As we kick off the year, February is a great time to assess your farm’s financial health. By taking a close look at your business plan and financials you can determine if your farm performance is adequate and on a pathway to longer term sustainability. RFCS NSW recommends that farmers review these outputs with their locally based rural financial counsellor. RFCS NSW is here for farmers in the Central and Southern regions of NSW providing free, confidential and professional support.
How to assess your farm’s financial health in 2025:
- Conduct a financial analysis
A Budget for FY25 should have been developed for the farm business prior to 1 July 2024. Now we are just over the half way point in the cycle it is an appropriate time to measure actual expenditure and income against what was specified in the Budget. Differences between line items should be highlighted and explained. This provides a foundation for change.
- Set clear goals
Setting clear, actionable goals is essential for any farming business looking to grow and thrive. Often, we become so focused on the daily tasks that we forget to step back and plan where we want to be in the future. Based on the financial analysis we need to set SMART goals: specific, measurable, attainable, relevant, and timely to improve our farm performance. Whether it’s improving financial management, planning for succession, or balancing personal and professional needs, setting and writing down your goals is a powerful step.
- Review your business plan
A business plan shouldn’t be a document that you look at once and tuck away in the filling cabinet for the rest of the year. It should be something that you review regularly at least every quarter to make sure that the actions and targets you have set to achieve your goals are being delivered and achieved.
When reviewing your plan ask yourself:
- Are your expectations realistic?
- Have there been any significant changes in the market or your business that needs to be addressed?
- Are your priorities still aligned with your vision and goals for the farm business?
- Avoid falling into old habits
It can be easy to fall back into old habits, especially when times get tough. Whether it is putting off important financial decisions or ignoring cash flow issues, these habits can be detrimental for your farm business.
To avoid this, make it a priority to:
- Set clear routines: regularly check your financial statements, review your spending and keep track of outstanding debts.
- Delegate tasks: If you aren’t skilled in financial management consider working with a financial professional.
- Stay accountable: Hold yourself accountable by setting monthly or quarterly check ins to evaluate your progress on your financial goals.
- Get professional help when needed
Remember that you don’t need to face financial struggles alone. Contacting a professional earlier rather than later can help you avoid more serious financial issues down the road. Working with an accountant, financial advisors or RFCS NSW is valuable to get expert assistance that can provide insights and helps you make informed decisions for your farm.
Financial health is a continuous process not a one-time task. Stay focused, stay proactive and seek professional advice when needed to keep your farm business on track. Regularly reviewing your financial goals and business plan is key to long term success, making small adjustments now can save your farm business from bigger problems later.