The rise of zombie businesses: Why it’s no time for reckless trading
In the depths of the boom/bust cycle that started with Covid, businesses are doing it tougher than they...
It’s fair to say that our agribusiness team sees a variety of results from farming clients.
Time to read: 5 mins
We’ve identified several common characteristics with our most successful farmers and here we look at those attributes and why they contribute to the effective operation of top businesses.
You could call it having their thumb on the pulse or being in touch with their gut feeling. In short, they’re good at noticing and acting on subtle changes. They have this awareness both on-farm and within the industry.
If you want to grow, you have to be able to trust people. Many struggle to lead a team and can’t get past the “I’m the owner and I have one or two staff” mind-set.
Train them in how you like things done, then trust that they’ll do it.
This follows on from the first two points. Having their “thumb on the pulse” means top farmers tend to be good decision makers. Even a bad choice is often better than stalling on a decision and then having little to no input into the outcome. As they say, no decision is still a decision.
Inspirational author Simon Sinek will tell you that everyone who cares to look can see WHAT you do, and in many instances HOW you do it – but no one but you knows WHY you do what you do. Most farmers aren’t short on passion – family, land, animals, dogs, way of life, experiences for kids etc – which is likely a big part of their WHY.
Top performers often have a broader context – it often looks far beyond their farm gate and at the bigger picture. It encompasses the industry as a whole, the people and the product as well as a strong sense of guardianship or kaitiakitanga.
Top farmers understand profit. That means keeping a close eye on your business-specific KPIs and benchmarks, allowing identification of areas that can perform better.
Profit is made up of three components – production, sales and cost control. Every action taken in business has an impact on your bottom line. Conscious decisions protect profits, so the result is a plan, not an uncontrolled outcome.
It’s important to understand your balance sheet and appreciate that it’s a long game. Wealth creation comes from capital growth as well as retained profits. What can you do to improve the value of your business? Get out of bed thinking “how can I make money” not “how can I save money”.
Resiliency can broadly be viewed as three prongs in the world of farming:
Financial: Can you weather the storm? Have you built a business with a strong balance sheet that can handle the volatility of farming business cycles, with a downturn every seven to eight years on average?
Mental: How well do you cope with adversity? Do you have tools in your toolbox to be able to deal with the highs and lows that come with farming? Do you have a support network?
Farming system: Is your farming system flexible? Do you have summer cropping regimes? What have you got up your sleeve to deal with adverse weather events?
Remember that 80% of your results will come from 20% of your effort – nail that and don’t lose sleep over the rest. Invest your remaining time and effort turning another aspect of your farm into something productive.
The best leaders recognise their weaknesses and fill the gaps with other resources. That includes seeking advice from agribusiness specialists – build your team of trusted advisors.
It is better for the industry as a whole if everyone does well, so lifting others up, being open to learning and sharing knowledge are core concepts to remember.
Our advisors tailor services to your needs, with a range of agribusiness solutions covering accounting and tax compliance, governance and business growth, succession planning and structuring, and more. Contact us today to discuss how we can help.
DISCLAIMER No liability is assumed by Baker Tilly Staples Rodway for any losses suffered by any person relying directly or indirectly upon any article within this website. It is recommended that you consult your advisor before acting on this information.
Our website uses cookies to help understand and improve your experience. Please let us know if that’s okay by you.
Cookies help us understand how you use our website, so we can serve up the right information here and in our other marketing.