, you need to wear many hats. However, sometimes it makes sense to outsource specific services critical to your business. If you find yourself so time poor that it is impacting your business, it may be beneficial to look to outsource tasks such as bookkeeping, financial accounting and analysis, human resources, information technology and marketing to professionals.   Doing this will not only improve your business efficiency but also ensure you have the expertise your farm business needs without the need to hire full-time employees.

5. Partner with retiring operators
Retiring farm owners may still want to be involved in the industry, but without the additional responsibility and stress. These retirees can make great partners, with much insight to give.   If your prospective partner can still be involved in the business part time, you can benefit from their decades of experience, and gain access to additional farm equipment that would otherwise cost you a heft amount if you were to invest in its acquisition on your own!

6. Brand your farm
Your farm may have a name, but is it considered a full-fledged brand? Working with a marketing professional will help you to accurately voice your brand, values, purpose and story. This will not only help in building your presence in Australian rural communities and locally but also in the digital realm. The World Wide Web is a place you shouldn't ignore if you are to market your business to the younger generations.

To make the most of these six powerhouse tips, seeking help from accredited accountants and advisErs is a must to keep your profits at an all-time high



About the Author – Ellen Maloney


 


 

ABOUT MURRAY NANKIVELL 

Our aim is to help you reach your full financial potential. 

We have three main offices - NaracoorteBordertown and Murray Bridge – as well as 11 Visiting Offices in Meningie, Coonalpyn, Tintinara, Lameroo, Keith, Millicent, Robe, Penola, Kingston, Nhill and Kaniva. We also visit all areas in between on appointment. 

We have been helping our clients grow their business, minimise tax and improve their bottom line for almost 80 years. Our goal is to be our clients' most valued adviser. To achieve this, we are innovative and supportive in our relationship with clients. We have a personal approach where we can get to know you and your business. Our clients know that they can rely on us and that we will work with them toward their success. 

For more information about Murray Nankivell please contact us at on admin@murraynankivell.com.au or phone us on 08 8765 7777. 

Other Murray Nankivell posts you may be interested in:

Six tips to get the cream of the crop when hiring fruit pickers & seasonal farm workers
Increase your efficiency with Cloud Accounting


New Corporate Compliance Software Provider

Murray Nankivell have recently transitioned to a new corporate compliance software provider called NowInfinity. As a result of this, the way we send you documents regarding your company's dealings with ASIC, has changed.

NowInfinity's software allows us to prepare and process all of your company needs (i.e company annual review statements, ASIC forms for any changes to your company, and much more) to be sent directly to your email address for electronic signing.

If one or more individuals share the same email address, the forms you may be sent for signing will only be required for signing by one individual, even if more than one may have signed previously.

We are always striving to streamline and fine-tune our processes to make things more efficient for you, our valued clients.


TIPS TO GETTING THE CREAM OF THE CROP BEFORE HIRING FRUIT PICKERS & SEASONAL WORKERS

Subject to what your farm grows and the time of year your crops need to be harvested - employing temporary immigrant or seasonal workers for fruit picking or other seasonal farm work can be extremely beneficial for everyone involved.

That said, below are some key tips to consider and take into account before hiring temporary seasonal workers for your fruit-picking season.

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Unless you've been living under a rock, it's impossible to have missed the pins in fruit scare, which has severely impacted the strawberry farming industry. While social media initially fueled the Nation's fear due to fake images of pins in strawberries being posted, the Internet is now alive with people showing their support for affected farmers.

This cruel sabotage comes during one of the toughest periods for drought affected farmers, with Strawberry farmers now subject to a national crisis with every State affected and multiple incidents reported across Australia.

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Keeping up with ever-growing demand is vital for the future success of the agricultural industry. Population is growing and its impact on farmers is one of the most important considerations to be made. Our country's growth alone is already ahead of predictions by more than 30 years. To ensure sustainability of future supply there can be many approaches that can be considered including investing in new technology through to successfully managing succession of family owned farms. 

It was predicted in 1998 that Australia would reach around 23.5 million people by 2051, yet in 2018 we've already reached 25 million and are growing at an unprecedented rate.

How does this impending evolution of society impact agriculture? What role does agriculture play in feeding Australia and how will it maintain exports while also meeting the growing demand of its domestic markets?

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Managing People as a Business Grows - Importance of Communication

Why, how and what to do when managing people as your business grows

Managing people and keeping up the motivation for yourself and your team as your business grows can be a complicated, exciting and daunting process.

While the increased cash flow and growth is great, it can also mean many organisation and managerial changes, which you need to be ready for.

However learning and planning to manage people as your business grows doesn't mean it has to be hard.

At the end of the day – the evolution of your company or business is directly linked to the professional growth of your team members, your systems, marketing and satisfaction of your customers.

When you're able to manage and communicate with people effectively, your business or company will reap the benefits and continue to evolve.

So how do you handle managing team members along with the growth of your business?

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The Four Types of Business Structure

How To Protect Your Assets And Limit Liabilities



What is the right Australian business structure for your business? Sole trader, company, trust or partnership? It is not an easy decision to make; the wrong choice could be costly and put your assets at risk. So taking the time to evaluate your choices and make the right one is well worth it in the long run.

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Planning is Key to Agricultural Business Success


In this post we're going to explore some of the key strategies to planning for your agricultural business' success.Whether you're a small market garden growing vegetables or a large agriculture business exporting livestock, when it comes to growing a profitable and sustainable agriculture business planning is key to your success.

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The Value Of Owning Your Business Premises

7 advantages of buying your own commercial business property

Considering buying your own commercial business premises? As exciting as this is, there are many key factors to consider and decide upon before making your final decision.

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