Advice and Support

Talk to experts, other farmers and people you trust. Good advice and support can make all the difference because 'she'll be right' does not work when it comes to finances.

What do successful farmers advise?

We talked to farmers. When it comes to seeking business advice and assistance, here is what they recommend.

• Money management and on-farm activities take equal priority
• Build a support team around you - a farm management consultant, rural banker and Chartered Accountant are a good start
• Communicate regularly
• Keep learning
• Focus on your goals and when needed, get practical advice on how to get there
• Ask lots of questions from all sorts of people
• Do small amounts regularly and prioritise the time

How can support people help me?

Support people can provide an experienced, unbiased perspective and help you understand and plan how to guide your business to your picture of success.

Think of people who can help or give advice on:

• How to manage your finances
• Making on-farm management decisions
• Environmental management
• Employment advice
• Building, reviewing and monitoring your business plan
• Identifying business problems and opportunities
• Prioritising the way you use your resources
• Navigating difficulties as they come up
• Funding to support your business
• Connecting you with their, and other, networks.

Because when you’re head down in the day-to-day running of your business, it can be hard to see things with fresh eyes.

How do I set up an advisory team?

A huge amount of support available in the dairy industry, but how do you go about setting up a team who can support and advise you? Find out how to bring together an advisory team for your business.

Complementary roles - typically, an advisory team includes all the farm’s partners or owners; a Chartered Accountant, farm management consultant and a financial advisor or banker. At times, specialists like lawyers and technical experts may need to be brought in. It’s important everyone clearly understands their role.

Location - select a meeting place offering enough space for everyone to fit into comfortably that’s easy to access and distraction-free. This may or may not be on-farm.

Frequency - meet regularly and on time. Meetings should be scheduled as often as required to monitor the progress toward farm business goals. Typically, this is quarterly or in line with key times on the farming calendar.

Formality and structure - correctly documenting and organising meetings by setting dates in advance, creating an agenda and circulating notes helps keep everyone accountable and maximise the value of your meetings.

Agenda - a well-communicated agenda will keep meetings on-track and clarify each person’s role. Clearly define the purpose and desired outcomes of the meeting, and share this with everyone. Doing so will improve efficiency, set accountability, and keep everyone on the same page. Your agenda should allocate time for:

• reviewing previous minutes and actions
• updates on production
• reviewing progress on the strategic plan
• reporting against the budget for the last quarter
• projecting key targets, management practices and decisions for the coming quarter and full year
• discussing new business or opportunities

Rural lenders

Borrowing can be a major expense for an agribusiness; you should be prepared to invest time and effort into ensuring you achieve the best possible arrangements to suit your needs and circumstances.

Understanding borrowing money costs and the impact on your business and personal finances will give you peace of mind. Agribusinesses can borrow money from a number of different sources. Some lending institutions specialise in certain types of loans, while some provide a range of financial services in addition to lending money.

With rural lenders or banks, there are three key sets of criteria banks will look at when assessing whether to lend to you or not.

• Personal factors

  • Your character – are you trustworthy, competent, a person of high integrity, do you have a good reputation
  • Your financial and business track record
  • Any family history with the bank, the quality of your mentors, professional partners and other connections
  • Your personal goals
  • What sort of lifestyle you have
    
    

• Financial factors

  Viability is defined as “an assessment of a client’s ability to consistently maintain adequate levels of gross income to enable them to meet all the necessary expenditure including drawings, tax, debt servicing, principal repayment and plant replacement.”

  Financial factors may include:

  • Plans and objectives
  • Budgeting and cash flows
  • Control and systems, use of cashbook
  • Computer confidence and usage
  • Knowledge, advice sought
  • History
  • Understanding your business - balance sheet, business structures.
    
    

• Physical factors

  • Performance of stock and crops, stock condition and quality
  • Performance parameters to district averages
  • Management practices, work rate, work ethic
  • Timing of operations, decision making
  • Objectives, innovation
  • Level of knowledge, source of technical information and advice
  • Tidiness and pride, property maintenance
  • Organisation and planning

By understanding how a financier will assess you and your business, you will be more confident to have open and constructive discussions with them and develop a positive relationship with them. This is important, because lending institutions want to have confidence in the people and businesses they do business with.

Farm management consultants

It’s important to have a great consultant on the team. Here are some attributes to look for.

Integrity and a good reputation - trust, confidentiality and honesty are key characteristics for any relationship.

Technical knowledge across the farm system - look at the consultant’s qualifications, work references, farmer client references, accreditation, and training.

Willingness to work with a wider team and the openness/humility to ask others for help when necessary.

Empathy - understands not only farming but also farmers and rural communities.

Personal skills - an ability to listen well and consider what you’re saying before offering a solution. Having a natural rapport with your consultant will help foster a good working relationship.

Willingness to express their viewpoint - a good advisor will consider options and provide you with an objective opinion on your business and ways to improve.

Other farmers

In addition to having an advisory team, connect with other farmers for advice and support. Seek advice from others who share the same challenges.

Think about people you can relate to and trust. Sometimes only other rural people who share the same challenges can fully understand that aspects of running a farm business, are not like running other businesses.

Seaonal groups

Attending and contributing to your local seasonal group is another great way to connect, learn and get advice and support. Visit the events section to find seasonal groups near you.

Getting communication right

How and how often you communicate with your farm team and stakeholders will vary from farm to farm. Open communication benefits you, your business, farm team, and stakeholders.

Set up regular meetings or phone calls to share key information (e.g. cash management programmes, budgets, production reports).

Getting communication right:

• Ensures no surprises - everyone in the farm team is on the same page
• Provides clarity - to all stakeholders and facilitates wider input
• Reduces conflict - through open communication
• Mitigates risks and potential issues
• Captures opportunities
• Reduces mistakes and wastage
• Provides a sense of ownership - get the farm team's ideas.

Business learning and training opportunities

Profitable farmers are often lifelong learners. Top farmers value learning and attend conferences, short-courses, discussion groups, seminars and invest in their future by undertaking formal training.

Informal learning opportunities

Many industry groups and service or support organisations offer seminars, workshops, and short-courses to help you grow your business management skills.

• Dairy events
• DairyNZ events

Formal training providers

Primary ITO, polytechnic institutes and universities offer agribusiness and farm management training that will help you to succeed in farming. For more information on training providers follow these links:

• Dairy Training Limited
• Primary ITO
• Massey University
• Lincoln University
• Telford Rural Polytechnic
• Taratahi Agricultural Training Centre

Talking Dairy podcast: episode 34

As a dairy farmer, how do you go about choosing an accountant who truly understands your specific needs and challenges? How can you take full advantage of their knowledge and expertise? And what are some common mistakes rural accountants see farmers making, and on the flipside, things farmers are often good at in this area? Answering those questions and more in this episode is Nigel McWilliam, chartered accountant and director at MBS Advisors in Morrinsville, Waikato. Nigel is a dairying specialist accountant and is also a director shareholder of a 1200-cow farm in North Otago.