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Moneywise: Develop Your Flight Plan

February 5, 2011
 
 

Develop Your Flight Plan

Market prices and input costs are volatile, and the changes are extremely rapid. Sometimes you only have hours or even minutes to make critical decisions.

flightplanIt’s important to have a process in place to adjust to these changes in a timely manner, as well as the capacity to measure your results, says Chris Barron, director of operations and vice president of Carson and Barron Farms Inc., in Rowley, Iowa. Barron is also the author of a new blog on AgWeb.com called "Ask a Margin’s Expert."

"Just as pilots make a flight plan, agricultural producers need to do the same," Barron says.

Before a plane even leaves the ground, the pilot has a specific set of procedures and plans of action for most any situation; once in flight, pilots are constantly adjusting for changing variables.

"Think of the benefits a farming operation would have with these types of structured procedures," Barron says. He suggests four specific actions to help make a course correction in your operation.

Be Deliberate. "If you are deliberate in your decisions, you will have a predetermined plan for each specific or potential challenge you face," Barron says. Have Plan B already in your mind or in writing so when conditions change you already know what you will do.

Be Decisive. When you are decisive you are exercising discipline. For example, if you decide to sell 5,000 bu. of corn once it reaches $5.40, but change your mind when it reaches that price, be sure to ask yourself why. "It’s OK to change your mind, but it’s critical to understand why," Barron adds.

Be Accurate. There are thousands of tools to use in business management. "I’ve found that spreadsheets are an extremely powerful tool. If you have the ability to structure the numbers, you can remove much of the emotion," Barron says.

Be Immediate. Don’t wait too long to make a course correction. Don’t be afraid to make constant adjustments to your original plan and incremental improvements. Timing is critical and generally can provide the biggest payout.

For more information, visit Barron’s blog.


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FEATURED IN: Top Producer - February 2011

 
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