Together with a colleague, Rod Ashby, we have written the 350 page book "Financing Your Farm", 4th edition. The book is published by the Grain Growers Association and the Australian Bankers' Association and was launched at Parliament House in November 2006. The book can be purchased from the Grain Growers Association at
www.graingrowers.com.au for $29.95, but is provided free to to clients of Alan Blackburn and Associates Consulting in 2010, and to participants in two, two-day course we run,
"Achieving Success in Farming in a Risky World” and “Planning to Success in a Changing Climate”.
Even if I say so myself, it is a great reference for all professional farm managers. It is printed in full colour and although it contains a lot of detail, I think you will find it an accessible and enjoyable read.
TABLE OF CONTENTS
PART I PLANNING TO SUCCEED
CHAPTER 1: PLANNING TO SUCCEED
1.1 Why plan to succeed?
1.2 The planning process
1.3 Business plans should embrace the whole farm business
1.4 Structuring your business plan
1.5 Measuring success
1.6 How to prepare a plan
CHAPTER 2: HOW TO ASSESS AND MANAGE FARM BUSINESS RISKS
2.1 Introduction
2.2 Making risky decisions
2.3 Strategies for dealing with risk
2.4 Managing farm risk
2.5 Price risk management instruments for farmers
Appendix 2.1 Hedging with cattle futures
Appendix 2.2 SWAPs help hedge future trades
CHAPTER 3: DESIGNING APPROPRIATE BUSINESS STRUCTURES
Section 1 Choosing business structures
3.1 Introduction
3.2 Choice of business structure – key principles
3.3 Options and key features of different legal structures
3.4 Asset protection
3.5 Succession and estate planning
3.6 Structuring assets for business success
3.7 Case study examples
3.8 Conclusion
Section 2 The legal and taxation features of legal entities
3.9 Legal features of different legal entities
3.10 Legal entity choice and income tax
CHAPTER 4: SUSTAINABLE LAND MANAGEMENT
4.1 Introduction
4.2 Forces driving change
4.3 Principles of sustainable Natural Resource Management
4.4 The economic benefits of sustainable land management
4.5 Planning for sustainable farming on your farm
4.6 Designing a sustainable farming system: your challenge
PART II ACCOUNTING FOR FINANCIAL MANAGEMENT
CHAPTER 5: THE IMPORTANCE AND USE OF STATEMENTS OF ASSETS AND LIABILITIES
5.1 Introduction
5.2 Balance sheets for tax purposes
5.3 Assets and liabilities – for companies
5.4 Assets and liabilities – for management and financiers
5.5 Analysis and uses of a statement of assets and liabilities
5.6 A financier’s perspective
5.7 Different uses of the assets and liabilities statement
CHAPTER 6: HOW TO PREPARE AND INTERPRET CASH FLOW
6.1 Introduction
6.2 Important features of cash flow reports
6.3 Steps in cash flow budgeting
6.4 Example of the budgeting process
6.5 Interpreting the cash flow budget
6.6 Concluding comments
CHAPTER 7: HOW TO ASSESS FARM PROFIT
7.1 Introduction
7.2 Defining and measuring profit
7.3 Preparing profit and loss statements for management
7.4 Estimating tax profit from a forecast cash budget
7.5 Preparing historic profit and loss management accounts from actual cash records
7.6 The profitability of enterprises
7.7 Interpreting profit and loss statements
7.8 Conclusion
PART III STRATEGIES FOR IMPROVING VIABILITY AND PROFITABILITY
CHAPTER 8: ASSESS AND MANAGE FARM VIABILITY
8.1 Farm viability
8.2 Factors affecting viability
8.3 Understanding how farms become non-viable
8.4 How booms and busts impact on viability
8.5 Managing yourself during a farm financial crisis
8.6 Strategic planning for viability
CHAPTER 9: EVALUATING ALTERNATIVES FOR IMPROVING FARM PROFITABILITY
9.1 Introduction
9.2 Evaluate the market outlook for suitable industries
9.3 Evaluate the projected profitability of crop enterprises
9.4 Evaluate the projected profitability of livestock enterprises
9.5 Decide scope for improved productivity and profitability
9.6 Decide capital ownership options
9.7 Putting it all together: Ways of improving farm profitability
Appendix 9.1 Gross margin: Self-replacing Merino flock, 21 micron
Appendix 9.2 Gross margin: Beef enterprise producing vealers, Autumn calving
Appendix 9.3 Growth at compound interest
Appendix 9.4 Present value of a future lump sum
Appendix 9.5 Loan pay-back fractions
CHAPTER 10: MINIMISE FARM COST STRUCTURE
10.1 Introduction
10.2 Land ownership costs
10.3 Reducing overhead costs
10.4 Buying machinery compared to using contractors
10.5 Variable (enterprise) costs
10.6 Putting it all together: Ways to minimise costs
CHAPTER 11: INVESTING OFF-FARM
11.1 Introduction
11.2 Why invest off-farm?
11.3 Returns from agriculture over time
11.4 Comparing farm and off-farm investment
11.5 Types of off-farm investment
11.6 The importance of superannuation
PART IV OBTAINING AND MANAGING FARM FINANCE
CHAPTER 12: SOURCES OF FINANCE
12.1 Introduction
12.2 Financial institutions supplying farm finance
12.3 The features that define a loan
12.4 Ways of obtaining loans
12.5 Matching finance products to farm business needs
12.6 Special sources of finance
Appendix 12.1 Farm Management Deposits
CHAPTER 13: THE COST OF FARM FINANCE
13.1 The relationship with your lender can affect business costs
13.2 How loan structure affects the cost of finance
13.3 Understanding and managing your lending margin
13.4 Comparing loans using effective rate of interest after costs
13.5 Putting it all together: How to reduce your cost of farm finance
Appendix 13.1 Blank form for comparing loans on their effective rate of interest including costs
Appendix 13.2 Calculation of exact effective rate of interest after costs
CHAPTER 14: HOW TO PREPARE A CASE FOR A LOAN
14.1 Introduction
14.2 The financier – farmer relationship
14.3 Risk management and the safety factor
14.4 The structure of loan applications
14.5 Example loan applications
CHAPTER 15: WORKING WITH YOUR FINANCIER
15.1 Introduction
15.2 Managing the relationship
15.3 Financier’s evaluations of a loan application
15.4 Preparing for the interview
15.5 The interview
CHAPTER 16: CONTROLLING FARM FINANCE
16.1 Introduction
16.2 Steps in financial control
16.3 Systems of keeping farm records
16.4 An example of financial control
PART V KEYS TO SUCCESS
CHAPTER 17: MANAGING TO ACHIEVE A VIABLE AND SUCCESSFUL FARM BUSINESS
17.1 Introduction
17.2 What is success?
17.3 Success involves managing change
17.4 Business success involves growth in wealth
17.5 Characteristics of successful farmers
