According to farm-management experts at Texas A&M University, when done correctly, enterprise budgets can help you manage your operation better by identifying the following:
- Which enterprise or enterprises contributes the highest return to fixed resources.
- Amount of labor needed.
- Amount and types of equipment needed for your combination of enterprises.
- How to best use your equipment on available land and facilities.
- Amount of operating capital needed.
- Production practices to use.
- Areas where you may cut cost or become more efficient.
- Breakeven prices and yields.
- Level of risk exposure within enterprises.
This information can then be used to develop marketing strategies, obtain financing, get help with cash-flow estimations, and make other key farm business decisions.