Managing an agribusiness requires a lot of planning. Even though a crop’s yield potential is affected by seasonal changes, without an effective farm planning, your farm’s potential can be drastically reduced – and so can your profits.
Running a successful farm also means controlling costs – and that requires successful finance management.
Here are 5 tips to cut costs on your farm.
1. Plan everything
Of course, not everything is predictable, especially in the farming business. However, it’s essential that you plan your agribusiness in order to control costs.
Never forget the basics: planning your investments, the crops you’ll grow, the space for each of them, the agrochemicals and other products you’ll need. Also: set money aside every month for a rainy day.
2. Keep records
It’s very important to keep a record of all the costs you have, like inputs purchases, equipment maintenance, farmland rents, administrative costs, etc.
This kind of record should be as complete as possible, including information like dates, suppliers, raw materials costs, consultancy fees, etc.
Thus, it’s fundamental that you keep your books as organized as you can, with full reports. This way, large expenditures in a given area can be spotted quickly and more easily corrected. The likely outcome? More profits.
3. Control all farm activities
Routine + organization = good results.
Try mapping out every activity you must do for each crop’s productive cycle. Also, maintain a daily record of farm activities. This includes product application, the number of hours your workers worked, etc.
Forget notebooks, though. Use software that allows you to record farm operations.
4. Manage your stocks
Agricultural commodities have a lot of influence on the total expenditure of a farm. Therefore, you should manage stock with great care to avoid waste and unnecessary costs.
Keep a record of all purchases of agricultural goods as well as the final destination they’re given.
5. Use technology in your favor
Technology can help any agribusiness owner when it comes to controlling costs – whether by allowing an easy record-keeping or by providing reports and insights.
Of course, you need to commit to using the software regularly and record all the relevant variables. But when you do, you’ll see the benefits.
It’s not easy, but controlling the costs of your agribusiness is an integral part of a responsible, efficient, and lucrative management.
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Photo: United Soybean Board
Article by The Agriculture Scientist (Portuguese)