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What is Whole Farm Analysis?

Whole Farm Analysis is about clearly seeing where the business and the property are currently. This gives you a benchmark for future comparison and a measure of the needed improvements..

Try to quantify each aspect. A qualitative statement can be misleading when someone else is trying to evaluate the results later – “good” for you will be different for them. Define and use a 1 to 9 scale if the value is qualitative.

Add a description if the value needs further explanation.

Table of Contents

The Farm as a Business​

The primary strategic goal is to grow the business to maturity.

Why benchmark?

Once you have completed a thorough evaluation of the business and the property, record the results for comparison next month, next year, in five years.

You can only manage what you have measured.

Make it complete because your questions in the future will be different to those you have now. The lack of data can be frustrating as well as costly due to lost opportunity.

Benchmark KPIs and Metrics

Generally speaking a Key Performance Indicator (KPI) is a ratio and a Metric is a quantity. For example, cost per kilogram is a KPI and kilograms produced is a Metric.

Every business needs different measurements to capture a snapshot of its performance. Because a KPI is a ratio, it is independent of volume. When charted over time, it provides a very useful view of a trend toward or away from efficiency. Try not to duplicate your values – i.e. cost per kilogram produced vs kilograms produced per dollar – different measures but you will rarely need both.

I had an uncle who managed a large motel. He noticed a change in the ratio of meat purchased each month over the number of guests each month which led him to discover that the staff were stealing his T-bone steaks. Ratios can be quite sensitive.

Benchmark Accounting Reports

Accounting Reports contain a mother lode of information. A comparison of the same report over time can illuminate many trends and changes.

They can engender management practices that make your business Clean, Efficient and Profitable.

Benchmark Business Performance

Business performance is a function of experience coupled with a knowledge of season and market forces. A chart of business performance KPIs coupled with a timeline of events can be very informative.

Benchmark Production Performance

Measure as many aspects of your business as you can. Production performance coupled with a timeline of events can also be very informative.

Benchmark Marketing Performance

Marketing Performance is slightly more esoteric, but is critical to the success of the business. In retail vernacular, “Marketing brings them in the door and Sales hook them”. For a rural enterprise, it means how many people know about your farm and what it produces. Do you have a reputation for quality?

Benchmark Sales Performance

If your marketing has been done properly, your sales force – likely you – will have an easier job.
Record all sales, what, when, where, to whom and how. This is not just for the benefit of the accountant. When examining your sales figures, look for trends and seasonal activity. This can lead you to sell at a premium time of the year.
Do not schedule your lettuce or tomatoes all in high season when everyone else is trying to sell theirs.
These generally show as an inverted Bell curve with higher prices at each end of the season when lower numbers are available. Check when the premium prices are available.
Ask yourself “how do I prepare my crop for this time“. This is possible even when growing fruit – choose your varieties with the market in mind.

Farm Benchmark SWOT Analysis

Now we extract the value from the benchmarks done.
How useful is the benchmark you have created? What are its Strengths, Weaknesses, Opportunities and Threats? For each line item, include a strategy to gain the most benefit from the analysis.

What is the State of the SOP?

A business that has comprehensive Standard Operations Procedures has a strong advantage. It becomes  process dependent which is role based rather than person based. The Role is the task set to be completed, the person assigned the role – it is quite possible to have multiple people in a role.
This frees management to work ON the business rather than IN it – proactive vs reactive management.
A good SOP reduces training time and enables staff to be multi functional.

Problems with the Land

Most properties have features that are less than optimum.

Some of these are amenable to change – a dam here, a road there, a shelter belt down that fence, some erosion in that creek etc. That rocky knob is less changeable, but with thought a great use can be discovered for it – maybe a tank to gravity feed water to the lower parts of the property.

List these to find solutions when doing the farm design.

The Management Team​

An honest (and private) appraisal of the management team is important. What are their strengths and weaknesses, their knowledge and understanding levels, their likes and dislikes, their goals and aspirations?

Management Team SWOT Analysis

Create a SWOT analysis for the management team and a strategy to manage each line item.

Resources​

What resources are available? This will include things like:

  • Knowledge and Experience
  • Abilities of your staff
  • Finance
  • Stock on Hand
  • Time Available to Work

Take Stock of Your Resources

An honest (and private) assessment of the resources available to you can highlight directions to avoid or approach.

Resources SWOT Analysis

Create a SWOT analysis of your resources to understand better whether they are a risk or a bonus.

Assess Individual Resources

It is important to understand and acknowledge the strengths and weaknesses of your people. This is not judgement. Placing someone in a position where they are not suited upsets the person, reduces their effectiveness and so, damages the business.

Include things like physical ability, mental capacity, knowledge, understanding, patience, skills and maturity in your evaluation. An orchestra needs a range of instruments just as a business needs a range of skills. You are the conductor.

Do not use a piccolo to make a BIG sound – that is what the trombone is for. Similarly, throwing people in the deep end is risky – it can damage them and the sub-par result will not help the business.

Some people just do not have the temperament to sit for hours in a tractor droning around and around a paddock. Others quite enjoy the thinking time it provides. Others are better at management, sales or administration. Each have differing levels of leadership ability.

There is a vast difference between a leader and a manager – Know your people.

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