Maybe one day you’ll tear your Achilles tendon, or break a leg or fall off a ladder. You’ll need surgery, or crutches or a long hospital stay. You could get sick for an extended period, leaving you unable to handle your farm or ranch responsibilities.
Business disruptions can happen at any time. These unplanned events can take many different forms—natural disasters, loss of key personnel, data breaches, economic turns or personal injury.
If you were injured, what part of your business operations would slow down or even cease? Think of it this way: If you had to leave for a month tomorrow, what on your farm or ranch is going to suffer?
Consider taking these precautions to protect yourself and your business in the event of your unplanned absence:
1. Who is in charge of business operations? Is there a second-in-command who knows what needs to be done each day if you are gone? It’s a good idea to make sure you have a backup who knows your cropping plan as well as your plan for livestock feeding or breeding. You’ll need someone who understands items such as fertilizer, chemical application or timing of turnout of breeding bulls, for example. We are fortunate in rural America that our neighbors will generally step up for us in time of need. But you make can make things easier if you communicate or write down a few things that others could rely on.
2. What about business contract issues? Are there others in your business familiar with the deadlines you have with Farm Service Agency and Crop Insurance? Make sure you have others in place to handle those issues if you could not.
3. What about your marketing plan? Do you have grain or livestock contracts that have to be delivered on in some future month? Do you have risk management positions in the futures market? Make someone aware of these issues or at least have a reliable person know where you keep this type of information.
4. Do you have appropriate insurance? Having the right amount of insurance is often a debatable question. But most will agree there is at least some relevant minimum amount of life insurance and health insurance that you should have. Don’t forget about other pertinent people in your farm or business. You may want to consider “key man” life insurance on yourself or a certain employee as well as business disruption insurance.
5. Don’t forget about your financial and accounting issues. What about bookkeeping and payroll? What about the stack of bills you were going to pay when you had a moment? Make sure you have some business protocols in place where your accountant and lender can work together if needed.
6. Make a list of key contacts. Include a short description of who they are and what your relationship is, so your spouse, neighbor or others can contact them. This could include your chemical/fertilizer dealer, broker, livestock purchaser or feed yard rep.
Acting now will help ensure that you’re prepared for an unexpected business disruption and go a long way toward protecting yourself, your family and your business.
Dennis Roddy is a Midwest-based agricultural consultant with K·Coe Isom. With more than two decades of experience in ag lending and farm management, as well as real-world farming and ranching experience, he is uniquely qualified to help farmers and ranchers operate profitably. Contact him at [email protected].
