In order to run a Freedom Farm or a business that can run without you, you must overcome any fear of losing control. You will need to become extremely comfortable hiring people (even people to pay your bills and manage your bank accounts) and then get out of their way. This is a really big constraint holding so many great farmers back. Many of you will think that if a job is to be done, it needs to be done by me. If you want to run a great business, this is the wrong mindset. The mindset to focus on is ‘Who can I find to do this job for me?’ Or ‘is there a system I can implement to do this job for me?’ This one small shift in thinking can speed up your rate of success by ten times! Be careful of allowing your fear of losing control to hold you back.
Andrew (Robbo) Roberts here. I helped co-found Farm Owners Academy with Greg Johnsson.
I’ve recently returned after 18 months off (I took some time out to deal with two little boys under 2). Here I am with my family – Oscar, me, Jamie and my wife Sonja (Sunny).
I will be sharing my experiences with you each week with a blog post, so please stick around as I want to add as much value to you as possible.
The focus of these posts is to help you realise the mission that sits behind Farm Owners Academy – which is helping you run a freedom farm.
A freedom farm is a highly profitable business that can work without you.
I feel I have a lot of experience in this area, as I have now built three companies that have achieved this.
But please note…I am still a student, still learning, and I am certainly not a know it all, but I do want to share some insights into how you can also create this for you and your family.
I love business.
For me, it’s a game (a very hard game to play).
I love the challenge of business, and I love the growth you can go through as a person. However, business really tests you and can knock your confidence if you are not careful, leading to excess stress and unhealthy patterns and behaviours (I’ve been there and done all of this).
But if you can master it, I believe you can really master your life.
Growing a great company gets you to look in the mirror and helps you look for ways to become a better person. And this is what drives me to keep coaching and helping you. It’s helping you become the person that you were born to be.
So I am going to start with my first tip.
A goal is simply a dream with a deadline.
If you want to run a freedom farm, the first thing you need to set is the date by which you want to achieve this goal.
For example:
It’s July 1, 2030, and our farm is running completely without me. We are profiting [insert your dream profit goal here], and I can comfortably take six months off to travel with my family [or you can change this part].
That’s it.
Have this written down, and stick it somewhere so you see it daily.
Don’t worry about how you will achieve this. You don’t need to know.
The goal is nothing but a stamp in the ground that now tells your brain you are on a journey to something great.
And notice how I have written this as though it has already happened? This is important.
You need to write down your goals as though you already have them. The more specific you are with your goal, the higher your chance of getting it.
Look out for the posts I will be sharing over the next few months.
We will be diving into the world of money and what holds you back from having all the wealth you ever thought was possible so you can live a happy and abundant life.
Thanks for being part of the Farm Owners community
…Or the million and one other things that make life fun, fulfilling, and meaningful.
So today, let’s agree to kill the lazy balance sheet once and for all, shall we?
Because life’s too short not to enjoy the money you’ve worked so hard for.
In this week’s blog post, we’ll talk through what a lazy balance sheet is, how to tell if you’ve got one, and the antidote to make your money work for you so you can grow your wealth…
…Instead of it sitting around doing nothing inside a lazy balance sheet.
First up: what exactly is a Lazy Balance Sheet?
This is what we at Farm Owners Academy call a balance sheet that’s not leveraging your money very well.
Basically, if you’ve got a business that’s really profitable, but you’ve got very high or 100% equity (so little to no debt), that’s a lazy balance sheet.
Why “lazy”?
Because your money’s just sitting there…when it could be PUT TO WORK.
Something rich entrepreneurs do well (and most farm owners don’t) is turn their existing money into more money. They reinvest profits into the business or in outside investment opportunities.
Why? Because at the moment, debt is cheap.
As recently as the 1980s, we were seeing 23.5% interest rates…which is nuts! But today? Rates from the bank are more like 3%. That’s nothing!
Considering you can make 7, 8, 10% returns elsewhere, it’s often smarter to put your profits into a high-yield investment today, rather than pay down debts.
Pretend you’ve made $500K in profit this year. You can…
Option A: Put it all in a savings account or FMD.
Option B: Use it all to pay down your loans, which have a 3% interest rate.
Option C: Invest it in the share market, that’s currently giving about 8% returns.
(NOTE: Of course, that 8% return isn’t guaranteed and there’s risk in the share market…but there’s also risk in the property market — which is what farming land is! Most of the risk in the share market is if your investment horizon is short-term. If you invest your money long-term, the risk is low and returns more dependable.)
Which option would you choose?
Let’s look at what each option would give you…
Option A: Put it in an FMD at 0.45% interest: makes you $2,250 p.a. Basically no benefit — that’s what we call “lazy” (note you will need to pay tax on this at some point).
Option B: Pay tax (assume 30% tax rate), pay down your loans (3% interest rate): paying $150K tax, paying off $350K of your loan saves you $10.5K. There’s a small benefit there, but still — pretty lazy.
