Strategic planning is well worth the effort

Creating a clear road map can put your ag business on track for growth and opportunity

Today, tomorrow and next week, you’ll be focused on the day-to-day demands of your farm, ranch or processing facility. You’ll be thinking about the weather, your herd, equipment repairs or planting. You’ll be preoccupied with transportation challenges, labor and water availability, expenses, net income—and the list that grows as spring arrives.

But when was the last time you took your eyes off the immediate future and took a critical look at whether you’re on the right path for growth or long-term success?

Strategic planning is a tool that allows you to take that critical look. It’s the process of setting a direction for your business, of developing a clear road map for where you want your business to go. It’s analyzing who you are today, where you are, what future opportunities you can pursue, and how to set realistic goals and objectives to accomplish those. It’s a tool that helps your team focus its efforts on meeting those goals.

Farmers and ranchers who put off creating a strategic plan may say they’re already busy enough. Or they don’t know where to start. Or they’re reluctant to dig deep into difficult discussions or possible change.

Rather than look at a strategic plan as one more chore on your already demanding list; however, think of it as a way to put you on track for success. A strategic plan is important. It will prioritize your efforts for the future. It’s how you will answer questions such as:

• Should I bring in the next generation or not? How do I do that?

• What are my growth opportunities and what mechanisms will help me pursue them?

• Should we diversify and, if so, how?

• What business stage am I in and how do I get to the next phase?

• How do I acquire and retain the best team?

• Should we sell, buy or rent more land?

• Should we get out of the business?

These are daunting questions and finding answers can take work. That’s why it’s best to begin with an outside facilitator, someone who’s an expert in helping businesses create strategic plans. Once they’re on board, they become your coach who will guide and support you while making sure you complete your strategic plan.

Basic steps to a strategic plan

Here are some steps to creating a successful strategic plan:

1. Identify your purpose. Hone into your business’ vision and mission by answering these basic questions:

• What do we do and where do we do it?

• What geography will we serve?

• What markets will we target?

• How much risk should we take?

• How do we measure success?

• Where and what do we want to be in one, three and five years?

2. Determine who should be at the planning table. In creating a strategic plan, you need the right people who can weigh in with the right information. Include key stakeholders, whether it’s family members, key employees, maybe even your banker or certified public accountant, to help define what success for your operation looks like.

3. Establish clear and measurable targets. In the strategic planning process, you’ll set goals and specific actions to get you to where you want to be.

4. Execute and follow through. Put processes in place to ensure the determined tasks, actions and goals actually get completed.

Once the process is done, you’ll have a clear idea of where your business is going, who will be involved and how you’ll achieve your goals. Your strategic plan may take form on Google Drive or in a three-ring binder. Whatever form, it will lay out your vision and mission statements, your goals and objectives and an action plan. And because it’s a living document, it will include details on how often the strategic plan will be reviewed and updated.

I like the idea of further condensing your strategic plan into something you can carry in your pocket. That can be something as simple as a card that reaffirms and reminds you of your long-term goal.

This year, make a commitment to determine where you’re going by developing a strategic plan. Force yourself out of your day-to-day mindset. Schedule time to think about the future of your business and how you’re going to get there. It will be well worth it.

Editor’s note: Maxson Irsik, a certified public accountant, advises owners of professionally managed agribusinesses and family-owned ranches on ways to achieve their goals. Whether an owner’s goal is to expand and grow the business, discover and leverage core competencies, or protect the current owners’ legacy through careful structuring and estate planning, Max applies his experience working on and running his own family’s farm to find innovative ways to make it a reality. Contact him at [email protected].