Management skills of high performing farm business managers
Similar farms facing the same market conditions can often generate vastly different returns under different owners as management expertise can be a key driver of profit. There are some common behavioural traits of managers of top performing farm businesses which also lead to higher profitability. In general, they are good planners and organised. They review budget to actual expenses/yield regularly through the season and adjust plans accordingly. They are tactical decision makers and are focussed on return on investment when making expenditure decisions.
DPIRD and GRDC commissioned Planfarm to write two reports, 'Bridging the Yield Gap, a survey of high profit farmers, 2011' and 'How to farm profitably in the Eastern Wheatbelt, 2014' which compared the management strategies of the top 25% most profitable farm businesses to the average. Some key behaviours and characteristics of the most profitable farm manager mentioned in these reports are summarised below. WA’s top farm business managers:
Plan and prepare
- are focused on getting big decisions right
- are good planners and able to convert planning effort into well organised and efficient results
- make key decisions on large capital items outside pressure periods
- are well prepared for key operational tasks
- have a very integrated approach to farming that matches their property
- have training and succession plans in place.
Are analytical decision makers
- Are disciplined on financial and operational management practices with a focus on budget/cost control and return on investment.
- Are in control of their business, can accurately assess the impact of a decision and therefore can make and act on decisions rapidly. Planning assists this.
- Have the ability to match inputs to the season, may have similar yields to the ‘average’ some years but with lower costs therefore higher profits.
- Have a conservative attitude to risk and not early adopters of new technology preferring to wait to see if it suits their business.
- Are always listening for new ideas to improve business performance.
- ‘Don’t do it alone’ and they have mentors or close friends to bounce ideas off.
Have the following operational characteristics
- have good communication with family and staff
- are committed, are attentive to detail and do the job properly
- have passion for their business
- actively manage soil constraints and adopt integrated weed management systems.