Option C: Pay tax and invest it in the share market (yielding 8% returns): you pay $150K tax, earn $28K off that $350K investment. What could you use the extra $28K for? Just think about it!.
(Even if you don’t make 8% returns, you can invest in the share market in a way that will give you a stable dividend yield. Irrespective of what happens with the capital value of the shares, you still get the dividend and are still better off).
^^ Ding ding ding! We have a winner!
Do you see how in Option C, your money works for you?
That’s why we call it a “hardworking” strategy, rather than a “lazy” one.
3 investments to grow your wealth
If you’re running a Lazy Balance Sheet — with high profitability and low or no debt — your money could be better spent building your wealth in other ways.
When it comes to investments, we always advise our farm owners to start with these 3:
1. Expand your farming enterprise
If you have a profitable farm enterprise, it could be a great idea to reinvest your profits back in the business in order to grow it (and see higher profits as a result).
Invest in capital improvements that increase efficiency or production
Purchase more land, livestock, or machinery
Enrol in business education that will expand your skills and help you make more money (might we suggest Farm Financial Framework? 😉)
2.Invest in the share market
Another great way to grow your wealth is to invest in the share market, which currently returns about 8%.
We love this option because it provides relatively stable returns. Plus, it’s easy to sell your shares if you ever need to access that capital quickly, like if interest rates increase.
A third option is to buy residential or commercial property. Many wealthy businesspeople grow their fortunes through property investing, because the property market tends to grow over the long-term.
There may be ups and downs (as we saw in the 2008 financial crisis). But if you’re willing to play the long game, property will pretty much always increase in value — often quite significantly.
You can also rent out your properties and use the rental income to make mortgage payments. This allows you to essentially own your investment for free!
That’s a big question people have when they start thinking about investing.
Because yes, debt is cheap. But even at cheap rates, too much debt can still sink a business. So let’s talk about how to make sure you’re taking on debt in a safe, low-risk way.
Quick Disclaimer: What we’re about to share is for educational purposes only. It’s not personal professional advice; you should always consult a financial advisor for your specific situation.
But for the purposes of learning, here are two benchmarks that help you take on debt safely…
1. 80% equity (or greater)
The benchmark we like to use in the farming industry is to aim for an equity level of more than 80%.
That means you need to own 80% of your assets.
Having most of your assets owned gives you a certain level of security. But it also gives you some room to play, by leveraging that extra 20% to put into higher-yield investment opportunities to grow your wealth.
2. Finance Cover Ratio of (at least) 3
Your Finance Cover Ratio is a measure of how easily you’re able to cover your debts.
If, for example, the interest on your debts cost you $100k per year, we want to see your Net Profit covering those interest costs by at least 3x — meaning you’d need to see a Net Profit of at least $300K that year.
Net Profit = Total Revenue – Total Costs
As long as you’re making a Net Profit of at least $300K, you could take on debt that costs you $100K each year without much risk.
So before you use any profits on a new investment, always make sure:
You have a sustainable equity level
You can cover your interest payments by at least 3x each year
…Then you can invest in a safe way, giving you security and peace of mind.
How to turn your Lazy Balance Sheet into a Hardworking Balance Sheet
So.
Now you’ve seen how the right kind of (safe) debt can actually be a good thing…and an incredible way to grow your wealth.
What do you do if you’re currently running a Lazy Balance Sheet, and have too high an equity level?
Enter: The Hardworking Balance Sheet.
On a Hardworking Balance Sheet, every dollar is being put TO WORK — either to keep your farming operation running and/or grow your wealth. No dollar sits unused.
Here are 3 things a Hardworking Balance Sheet will include:
Equity hovering around 80%
Net Profits that are 3x the amount of any interest payments on your debts/loans
Investment(s) that return a higher % than your loans cost you (see section above for our top 3 investment picks)
If your equity is higher than 80% and you’re ready to take on a bit of debt to grow your wealth, the next step is to have a chat with your bank and financial advisor.
As long as you’ve been paying off your loans, they’ll likely be able to offer you more money that you can start investing with. Just make sure you don’t go much below 80% equity across all your debts and that your Finance Cover Ratio stays above 3!
I hope today’s post helped you get out of the matrix of “always pay down debt first”…because that’s not necessarily the right default mode to have.
You don’t want to just be working hard for your money. You want your money working hard for you.
If you find that you’re storing all your money in savings accounts, FMDs, or under your mattress, you’re missing out on massive opportunities to grow your wealth.
Luckily, there are heaps of ways you can invest your money to create more money in a safe, low-risk way.
But the longer you wait, the longer you allow your balance sheet to be lazy, the less time you have to accumulate wealth. So take a look at your balance sheet today and brainstorm some ways you could turn it into a Hardworking Balance Sheet instead.
As always, we’re here to help! If this blog post piqued your interest and you want to learn more about building long-term wealth, let’s have a chat. Just send us an email at [email protected] and we’ll get it sorted.
Want to learn more about finance? Join our free training.
If you’re loving what you’re reading and want to learn even more about how to apply pro finance lessons to increase profits on your farm, join us for our upcoming free training.
