Skip to main content

Written plans help build farm’s financial strength

  • 2.5 min read

Building financial strength takes follow-through with made-to-measure plans, experts state.

Once growers are engaged in determining where revenues go and gain education in making money grow, they need to execute the plans they’ve formed to meet the goals.


“Don’t get too busy that you don’t take action,” cautions WomenCents founder Vanessa Stockbrugger.

The former investment banker acknowledges farmers are busy throughout the year, but if they want to improve their financial situation, they need to recognize the need to set time aside to work on it.

Before analyzing the situation and ultimately execution, farm owners should outline when the decision must be made and who should be involved, says Erich Weber, business finance specialist with the Ontario Ministry of Agriculture, Food and Rural Affairs.

“The best way to execute your vision, or ‘wish,’ is to have a written plan,” adds Heather Watson, executive director of Farm Management Canada.

Not only does a written plan provide certainty in an uncertain industry, it’s also the most effective tool for uniting the farm team around a vision for the future, Watson says.

She believes farms should ideally have a three- to five-year strategic plan, and a one-year operational plan that includes all aspects of the business, like marketing, human resources and financial planning.

Which two written plans you should ideally have and what you should measure in terms of your farm’s performance.

BDO Canada national agriculture industry group leader Mark Verwey stresses the importance of being able to financially measure any changes made to an operation.

“For many producers, one of your best sources of information is your debt/service ratio,” Verwey says. “This shows you how you are financing your existing debt and your ability to take on new projects/purchases with new debt.”


Stockbrugger says there’s no one-size-fits-all solution. Each grower has different biases and experiences to risk-taking and debt and is at different career stages.

“Don’t be paralyzed and not implement a plan because it doesn’t feel right. Find the plan that fits for you,” Stockbrugger says.

Weber points out that dealing with a decision that significantly impacts financial strength can lead to “paralysis by analysis,” potentially resulting in missed business opportunities.

There can be an impulse to compare yourself to your farm neighbours, but remember that each operation is different in numerous ways.

“Often the best benchmarks are your own data and how you have trended over the past three to five years,” Verwey says.

Adds Weber: “When making business decisions, you have to be realistic and know what your individual farm business circumstances are.”

Watson encourages growers and their teams to test their tolerance to risk in order to understand where everyone is coming from when deciding which action to take.

Bottom line

Building financial strength requires executing a comprehensive written plan, one that fits the experiences of individual growers and their operational situations. Avoid paralysis by analysis, experts say, and the impulse to compare the farm operation with a neighbour.

Article by: Richard Kamchen