Power in planning to grow ag businesses

KEY SPEAKER: One of the speakers who will be present at the workshops, Anthony Coates.
KEY SPEAKER: One of the speakers who will be present at the workshops, Anthony Coates. Tobi Loftus

THE old saying "best laid plans of mice and men” is as relevant now as when it was first penned in 1786, especially when it comes to laying out the future of a family grazing business.

However there is "power in being prepared”, according to the three key speakers at Pastoral Profit's upcoming seminar on Business Growth and Transfer in Longreach and Charleville.

Speaking from recent experience, retired grazier Anthony Coates AM is a strong advocate of putting your best effort into the planning phase and allowing plenty of time to bring the plan to reality.

"The early work we did with each other and on our plan really stood us in good stead when our five-year plan took closer to 10 years to execute,” he said.

"We all knew what we were aiming for, we all had something to look forward to afterwards and this made it much easier to be flexible when hurdles came up.

"We utilised a facilitator and a number of other advisors throughout the whole process. I think this made a huge difference to how things worked out. It kept us focused on what we really wanted and kept the momentum going during the challenging moments.

"The plan itself used a combination of leasing, staged herd purchase and a put/call option contract. It took some time to put together and required dedicated communication and co-operation from everyone, to ensure clarity on how the different elements would work.”

Leasing and other forms of collaborative farming open new prospects for those who want to grow as well as those who want to slow down.

John Whitfeld, of TSA Agribusiness, has been involved with leasing and collaborative farming agreements over many years and agrees that clarity on outcomes and expectations is crucial to success.

"Whether it is succession planning within a family or turning your land into a passive investment where others do the physical work, putting good business planning and systems in place can make it much easier for all to benefit,” he said.

As a land owner there is much to consider when offering part or all of your land asset out to lease.

John suggests that price is often the last piece of the puzzle to work on.

"Generally these agreements are longer term agreements and factors such as pasture management, livestock management, property maintenance, strategies for seasonal variation and services included or excluded need careful thought.”

In John's experience, how well you understand each other and get along together will often have a huge impact on the quality of the experience and on the financial return over time.

"Really knowing who you're doing business with is the most critical factor, no matter which side of the table you are sitting on,” he said.

When it comes to business growth or business transfer, Gordon Stone, of the Agribusiness Development Institute, encourages his clients to first consider things from a business perspective.

"Our focus is on the ultimate aim of building a high-performing, self-managing and saleable business.”

Gordon says this provides a unique discipline around the business plans for any business owner, irrespective of their sector.

"By focusing on that outcome, a range of possibilities are automatically created. One is to allow the business owner to step away from the business and have others run it for them.

"Another is to attract an investor into the business. Commonly, in agricultural enterprises, the investor is another family member, potentially bringing in another family generation.”

Often our greatest desire is to see the next generation build on the current business and take it to the next level.

By focusing on that ultimate aim of building a "high- performing, self-managing and saleable business”, Gordon says "generally you will be able to support and provide for the previous generations, if you approach it in an orderly and timely fashion”.

"A high-performing business that can run itself, is ultimately the most valuable there is, one that people want to invest in,” he said.

Topics:  seminar

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