To navigate uncertainty – boost your business IQ
Like many careers, agriculture tends to be unpredictable. However, a solid business IQ can help navigate challenging times, and open the door to capitalizing on volatility, says David Kohl, professor emeritus in ag economics at Virginia Tech University.
Although having a high business IQ doesn’t guarantee success, “it puts the probabilities on your side,” Kohl says.
So, what exactly is a business IQ? Kohl, also the president of AgriVisions, defines its four cornerstones as the ability to plan, strategize, execute and monitor.
Knowing farm costs like cost of production makes it easier for producers to hit profit windows.
In other words, producers with a high business IQ diligently plan all aspects of their farm, use those plans to prioritize their strategies, execute on a mix of data, objectivity and intuition and periodically monitor their results, he explains.
Kohl rates knowing your cost of production as the most critical factor of business IQ. For one thing, understanding those costs makes it easier for producers to hit profit windows when they come along.
Kohl adds, cost of production is the area most in need of attention, particularly for multiple enterprise businesses.
Measure your IQ
Business IQs can be measured with Kohl’s 15 Critical questions. The assessment covers farm management topics, including creating goals, keeping a record system, maintaining a modest lifestyle, attending educational seminars and overall attitudes.
“Having this process in place takes you deeper into those four cornerstones,” Kohl says, pointing back to the ability to plan, strategize, execute and monitor.
Farmers score highest if they have written plans, and lowest if they have no idea.
“This is an area where you build on your strengths, but also identify areas to improve upon,” Kohl explains.
In his experience, farmers show a willingness to better themselves where they need to. He recommends they reexamine their business IQ annually, like an annual health check-up, to see if and where they’ve improved.
A solid business IQ can help farmers navigate challenging times by keeping a check on their ability to plan, strategize, execute and monitor various parts of their farm business. Keeping check on these four cornerstones shows farmers where they can improve their business IQ, experts say, and opens the door for an annual examination of the farm owners’ business know-how.
Article by: Richard Kamchen