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Five Best Practices to Follow

Dr. David Kohl
Educational Opportunities: 
Young, Beginning Farmers
Home > Education & Events > March 2018 > Five Best Practices to Follow

Hi, I'm Dr. Dave Kohl, professor emeritus and academic hall of famer at Virginia Tech, Blacksburg, Virginia. The other day, one of the producers at an event in the upper Midwest asked me, “what are five practices that are beneficial, given the economic environment that we have today?”

Well number one out of the chute is cash flow planning and monitoring. As a matter of fact, 80% of a business plan is doing your cash flow, because you have to think about production, finance, marketing, risk management, and putting your system together. The key is to monitor that cash flow with your lender or advisory team, and one of the things that you'll do is continue to make little tweaks throughout the year.

Second, as I've mentioned, meet with your advisory team or your agricultural lender on a quarterly basis. That outside set of eyes can really provide some valuable insights on strategies and tactics that could possibly be utilized in your business. The other thing I think is extremely critical in this economic environment is to establish your goals around business, family, and personal and then put them in writing.

It is important that each one of the partners in the business does the same, to make sure that you're all seeking to head in the same direction and can maintain that focus. Another critical element is to develop a family living budget. One of the things that we're often times finding, is that there's too many people living out of the business, in other words, the business isn’t the size and the scope to be able to accommodate all family members and family living budgets. By evaluating and paring down those expenses will be critical to your success.

Finally, take some time for yourself. I would encourage you to keep your physical activities up, also take time to read, but also, be sure to take time to step back and realize the blessings you have in life.
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