Once you have decided on your objectives, plan how you are going to achieve them.
What does a plan entail?
Planning means that a farmer must decide in advance what should be done, how each task is to be accomplished, by when the task should be done and who is responsible for completing the task. Planning is therefore a decision made today about future action needed to achieve the farm business objectives.
Planning for the future is however a difficult task because circumstances might change, e.g. prices of products might be lower or input prices higher. The economy constantly experiences change, from steady to rapid. The unpredictability of farming conditions could mean that the farmer has to change his entire plan frequently and at short notice. If he has not taken the consequences of such change into account, he may be caught off-guard and suffer losses.
A basic tool that can be used in the planning process is a budget. What is a budget? A budget is a statement of expected results expressed in numerical terms. Enterprise budgets, for example, enable the farmer to determine the quantities of various inputs required in beef production – such as feed, medication and licks – and the expected returns that will be generated for each livestock in the enterprise.
Using data from enterprise budgets, a farmer can then generate a whole farm budget where there is more than one enterprise, to summarise projected costs, returns, and net income. Financial statements and/or budgets, such as cash flow, provide information on expected cash inflows and outflows that will occur during the upcoming production period.
Implementing plans
When the farmer has completed the planning, he must choose the most effective ways to execute the plan. Implementation means putting the chosen plan into operation, which involves the acquisition of the necessary resources and equipment (labour, money, tractors etc., and management skills).
When you produce cattle for beef production, you must make sure that you get the necessary inputs … livestock, feeds, medication, water infrastructure, and fencing – all in good time to ensure that all resources of the required quality will be available at the right place and time.
Controlling activities according to plans
The Farm Manager must supervise and controls activities to ensure that everything goes according to plan. This involves record-keeping – which is more than simply keeping track of past performance through historical records; it requires a comparison of the actual outcome reported in the records with the projected budgets prepared during the planning process. If the control system is properly designed, a deviation between planned and actual performance should provide the Manager with some indication of where a specific problem may lie – hence the importance of tangible and specified indicators.
Consequently, the Farm Manager, with an adequate control and management system, can detect problems early and make corrections to ensure goals are met. Without records, a farm business is like a vehicle without a steering wheel. It will run without anyone knowing where it is going and eventually crash into a tree.
The flow chart below summarises management as a continuous process. You have probably been doing this – maybe without realising it – when you purchased your cattle, fed them, decided to sell them to your chosen market and when labour and other resources are used in the process. Whether you are busy with finance, production, marketing or personnel, you must do the planning, implementation, and control.
An illustration of the continuous farm management plan