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Best if printed in landscape. Questions on Discussing Goals (Appendix to Step 4 of Business Planning) A purpose of business planning is to assure that farmers fulfill their desires. All adult members of the business may want to consider the following questions as they review their goals. Likewise, married couples often discuss their ideas with each other to focus on their similarities and reconcile differences. Finally, farmers recognize the interrelationships among their personal and business goals. The following questions are intended to stimulate the thought process, but each question does not require a written answer or detailed thought. Many questions are followed with a second question of "why" because the reason for the thought is often as important as the thought. Personal Career Interests These questions ask you to think about the types of work/business activities that provide you the greatest personal satisfaction. 1. Do you consider yourself primarily involved in farming?
2. Why are you farming? (Check as many as apply.)
3. What do you want to accomplish by farming? 4. How long do you want to farm? Why? 5. What would cause you to discontinue your involvement in the farm business (such as employment opportunity, disability, death of spouse, divorce, higher production costs, lower commodity prices, increased land prices, others)? 6. Do you have any off-farm employment? If yes, what type? Do you want to continue this employment? For how long? Why? Do you want to quit your current off-farm employment? When? Why? 7. How much time do you want to invest in the farm business (e.g., full-time or part-time)? Why? 8. Do you want to further your education? What additional training are you interested in? When? Why? 9. Are you married?
10. In what type of leisure/recreational activities do you like to participate? Why? 11. Would you like to take a vacation in the next few years? What type of a vacation? 12. How much time off do you want during the next few years? How much time-off do you want 6 to 10 years from now? 13. Would you like to change your housing situation? What type of change would you like? When? Why? 14. Are you planning for retirement? ____ No
____ Yes
15. Have you developed an estate plan for yourself (such as prepared or updated your will)? Business Objectives 16. Do you intend that the farm business participate in government farm programs during the next 5 years? Why? 17. Do you want the business to be eligible to receive all government payments possible? Do you envision that all persons involved in the farm business will assume some financial risk? 18. Do you want to expand the business? If yes,
19. What additional enterprises you would like to add to the farm operation?
20. Why do you want to expand the business or add an enterprise (a financial need for a larger business, improve efficiency of assets, for personal satisfaction, other reasons)? 21. How will the expansion be financed (borrowed capital, sale of other farm assets, sale of nonfarm assets, farm earnings, nonfarm earnings, investors)? 22. Who will pay for the expansion? 23. How soon do you expect and want this expansion activity to pay for itself (one year, five years, 8 years)? 24. Do you want to reduce the business size or eliminate an enterprise? If yes,
25. Are there any property improvements you want to make (construct or remodel buildings, drainage, dams, replace some machinery)? What are they and why do you want to do them (to increase production, improve efficiency, for personal satisfaction)? 26. What type of production goals do you have for the business (increase yields, raise certified or registered seed, improve livestock production, other goals)?
27. What is the incentive or motivation for these production goals (financial need, personal satisfaction, other reasons)? 28. What type of return do you expect for replacing machinery (fewer breakdowns, less time to complete task, provide capacity so business can be expanded, do some custom work), storing grain (manage taxes, wait for better market, assure storage during harvest), backgrounding calves (increase value of produced feed, market a more desired product)? 29. The business is a success because_______________________________________________________. 30. What are your primary concerns for the business (too many equipment breakdowns, tasks take too long, not enough labor to satisfactorily complete tasks, cannot keep me fully employed year-round, no longer enjoy the work)? 31. The biggest problem facing the business is__________________________________________________. 32. What can be done about these concerns (and we cannot change the weather)? 33. The business would prosper if_________________________________________________________. 34. Is someone else involved in this business? If yes,
35. Do you want to help someone become involved in your farming business? If yes,
36. Do you want someone to help you become more involved in a farming business? If yes, what type of help do you expect?
37. Are you be willing to be part of a co-owned business? 38. For your farm property that is used in a co-owned business, do you envision paying for repairs or improvements to buildings, machinery, land (fences), or housing? Or would you expect the business to pay for such repairs? 39. If you pay for the repairs or improvements, do you expect additional compensation for those expenditures? If yes, in what form would you want to be compensated (increased rental payments)? 40. If the business pays for the improvements or repairs, will it be compensated? If yes, how would it be compensated (reduced rent, increased ownership interest in the improved or repaired property, compensation upon sale of asset)? 41. Do you want to increase your business ownership interest? If yes, when and how [contributing more labor, contributing more management, assuming more risk (borrowing capital or initiating another enterprise), contributing more assets (capital, machinery, buildings, land)]? 42. Do you want to increase the amount of assets you own? If yes, when and how (buying from co-owner, buying from unrelated sellers, receiving gifts)? If you want to buy property from your co-owner, which assets would you want to purchase, when would you want to buy the property, and how much would you be willing to pay? 43. Do you want to be sole owner of some farm assets? If yes, which assets (all of the property, land, machinery, livestock, farmstead, home)? 44. Are you willing to co-own some farm assets with your partners? If yes, which assets and for how long? 45. How much business debt are you willing to take on? Do you have the financial capacity to obtain that amount of capital? 46. What would happen to the business if you or a key person in the business became disabled?
Personal Financial 47. How much do you annually spend on each of the following categories at this time (and in total)?
48. What is the minimum amount of cash you annually need for each category (and in total)?
49. How much do you annually want to spend for each category (and in total)?
50. How much cash income do you earn each year from the following sources (and in total) that can be used to pay the expenses listed in the preceding questions?
51. How will your family living costs change over the next 5 years? Why will they change? Do family members want to further their education? Who? How? 52. How are your nonfarm sources of income likely to change in the next 5 years? Why will they change? 53. How are your family living costs likely to change 6 to 10 years from now? Why would they change? Do family members want to further their education? Who? How? 54. How are your nonfarm sources of income likely to change 6 to 10 years from now? Why would they change? 55. Based on the previous answers, what is the minimum amount of annual cash farm income (return over operating expenses from livestock, crops, and other enterprises) you can tolerate? 56. What is the 3-year minimum average annual cash and noncash farm income (return over operating expenses from livestock, crops, and other enterprises) you would accept from this business and still continue farming?
57. What rate of return on your farm assets and farm equity do you want? Why do you want that rate? 58. What percent of your gross income do you want as net returns? Why? 59. What debt-to-asset ratio do you want for your business by the end of this year? By the end of 5 years? By the end of 10 years? Why? 60. What change do you want in your total liabilities by the end of this year? By the end of 5 years? By the end of 10 years? Why? 61. What change do you want in your net worth by the end of this year? By the end of 5 years? By the end of 10 years? Why? 62. How much income do you annually want from the farm operation for farm and non-farm investments? 63. Based on the previous questions, what amount of cash do you want or need to annually withdraw from the farm business to meet your family needs and your expectations for the business? 64. Bottom line: Does the farm business appear to have the capacity to generate the level of income necessary to satisfy the previous answer for all owners of the business? You may not want or be able to answer this question at this time, but keep it in mind as you continue the planning process.
Last Updated April 1, 2005 |
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Email: David.Saxowsky@ndsu.edu This material is intended for educational purposes only. It is not a substitute for competent professional advice. Seek appropriate advice for answers to your specific questions. |
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