Q: Why is it important to manage your farm’s financial risk?
A: “Regardless of what type of business you’re running, it’s important to know and manage your financial risk to know exactly where you stand on that net income or net loss spectrum. And once you figure that out, there’s so many different directions you can dive into to help you make business decisions.
It’s also important to practice this in a timely manner. If you wait and only evaluate this once a year, you may not notice a negative trend that occurred months ago. Plus, you may not even remember why it happened. So, it’s important to look at this at least on a monthly basis to understand where your money is going and coming from.
As farmers, we generally want to be out working with the cows instead of stuck inside doing bookwork. And unfortunately, this can be a confusing topic for some farmers to understand. If you start to notice red flags or are in need of assistance just to help you better understand the basics, reach out to your lender or financial consultant to help dive into the numbers and provide some feedback.”
Mary Faber runs her own business as a virtual bookkeeper for Mary T Faber Solutions based out of her home office in Pontiac, Ill. Growing up on her family’s 165 Holstein and Ayrshire Farm, Mackinson Dairy Farm, Mary not only learned how to take care of the cows, but also how to take care of business. Today, she specializes in helping agricultural businesses across the United States manage their finances. In her spare time, Mary can be found helping around the farm, feeding calves or taking care of her prize-winning show heifers.
