It is widely accepted that whilst 2022 certainly presented challenges across the South Australian agricultural sector, the opportunities that have arisen by good yields and good commodity prices will cause most to reflect on 2022 as a year that ‘was a good one’.
Using the good years to set your business up for future success is one of the key influencing factors that will set a business apart from its competitors or peers. Indeed, many businesses will make the worst decisions in the best of times.
One of the best things that a business can do following a ‘good’ year is to pause and sit down with their trusted advisors (who will be different to different people but may include a mentor, accountant, bank manager, business consultant, financial planner, solicitor, etc.), reflect on the year and review the numbers. From here, making an educated and informed decision for the next steps in consultation with those whose opinions and input you value will be one of the determining factors for long-term success. There should be no rush or time pressure to complete this process, and in fact, not being rushed should allow for more logical and rational decisions to be made.
By reviewing a business plan that considers the current financial position of the business, a business can start to use the good years to achieve the goals that have been long identified as important. A sound business plan will cover business goals for the short, medium and long term.
A business must ensure that they understand its statutory obligations and then try to best understand how they maximise its future success. Does the business pay down debt, look at growth opportunities, look at diversifying operations or asset classes, will be different in every case.
Having financial goals and budgeting can be the difference between getting ahead and going backwards. A good business will have a business plan that is reviewed and referred to throughout the year and refined or changed as required or as goals are achieved. A business that understands its key financial drivers and numbers, has a budget, and sticks to the budget, will make the most of a good season and truly set itself up for long-term success.
