At seminars, producers are sometimes asked to jot down a mission statement for their dairies. Some jump right into it, while others sit there with blank looks on their faces.
It kind of makes you wonder, though. If something as basic as a two- or three-sentence mission statement can be a stumbling block, what about some of the more difficult phases of the business planning process, such as the sizing and financing of new facilities.
That’s why it’s so important to hire the services of a qualified business planner. He is likely to have worked with other producers who have operations similar to your own. And, he is armed with computer software that can project your performance into the future.
Here are some ideas for finding a business planner and then establishing a good working relationship with that individual:
- Ask other producers and business professionals if they can refer you to a good business planner. (For more information, see “Referral sources” on page 64.)
- Choose someone with a personality and working style that’s compatible with your own. The interaction between you and the business planner can become very personal at times, because you are discussing your personal goals, along with those of your family members. You must be open with one another. “You have to be on the same wavelength,” says Gary Anderson, senior business analyst with Farm Credit Services of North Central Wisconsin.
The planner must be a good listener. He must take into account your particular needs, wants and desires.
- Ask a lot of questions. Keep asking the planner, “Why do I need this and that?”
Don’t let the planner push you into some preconceived cookie-cutter mode for expansion. Some planners have their own little formulas, such as getting a farm to 500 to 600 cows, and then doubling that size at some point in the future. Not everyone is cut out for that type of expansion.
- Be able to provide the planner with good production and financial numbers. Most planners use special computer software to project different production scenarios and the resulting cash-flows. But, projections are only as good as the input data.
Dwaine Sievers, president of Agri-Business Consultants in Cambridge, Wis., uses the FINPACK program. The secret to working with FINPACK, he acknowledges, is getting accurate input information. (See related story on page 67 on enterprise analysis.)
Most planners consider a producer’s past performance to be the best indicator of future performance.
- When you begin the business planning process, you need to realize that it may or may not result in a full-fledged expansion. Not everyone is cut out for expansion. For instance, some planners won’t recommend that a client undergo a full-fledged expansion (including the building of new facilities) unless that client is already producing at least 22,000 to 23,000 pounds on a rolling herd basis.
- Once the plan is done, embrace it as your plan. Use it as a road map to success.
If you would like to have a business plan completed for your dairy, but don’t know who to call, try the following referral sources in the top 10 dairy states:
-California: One of the CPA firms that work with dairy farms, such as Sousa and Company, phone: (559) 687-2727, or Genske, Mulder & Co., phone: (909) 627-7381 or (559) 687-2444.
-Wisconsin: Dairy 2020 Initiative, phone: (608) 266-7370
-New York: Dave Stafford, Farm Credit of Western New York, phone: (800) 929-7102.
-Pennsylvania: Business Planning Assistance Program, Pennsylvania Dairy Stakeholders, phone: (717) 948-6328.
-Minnesota, Lee Gross, Stearns County extension, phone: (320) 255-6169.
-Idaho: One of the CPA firms that work with dairy farms, such as Dodds & Associates, phone: (208) 733-7575; Cooper Norman & Co., phone: (208) 733-6581; or Smith Cook & Co., phone: (208) 324-2351. (Some Idaho producers also work with the California firms listed above.)
-Washington: One of the CPA firms that work with dairy farms.
-Michigan: Sherrill Nott at Michigan State University, phone: (517) 353-4522.
-Texas: Joe Outlaw, Farm Assistance Program, phone: (409) 845-3062.
-New Mexico: One of the CPA firms that work with dairy farms.