As an accountant and business adviser who works largely with farming clients I see people every week who are stressed about the raft of upcoming developments and what it’s going to mean for their businesses.
It’s not an easy time but, as I explain to them, it’s not all doom and gloom if you face it all head-on rather than burying your head in the sand and hope it will all go away.
I’ve recently joined BFA, a business advisory and accounting firm in Taupo but I previously managed Wairarapa Moana Incorporation, one of the country’s largest dairy firms for five years and before that worked at Crowe Horwath in its agribusiness team.
In all of those roles working in different sectors of farming and growing up on farms myself I’ve seen just how hard people in this industry work and how some days it seems almost too much to add all the concerns of running an environmentally friendly, profitable business to a physical schedule that starts at dawn and ends well after the sun has set.
I think for many years it was okay to just roll from year to year but challenges like synthetic proteins, new human resources regulations, environmental compliance, fluctuating commodity prices and changes in banking regulations mean a strong business head and some serious forward planning are required to thrive in this new climate.
Farmers, in my opinion, are some of the most resilient business people out there and I think they will adapt and thrive.
Here are some of my thoughts for anyone who is feeling overwhelmed by the business of farming right now.
Be honest with yourself. I see far too many farming clients in total denial about the size of their debt and the practical steps needed to work themselves out of it.
Talk to someone rather than keeping all that worry to yourself. So many times I have a client come in to talk numbers but it ends up being much more than that.
The stress of how the farm is doing has started to affect their relationships with family and friends and the relative isolation of the job means they are keeping it all bottled up. Don’t try to deal with it all alone. Talk to professional and personal support people and tackle the challenges together.
Synthetic proteins are coming but don’t let that scare you.
Many people still want to eat the premium, naturally-grown protein you produce and as the world population grows New Zealand products will become niche and continue to fetch a premium with trade partners.
However, we need to make sure we meet consumer expectations when it comes to being sustainable, not only environmentally but also in our treatment of the people who work in the industry.
If we can meet that ethical expectation, we can warrant our premium.
Take control of your budgeting. There was a time when it was fine to let the bank or your accountant do it all but now you really need to understand it and produce it yourself – with help if you need it.
Look at the changes that are coming and have a plan for how you’re going to deal with them rather than waiting until it’s too late.
Having a plan is a road map for success and knowing where you want to be in 10-15 years’ time is important. Any decisions you make today should help you track towards that goal.
Take advantage of the developments in business software to reduce your office time.
Most people are aware of software programmes like CashManager or Xero and now Figured (a Xero add-on) appears to be growing in market share too. It can budget, forecast and develop scenarios planning 10 years ahead.
Keep your business under review.
One thing is for sure, change will occur in your lifetime.
Those who adapt to change the quickest are the most successful.
Also, challenge the status quo in your business. One thing NZ farmers are great at is adapting to a changing landscape.
Succession planning is important, even if it means some tough family conversations.
Have faith that solutions will be found to these pressing industry issues.
While there are some huge challenges facing farming there is a lot of investment by the Government, the co-operatives and third parties and it will turn into solutions.
With deadlines looming, solutions will have to come fast.
Good environmental management and sustainable profit are not mutually exclusive concepts.
It can and will be possible to do both.
While it’s undoubtedly a time of flux for many primary industries this current climate doesn’t have to spell disaster for farmers.
With good planning, total transparency and creative solutions I am seeing businesses thrive where they were struggling, after taking control of their circumstances and finding innovative ways to step into this new industry future.