The Farm CPA
Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
Sustainability Test - Part 2
Nov 15, 2011
We continue our sustainability test from yesterday.
Our company can withstand the financial impact of a "bad" job or lower than anticipated revenue and still comfortably absorb overhead expenses.
- Do you stress test your budget each year to see what your break-even point is? Have you locked in enough revenues to cover overhead costs including a reasonable wage for your services?
Our company has effective and consistent management tools as demonstrated by systems and procedures that provide financial controls and reliable information regardless of the personnel involved, size of job, or type of work.
- Notice words effective AND consistent. Some farmers are effective but not consistent. Others are the opposite. Do you view a budget as the necessary evil for the bank, or do you view it and a great management tool to be shared with all employees to get their emotional buy-in?
Our company is creating the next generation of management and leadership as demonstrated by an annual performance evaluation process that considers individual roles, opportunities for improvement, and career planning.
- Do you have formal feedback with your employees? Today's generation needs more consistent timely feedback that our generation probably got (although we probably needed it to). Are you providing training opportunities for your employees. As a CPA, I have to get at least 40 hours of education each year. How much do you provide to your employees.
Tomorrow, we will finish up the last three traits of a sustainable business organization including a farm. How have you done on the first six traits.