Strategic Farm Management
Sieverkropp Consulting LLC.
Contact: Elizabeth Sieverkropp [email protected] (509) 398-6858
Website: www.sieverkroppconsulting.com
Training Program Homepage:www.sieverkroppconsulting.com/fsa-borrower-training-program-homepage
NameWhere do you farm?What do you farm?IntroductionsStrategic Farm ManagementCharacteristics of Successful Farm Managers, Goals Setting, SWOT AnalysisUnderstand the importance of strategic management on the farm.Understand how to set effective goalsUnderstand how to develop a mission statement and tell your farms storyUnderstand how to survey the business environment
ObjectivesWhere do we aim?Lean towards actionLearn the needs of their customersPromote managerial autonomy and entrepreneurshipAchieve production by paying attention to needs of their employeesDriven by value-based company philosophyFocus on what they know bestSimple organizational structure Characteristics of Admired CompaniesSource: Essentials of Management by Koontz & Weihrich, 8 editionWhat is a manager?Someone who is in charge of a business, department, etc.. ~Merriam-WebsterWhat is a successful manager?A successful manager continually adjusts decisions based on economic, technological, political, environmental conditions, and structural shifts.
Think of how differently you farm compared to prior generations. Traits of Successful Farm ManagersSet goals, research, and devise a detailed plan of actionCommunicate and execute plan of action with employeesRecord and analyze the results of implementationKeep a journalAdjust the plan for the future based on results
What do successful farm managers do?Know exactly where the business is financiallyBuild connections and research input costs and technology improvementsKnow how your farm can be more efficientEffectively communicate and motivate employees What do successful farm managers do?Purdue University Top Producers2006 Profit in Thousands of DollarsSkill Category0-5050-100100-200200+Production Management58626676Procurement and Selling58626572Financial Management69747681Personnel Management26313747Strategic Positioning51565863Relationship Management60646370Risk Management61666870* 100 = Highly AdoptedSource: http://www.agrisk.umn.edu/Library/Display.aspx?RecID=3953 What should you do?Your time managing the farm should be split between:PlanningImplementationControlAdjustment
Goal: find the balance that works for your farm. Running your business is likePlanning a vacation
Strategic v. Tactical ManagementStrategic: Overall StrategyDefine the mission of the business (Mission Statement)Formulate the goals of the business (SMART Goals) Access the resources of the business (SWOT analysis)Survey the business environment (SWOT analysis)Identify and select strategies that will reach the goalsImplement and refine strategies that will reach the goalsTactical: Implementing StrategyDecision MakingIdentifying problem/opportunityIdentify alternativesCollect data/informationAnalyze alternatives and make a decisionImplement decisionMonitor/evaluate resultsAccept responsibilityMission StatementWhat is it?Short description of why the farm or ranch business exists and its goals.~Kay, Edwards, and Duffy
Why do you need one?Defines and clarifies your dreams for the futureKeeps your goals on targetKeeps you focused on your strengthsElements of a good mission statement:States what the business might look like when it grows upWhatHowWhyBlends realism and optimismThinks long termWhat makes a good mission statement?Brainstorm.List your farms skills and abilitiesList your farms personality traitsList your farms values, dreams, passionsSummarize in 1-2 sentences
Evaluate it.Does it agree with generic missions?Does it use the farms skills, traits, and values?Does it provide ongoing challenges?Does it provide inspiration and direction?
Implement it, share it, display it.Writing a Mission StatementProfitable growth through superior customer service, innovation, quality and commitment. ~AGCO
Our purpose is to create superior value for our customers, employees, communities and investors through the production, conversion, delivery and sale of energy and energy services. ~Duke Energy Company
We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. ~Ford Motor Company
We fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments. ~Harley-Davidson ExamplesTo help our clients achieve their financial objectives by serving as their tax and financial partner. As the world's largest tax services company, H & R Block has one-to-one relationships with millions of clients, helping them benefit from all of the deductions and credits available to them and build a better financial future. It is the only major company that offers a full range of software, online and in-office tax solutions, combined with financial information and suggestions that enable clients to consider how they could achieve their financial objectives. This advice -- the H &R Block Advantage -- includes suggestions about retirement savings, home ownership, saving for their children's college education, eligibility for government programs and other alternatives. When clients request in-depth financial plans and investment advice, their H &R Block tax professional refers them to H & R Block Financial Advisors Inc., which can assist them with a detailed investment plan and investment services. H &R Block Financial Advisors, member NYSE, SIPC, employs more than 1,000 financial advisors serving clients in more than 150 offices in the U.S. H & R Block Inc. is not a registered broker-dealer. Clients who request information about home mortgages are referred to H &R Block Mortgage Corp., which offers a full range of retail mortgage products. Our research shows that our H &R Block Advantage advice package along with related financial services increased client satisfaction with H & R Block's tax services. H & R Block has long been a trusted tax partner to millions of taxpayers. Now we are enhancing the value of our tax services by helping clients as their tax and financial partner. ~H & R Block
Create value for shareholders through the energy business. ~Kerr-McGee Corporation
Why do you need one?You cant determine where you are going unless you know where you have beenStanding on shoulders of giantsMarketing to consumersYour Farms Story
Running a business or life without goals is like starting a road trip only knowing you want to reach the east coast. Its long, drawn out, stressful, expensive, and filled with road closed signs.
