It is easy to get wrapped up in day-to-day decisions that keep your farm running well. Don’t let those short-term needs distract you from what’s needed for long-term viability and growth. Developing a long-term plan is key to the future success of your operation.
You will always face unpredictable factors, such as weather, markets and crop health. Without a long-term plan, you may find yourself being continually derailed as you react to each factor in the present. Solid financial planning helps you account for those hurdles and minimize their impact. You’re less likely to over- or underreact to the present when your sights are set on the future.
Long-term planning will also help you maximize net farm income, avoid unforeseen taxes and take advantage of new opportunities.
Short-term thinking alone is only part of the solution. Farming demands long-term financial planning.
Developing the plan
Think of your long-term financial plan as a map for your operation. Developing this plan will help your operation meet its goals and be successful in the long-term.
If you’re wondering where to begin, a key first step is forming a team of trusted financial advisers. Your team may include your banker, accountant, attorney, lender, landlords/tenants and other key members of the farming operation.