Cash in on your plans to better the farm
While 2013 was a good one for dairy farmers, do you want to improve your farm performance?
Are you making pledges to increase cashflow or profits in 2014?
Planning for increased profits requires more than just hoping and wishing for change. Writing out objectives clarifies them and helps to identify actions to be taken to achieve ambitions.
You need to decide exactly what you want, what it will look like, and how you will measure your progress towards achieving your target.
You also need to ask yourself why you want to accomplish the goal you are considering.
Understanding your motivation is a powerful tool in helping you to achieve your goals.
If you want to increase your cashflow by the end of 2014, it will involve writing out a cashflow budget for the year and then monitoring progress each month.
This might seem like a daunting and overwhelming task, but with a little bit of time and commitment, it can be done.
Your Teagasc adviser can provide you with tools — paper worksheets, computer spreadsheets, to help you. Your discussion group could also offer support and advice.
Your family will also chip in, if they understand the importance of this new habit.
The budget doesn’t have to be 100% accurate, just your best estimate of the money-in and money-out of the business in the next 12 months.
Make sure that you are happy with the predicted cash-flow for the year; if not, you will need to rebudget.
You will need to record all receipts and payments each month.
Why should you focus on cashflow?
Cashflow is the life-blood of a business: No cashflow, no business.
Speaking at the Teagasc Dairy Conference, financial management specialist Kevin Connolly said: “Knowing your cashflow allows you to control profit allocation. Waiting until you know your profit means the allocation has already happened. Monitoring your cashflow is the only way of really taking full control of farm financial decision making.”