What goal setting can do in your business:Unite your teamStreamline your hard work and create efficiencyCreates a reference point for decision makingThe Power of Goal SettingSpecific: goals need to be straight forward (summarized in 1 sentence)Ex. To expand my beef herd vs To expand my beef herd by 50 mother cowsMeasurable: allows you to gauge your progress and develop a plan of actionAttainable: is your SMART goal realistic?Relevant: needs to be related to your operations values, mission statement, and definition of successTime Limit: creates motivation through deadlinesSMART GoalsWrite goals downMake your goals yoursShare your goals with those that need to knowPost your goals where you can see them everydayCelebrate when you accomplish your goalsKeep setting new goals as you achieve old ones
Making Goals StickTo expand our beef operation by 50 mother cows by December 31, 2018. S M A R T
To fully repay our loan of $80,000 for the combine by September 15, 2016. S M A R T
To build a farm emergency fund of 6 months, equivalent to $100,000, by December 21, 2019. S M A R T
SMART Goal Examples
SWOT AnalysisSWOT is a simple brainstorming activity that identifies your farms strengths, weaknesses, opportunities, and threats.Birds eye view of your business
Youre already doing a SWOT analysis, you just need to write it down.What is my farms advantage over a similar neighboring operation?What is my strength as a manager compared to a similar, neighboring operation?What are my employees strengths compared to a similar, neighboring operation?What makes my farm unique compared to a similar, neighboring operation?StrengthsWhat is my farms disadvantage compared to a similar, neighboring operation?What is my weakness as a manager compared to a similar, neighboring operation?What are my employees weaknesses compared to a similar, neighboring operation?What am I most dissatisfied about in my business?WeaknessesWhat is happening in my market that could benefit my farm?What is happening in the government that could benefit my farm?What is happening locally that could benefit my farm?What technology could benefit my farm?
OpportunitiesWhat is happening in my market that could harm my farm?What is happening in the government that could harm my farm?What is happening locally that could harm my farm?What technology could harm my farm?
ThreatsComplete this activity with your management team or family.Set aside several hours.Only accept precise, verifiable statements.i.e. instead of changing market try decrease in cattle supply is expected to result in higher cattle pricesPrioritize from most important/urgent to least important/urgent.Use SWOT to adjust goals and make decisions.Complete SWOT for each enterprise and possible business ventures.Tips for SWOT SuccessStrengthsWhat is my farms advantage over a similar, neighboring operation?What is my strength as a manager compared to a similar, neighboring operation?What are my employees strengths compared to a similar, neighboring operation?What makes my business unique compared to a similar, neighboring operation?WeaknessesWhat is my farms disadvantage compared to similar, neighboring operation?What is my weakness as a manager compared to a similar, neighboring operation?What are my employees weaknesses compared to a similar, neighboring operation?What am I the most dissatisfied about in my business?OpportunitiesWhat is happening in my market that could benefit my farm?What is happening in the government that could benefit my farm?What is happening locally that could benefit my farm?What technology could benefit my farm?ThreatsWhat is happening in my market that could harm my farm?What is happening in the government that could harm my farm?What is happening locally that could harm my farm?What technology could harm my farm?
Farm Story/Mission StatementGoalsSWOT AnalysisTactical ManagementDaily decisions that help you move forward towards your SMART goals and mission statement.
Goal: To expand our beef operation by 50 mother cows by December 31, 2018.Tactical Steps: choose feed rations to keep cows healthy, retain an additional 10 replacement heifers each year, acquire hay for the winter
What tactical decisions can you think of?Strategic Planning ProcessSource: Northwest Farm Credit ServicesWrite a mission statement for your farm.
Write your farms story.
Develop SMART goals for your farm.
Complete a SWOT analysis for your farm.HomeworkTake a minute to write down one or two ideas or takeaways from this lesson. One Minute Takeaway
Sieverkropp Consulting LLC.
Contact: Elizabeth Sieverkropp [email protected] (509) 398-6858
Website: www.sieverkroppconsulting.com
Additional Resources:www.sieverkroppconsulting.com/additional-resources
