Farm Business Planning

Marion Simon - Kentucky State University

Unit Objective

After completion of this module of instruction, the producer should be able to state the need for a written farm mission statement and the purpose of a business plan, plus distinguish between tactical and strategic planning. The producer should be able to distinguish between direct and indirect costs and between cash inflows and cash outflows. The producer should be able to conduct a SWOT Strategic Planning Analysis of the individual goat farm. The producer should be able to complete all assignments with 100% accuracy and score a minimum of 85% on the module test.

Specific Objectives

After completion of this instructional module the producer should be able to:

  1. State why farms need a written mission statement.
  2. State the purpose of business planning.
  3. Distinguish between tactical and strategic planning.
  4. State the ingredients, conditions/facts that make a SMART Goal.
  5. Define SWOT.
  6. Identify all resources that are available for use on the goat farm.
  7. State the purpose of an up-to-date resource inventory.
  8. State the objective of SWOT Analysis.
  9. Distinguish between direct and indirect costs.
  10. State how business transactions can be classified.
  11. Distinguish between cash inflows and cash outflows.
  12. Identify the components of a cash flow statement.
  13. State the difference between an income statement and a profit and loss statement.
  14. Identify the three components of the balance sheet.
  15. State the two methods used to value the assets of an operation.
  16. Distinguish between financial position and financial performance.
  17. Identify the five categories of financial measure and ratios.
  18. Distinguish between current ratio and working capital.
  19. Match the ratios to measure financial solvency to the correct definition.
  20. Define profitability.
  21. Conduct a farm resource inventory.
  22. Conduct a SWOT Analysis of the individual goat farm.
  23. Evaluate the financial conditions of a goat farm.

Module Contents

  • Farm Business Planning
  • Role of Farm Business Planning
    • Farm planning goals
    • Review questions
  • How to Create a Farm Resource Inventory
    • Resource inventory
    • Review questions
  • How to Do a SWOT Analysis
    • Identify Strengths and Weaknesses, Opportunities and Threats
    • Strengths
    • Weaknesses
    • Opportunities
    • Threats
  • Farm Business Management and Farm Transactions
    • Farm business transactions classifications
    • Cash Flow Statements
    • Income Statements
    • Accrual Adjustments
    • Balance Sheet
    • Value of Operation Assets
    • Review questions
  • Financial Statement Analysis
    • Where to start?
    • Financial Measures and Ratios
    • Review questions
  • Conclusion
  • Suggested Assignments
  • Example Farm Business Planning Spreadsheets
  • PDF Versions

    You may download this module in PDF format.

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