Creating a budget for your farming operation may seem like a daunting task at first, but it can make a big difference in the profitability of your operation. You can choose to create a budget by hand, by using a spreadsheet, or you can use your farm accounting software to help you. Either way, the outcome remains the same: increased confidence in decision making and increased profits for your farm.
A budget provides guidelines to help you organize and control your financial resources and also helps you uncover your operation's strengths and weaknesses. Have you ever come face to face with a large purchasing decision, and then made that decision based more on emotional "wants" and not on the actual business need? If so, you are not alone. Unfortunately, this method of making purchases does not take into consideration every aspect of your farming operation. By setting up and following a budget, your purchasing and buying decisions can be made more confidently, and can keep your operation growing strong.
The process of managing a budget involves examining your historical data, to show you which areas in your operation are generating the most profit and which areas need attention. With this information you can easily make long-range projections and increase your profits through better decision making.
A budget also helps you gain control of your finances and gives you the tools you need to project future cash flow and helps you manage your assets and liabilities. A budget helps answer the "what if" scenarios such as buying more land, expanding a crop, purchasing new equipment, etc. Planning your future business strategies becomes easier with the information a well thought out budget can provide.
Creating a budget can provide smart decision making for your farming operation, which can lead to more confidence and increased profits.
There are so many little things that add up to big things, when it comes to going green. Here are some simple tips on going green that just about anyone can start up at the office.
Get a paper bin
Regardless of your job title, you are sure to deal with paper every single day. Maybe it’s trade magazines or company reports, or whatever else it is that lands and piles up on your desk in paper form. You might just be shocked how much you throw away, until you get a box or bin to collect the paper. Once the box is full, take it out the recycling bin. (Note: Be sure to shred the items you might even remotely consider confidential or sensitive.)
Replace water bottles with filtered water
You might think recycling your water bottles solves the eco- issue of drinking bottled water. But really, the existence of the bottle itself takes energy, transportation and raw materials. Drinking filtered tap water in a reusable container saves on bottles and cups, and can really make a difference for our environment!
Email documents instead of printing them
Most of us have documents to create, read and disburse in our jobs. Think about all of the things you print out when you could be e-mailing instead: financial documents, requests for time off, expense reports, meeting notes, price sheets, marketing pieces, and the list goes on! When possible, e-mail those documents instead of printing them. Many of them end up in the recycling bin or shredder anyway!
Sign up for paperless billing
Paperless billing is a little tough to start because we are used to having something tangible to organize and prioritize. However, using paperless billing can save on paper and energy. Don’t forget, it also takes energy to deliver the mail that contains your bills, etc. Sign up for paperless billing, create an organization system within your computer, and you will contribute greatly to helping our environment!
Ah, the 80/20 rule. I am sure that at some point in your business or personal life, you have heard of it. Also known as the “Pareto Principle”, this rule says that for many events, roughly 80% of the effects come from 20% of the causes. We do use this rule here at Red Wing Software within our software products. When applied to product inventory, the rule says that 80% of your sales are from 20% of your inventory items. Knowing which items of the 20% are garnering the most sales can be crucial to growing your profits. That's where ABC analysis can come in handy. An ABC analysis within your accounting program can show you which items are most profitable. Our accounting software offers ABC analysis, which is an excellent tool for businesses.
But all science and math aside, have you ever noticed that the 80/20 rule can also apply to real life? As I think of my life, I can think of a few examples of where this rule might apply. For instance, about 80% of my free time is spent watching hockey and transporting my son to games. Yet when I originally signed him up, I would have thought it to be much less time consuming. My son’s hockey really only constitutes about 20% of the ways I love to spend my free time. Therefore, my surprisingly full and hockey-packed free time fits with the 80/20 rule!
What are some examples of the 80/20 rule in your life? Answers need not be serious or technical.
I can still remember when the only way of reaching out to someone was by phone or mail, or in person. I know that many of you can too, even though the children in our lives are baffled when we tell them we had to actually just figure out plans ahead of time, talk in person, and sometimes, just wing it because we didn’t have a cell phone to call anybody. Of course, now there are cell phones, texting, e-mail, instant messaging, Facebook, and so many more ways of reaching people! Here are some unconventional (and also not too painful) ways to take advantage of today’s technology to stay in touch with your customers.
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E-mail a useful document
You can find an unbelievable amount of information on the internet for free, including case studies, white papers, marketing tips, research information, instructional videos and much more! The next time you find something that could be useful to one of your customers, send them that document via e-mail. It only takes a few minutes to send, and your customer will appreciate the fact that you thought of them!
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Invite them to connect.
Some of you are probably thinking, “This is not an unconventional way of communicating—it’s the norm.” But for some people, connecting via LinkedIn, Facebook, and Twitter is uncharted territory. A great place for a business to start connecting with customers on the internet is LinkedIn. LinkedIn is a network of business professionals and is a place where you can learn all about your customers (if they are members), meet new contacts, join industry groups, answer business related questions, and much more. It’s completely free, too. Visit www.linkedin.com to learn more. In fact, I’d love to be your first connection! Click here to see my profile and invite me to be your connection.
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Invite them to a trade show.
You are likely in an industry similar to your customer, so why not invite them to come along to the next trade show? If you are an exhibitor, some trade shows will pass out free passes for you to hand out to your customers. Take advantage of this, and provide your customers added value by letting them get in the doors for free. By the way, click here to view the Red Wing Software trade show calendar. If you are a customer interested in attending, we may be able to help. Send an email to marketing@redwingsoftware.com with a subject line of TRADE SHOW to learn more. Please include your customer name.