Financial Business Management
In terms of business management, 'finance' is generally defined as the management of money, credit and investment in an enterprise. It primarily involves providing the funds for the business's activities, and balancing the potential risk and profitability of an enterprise.
A new business or a new enterprise on an existing farm will require money to start up. Then once the business is trading, money will be needed to pay bills and keep the business running, particularly for investment in new enterprises or for the business to grow.
Keeping track of the returns (or 'output') from the business and the costs it has to pay is essential for the effective management of a farm business's overall finances.
There are several financing options for farm businesses, depending upon individual circumstances. If money is not readily available from within the business itself, it can be borrowed from banks and other institutions, or from family and friends, or outside investors or business partners could be sought.
Grants and other government support may also be available, particularly for new entrants into agriculture, or for a limited range of farm improvement projects. Other options for restructuring an enterprise could include contract or share farming agreements, or the formation of a partnership.
Planning for the future of the business, by formulating a business plan and thoroughly investigating and planning any business investments are essential management tasks for the future profitability of any farm.
DairyCo has a range of tools to help you achieve maximum efficiency and performance by managing costs and analysing productivity through effective management accounting.