Applying for your first loan with a new lender?
Jim Tollison Jr. of Alabama Farm Credit has some advice.
“If you’re a new borrower, it’s easier for your lender to see your vision and assess its feasibility if you’ve thought through your goals,” says Tollison, vice president and branch manager of the lender’s Talladega branch.
“Dreams are great, but they go away when you wake up,” he adds. “You have to set goals and work toward reaching them.”
Whether you’re a longtime farmer or starting a new ag operation, it’s important to regularly set and evaluate goals. Here’s what you need to do:
Think It Through
Take a hard look at your current operation and think through how you can make improvements, Tollison advises. Be prepared to put aside old ways and embrace new efficiencies to meet your goals.
Ask yourself: Where do I want to be in one year? In five years? How can I improve my operation? What are my priorities? How will I sell and market my product?
“Write down your goals, both short- and long-term,” Tollison counsels. “The more detailed, the more solid your business will be.”
“Put those written goals where you can see them, like on your smartphone,” Tollison says. “Set a reminder to review them in three months. Meeting those goals requires that you take short steps. If you’re not moving, you’re not making progress.”
Tie Goals to Financial Statements
When you meet with your lender, bring a detailed business plan along with projected financial statements that include long-term goals, says Yancy Murray, vice president and relationship manager with Legacy Ag Credit in Gilmer, Texas.
“Producers must be specific with what they hope to achieve in a certain timeframe and how they intend to do it,” Murray says.
Make Goals Measurable
“To determine when goals have been achieved, they must be measurable,” Murray says. “Detailed records are a way of measuring success or failure.”
Computer software can help track an operation’s expenses and income, “but the software is only as good as the information that goes into it,” he adds.
“Goals should be challenging, yet attainable,” Murray says. “Price volatility can impact profitability for any farming operation. So it’s best to research market conditions as thoroughly as possible when formulating a goal.
Rethink, Revisit and Re-Evaluate
Even with a solid business plan in hand, it’s no time to rest on your laurels, advises Dr. J. Mark Welch, Texas A&M AgriLife Extension economist and professor. To ensure continued success, you must regularly revisit, rethink and re-evaluate your objectives.
Welch also says to “… make a plan of action and be prepared to look back and see what worked. Then change whatever you need to improve.”
– Sheryl Smith-Rodgers