10 things to consider when setting financial goals

In this article, we provide a list of 10 things farmers need to consider when setting financial goals and how stepping off the farm and into the office might be exactly whats needed to achieve them.

Setting goals for revenue, profitability, and ultimately, your financial future, is one of the most important things you can do to achieve farm business growth.  

With so much happening on the farm, it can be difficult to find the time to take a step back from the busyness of your day-to-day and look at your operations. And let’s face it, the only real reason we look at the closing balance on our loan is to see whether it’s reduced.

Why is planning for the future so important?

Recently, input costs have gone up significantly, impacting farmers’ terms of trade.

The rising price of fuel, fertiliser, chemical and seed makes this one of the most important times to look at your revenue goals.

Having goals (or a vision, as we call it) is key to staying on track and having clarity on what you’re trying to achieve with your farm and why. When setting financial goals, it’s important to consider where you’d like to be in the future. Maybe you’re looking 5 or 10 years ahead, perhaps even further depending on what you want to achieve.

When talking to my clients, I recommend starting from a production perspective because this is where we can generate your cashflow projections, then move onto your longer-term goals for succession planning and estate planning, etc.

10 things to consider when setting future financial goals:

  1. What are you going to plant in the future?
  2. What are your forecasts in terms of yield?
  3. What are the costs involved?
  4. How many cows are you running and what does your livestock schedule look like?
  5. How many are you going to turn off?
  6. How many are you retaining?
  7. What pricing are you looking at into the future?
  8. What can you do to set something aside for your own retirement planning, succession planning and estate planning?
  9. What about emergency funding?
  10. What can you do from a tax planning perspective?

Financial projections

Maybe you wind it back from the current high cattle prices just to see how it would impact your profitability and most importantly, your cash flow.

It might seem premature, but what would it look like if you projected out for the rest of the financial year and into the following?

This way you can investigate how things might look from a tax perspective, then you can make plans around what you could potentially do to minimise your tax position.

As always, the first step to getting a handle on your revenue goals, cashflow projections and your vision for the future of your farm, is to set aside the time to do it. 

Regularly revisit your projections

With so much changing all the time, it’s important to keep coming back to that vision to help you with your clarity, to reassess your goals when you need to adjust and to help you with your decision making.

If, like many farmers, the last thing you want to do at the end of the day is step into the office, you’re not alone.

I often tell my clients it might be worthwhile considering stepping off the farm to do your planning. Getting away from the farm and dedicating time to map out your vision and do anything that requires planning for the future is the best way to set your goals without the distraction of what’s happening outside.

If you want to partner with an advisor who can help you through the process and provide you with a level of accountability to make this happen, you can schedule an appointment with me and we can discuss the best path forward for your family and your farm. 

Take the first step. Plan for the future.

Book a no-obligation call with me today.
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