Use these three tips to help you get the most out of your bottom line.
Between extreme drought, record grain prices and fluctuating markets, one thing about 2012 is clear: It was a nail-biter of a year. How does one operate in such a volatile environment? Farm Journal columnist Moe Russell offers tips to help you achieve your business goals—and maximize your bottom line.
Focus on profit.
It's easy to equate size with profitability—the bigger the operation, the more successful it must be. But Russell warns that focusing on growth can get an operation into dire straits quickly. "My concern is that several generations of wealth could be destroyed if an operation implodes due to rapid growth," he says. "I feel strongly that growth should be the result of doing things right—not an objective." Read more.
Bulletproof your balance sheet.
Opportunities abound in agriculture, but with those opportunities come challenges. "To best manage your bottom line for the long term, you need to anticipate problems," Russell says. One way of making sure you'll be ready to ride out economic downturns is by analyzing your debt and building as much working capital as possible. Read more.
Diversify your business.
As the old saying goes, "Don't put all your eggs in one basket." Investing in different ventures, either on or off-farm, can help your operation stay afloat during hard times because all of your money isn't tied to one area. "It might not guarantee you won’t have a loss, but it will minimize your farming business risk," Russell says. Read more.