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Mr Nevin Holland

Farmer, Young, NSW 2594

There are several ways of making plans - in your head or on paper. Planning your farm or your business is like planning a trip. If you are not going far or doing much you do not need much of a plan. You can do it in your head. But if you are going a long way, doing lots of things, especially exciting things, you need a good plan and commit it to paper.

Someone once said, "Nothing worthwhile was ever achieved without a great deal of effort".

Success is not achieved by accident.

We as farmers need to plan very carefully in these days of low margins. We handle a fair bit of money in a year, we have valid assets but very often little money left at the end of the year. Whether we like it or not we are in a risky business. That being so, there is little room for error. As farmers, we need to plan as never before.

When I was younger I planned in my head and on small pieces of paper. Interest was low, inflation was low and returns were much smaller. One could make mistakes and still survive.

Operating with low margins and high turnover is like navigating a big ship through a narrow, hazardous channel. We need to know exactly where we came from, where we are and where we are going; where the deep water is, where the shallows and sandbars, rocks and icebergs are. Would a responsible captain enter such waters without charts and maps? No, of course not! Wouldn't the second-in-command and crew like to know exactly what is happening in such circumstances? So it is with our businesses. If we are not to be irresponsible in hazardous times we need to plan so that we know where we are and where we are going. The wife or second-in-charge, employees and bank manager all need to know also if we are to avoid failure.

Put another way: Imagine we are a businessman who has just bought a farm for a million dollars and we are going to employ a manager. Wouldn't we want to set some guidelines and goals for that manager: how much stock and what sort; how much crop and what varieties, seeding rates, fertiliser, chemicals, etc, to be used; develop a farm improvement program and an expected return?

Having worked through the plan with the manager at the end of the year we would want to hold him accountable. Is the reason so many people do not want to commit plans to paper because it makes them accountable to themselves, bank managers and others? If it is good enough for our manager to achieve better performance and maximise returns by planning, why is it not good enough for us?

We need to remember the old adage: "To fail to plan is to plan to fail".

We also need to remember that there are three kinds of people in this world:

• Those who make things happen

• Those who watch things happen

• Those who ask 'what happened'?

If we are to take control to make things happen to get where we are going, where do we start? We need to start from here and put on paper all assets and liabilities, our strengths and weaknesses and decide where we want to go and how. What then should we include?

The following are suggested:

(i) physical plan

(ii) (ii) financial plan

(iii) (iii) management plan

(iv) (iv) family plan

(v) (v) lifestyle plan

(vi) (vi) estate plan

(vii) (vii) retirement plan

(viii) (viii) personal development plan

to name just a few.

Physical Plan - Farm maps showing total area plus the area of each paddock, trees, rocks, creeks watering points, pipelines, gullies, waterlines, etc. These are very useful for working out crop rotations, spraying and chemical requirements, recruiting staff and keeping records.

Financial Plan - We need to look at assets and liabilities such as stock, plant, land, produce, etc. List loans and dates that interest and principal repayments fall due.

Management Plan - Here we need to look at how we can best manage the assets we have to achieve our goals, having first set our goals. What is the best mix of opportunity and ability to achieve what we ALL want? How much stock, how much crop, what sort of crop and stock, which mix will be most profitable, what is our ability in these areas and is it sustainable in the long term? When we have our best management plan worked out it has to be costed but can we afford it? What are the returns? What is our cash flow? This is monitored on a monthly basis. What is our peak debt and income areas? What capital do we need? What is our surplus? How do we retrieve it? Planning, all planning.

Family Plan - That is different to family planning. Here we need to look at all members of the family: the wife, children, parents, all those to whom we have a responsibility and who may have an interest in the business. What are their aims and ambitions and how can they be accommodated?

Lifestyle Plan - That is why we are in the business of farming - is it for the lifestyle or is it the money? How can we ever take a holiday if we do not plan for it? How many people do we know who work seven days a week and never take a trip or holiday? Part of the award wage conditions is 4 weeks annual leave plus one week loading plus long service leave. Surely we are entitled to that much. We need quality time with family and friends. If we plan, we can have it and still get the job done. It will not happen by accident.

Estate Plan - Is there a will? What will happen if the owner suddenly expires or the spouse expires or both go together? Hopefully none of these things will happen too soon but they will eventually, so we need a plan for that day. The best time to do it is right now.

Retirement Plan - Will we retire? If we are fortunate we will. If we are more fortunate we will do it gracefully. We need to know how much money we need, when and where and make it happen. We need to make way for our successor, if that is in our plan. The sooner we start the better.

Personal Development Plan - We at this conference are involved in personal development. If we are to survive in these times of declining terms of trade and greater competition we need to be smarter in so many ways than the next bloke - smarter than we were last year. We need to hone up our existing skills and develop new ones and use best practices in all areas. We need to communicate better, to be better educated, to educate those in our business and most importantly we need to be aware of how important our attitude is. Be positive. Have high self-esteem. Be motivated - with a negative attitude and low self-esteem we are in for a difficult time.


Have we made mistakes in the past? We have all made plenty. If we were asked to list all our mistakes of the last 12 months or 10 years, could we? That is hindsight. We need to look at the future.

If we were asked the same question in one or ten year's time what do we think our mistakes will be? Will we be able to list them? It is an interesting concept isn't it? Looking into the future, stretching our imagination, imagining our mistakes and planning for those mistakes not to happen.

Planning is about the future: planning for mistakes not to happen; planning our businesses and lives to get the maximum benefits available.

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