We’ll simplify farm finance and give you plenty more ideas for how you can make more money (ie: reduce your inputs and increase your outputs) without working more hours.
Getting angry and snapping at your partner, kids, or farmhand?
Suffering from headaches, stomachaches, or intestinal issues?
Generally not feeling a sense of purpose or accomplishment on the farm?
If you answered “yes” to one or more of these, you may be in burnout, my friend.
But don’t worry, you’re not alone. Many farmers come to Farm Owners Academy when they’re living in burnout, day in, day out.
Especially in the farming community, we value hard work. Maybe you were told that you needed to work 7 days a week, 12+ hours per day, so that’s what you’ve always done.
Maybe you think you have no choice if you want to be successful, that you simply have to work yourself to the bone to get ahead.
And maybe, the exhaustion and stress has become so normal that you don’t even know anything different.
That’s why it’s so important that we talk about burnout today. Because the truth is:
It’s not healthy to work this way
It’s costing you productivity and results, and
You can be successful without being constantly tired, stressed, and irritable (in fact, you’ll probably be much MORE successful when you get yourself out of burnout)
We consulted the big guns — Farm Owners Academy accountability coach Tracey Secombe, who works with our Platinum Mastermind members. And in today’s blog post, we’re sharing the symptoms of the 5 stages of burnout, to see if you’re in one of them.
And if you find that you are in burnout (most of us are!) we’ll share some steps you can take to reduce your stress levels and work from a much healthier place.
Our goal here at Farm Owners Academy is to help you create a Freedom Farm – that is to get better results in your farming business in less time and with less stress. (It’s completely possible — our Farm Owners Academy members have proven it.)
And it starts by taking care of the #1 asset on your farm: YOU. So let’s dive in…
The 5 Stages of Burnout
Stage 1: The Honeymoon Phase
You know when you start a new diet, exercise regime, or project and you feel excited for the challenge and committed to getting results? That’s the Honeymoon Phase.
This stage occurs before the real symptoms of burnout start.
Stage 1 is marked by high job satisfaction and commitment to the job at hand. You’ll also have high energy levels, good productivity, creativity, and optimism.
You may start to experience some light stress. But generally, you’re working from a high-energy, good-mood place.
The good news: Even if you’ve been running your farm 10, 20, or 30+ years, you can still get back into the Honeymoon Phase!
As time goes on, some days feel more difficult than others.
Some days are still exciting but others aren’t.
You may start to lose enthusiasm and momentum as tasks and projects don’t go as smoothly as you expect.
And you may find your optimism waning and notice stress affecting you physically, mentally, or emotionally.
That’s when you’ve moved from the Honeymoon Phase to Stage 2: the Onset of Stress.
The symptoms of Stage 2 of burnout appear at three levels:
Physical symptoms: fatigue, grinding your teeth at night, headaches, high blood pressure, lack of quality sleep, unusual heart rhythms or palpitations
Emotional symptoms: anxiety, forgetfulness, inability to focus, irritability, job dissatisfaction
Behavioural symptoms: avoidance of decision-making, change in appetite/diet, general neglect of personal needs (eating well, exercising, taking care of yourself), lack of social interaction, lower productivity
Those symptoms sound pretty common, right? Most of us have been in Stage 2 at some point.
Sometimes, work is just a bit more stressful than usual — it happens to all of us.
Stage 2 can still be a healthy place if you use coping strategies to manage the stress without letting it overcome you. (Keep reading for specific stress management suggestions below).
Stage 3: Chronic Stress
If you’ve been putting up with Stage 2 for a while, it often progresses to Stage 3: Chronic Stress.
You’ll notice a marked change in stress levels and may experience more intense symptoms than Stage 2.
Stage 3 symptoms include everything in Stage 2, PLUS:
Physical symptoms: deep exhaustion, persistent tiredness (more than just low energy), physical illness, odd ailments
Emotional symptoms: anger, aggressive behavior, apathy (“I don’t even care”), cynical attitude, resentfulness, feeling threatened, panicked, or out of control
Behavioural symptoms: decreased sexual desire, denial of problems at work or home, increased alcohol/drug use, increased caffeine consumption, lack of hobbies, missed work deadlines/targets, procrastination, social withdrawal, uptake of escapist activities (watching TV, scrolling social media, anything to “switch off” and avoid reality).
Many of us have been in Stage 3 before. So if you feel like that’s you, there are things you can do to turn it around.
It’s important to implement some coping strategies here to support your wellbeing and prevent you from moving into a further stage of burnout. Here are some key things to keep in mind:
Cut yourself some slack. Accept that you’re feeling overwhelmed, and that’s okay. Almost all farmers and business owners have felt this way. All you can do is your best, so try to have realistic expectations…and not feel pressured to achieve superhuman results overnight.
Take care of yourself. You know the drill! Drink enough water. Eat quality foods. Get enough sleep. Exercise. Spend time doing things you love, with people you love. Take deep breaths and engage in a mindfulness practice like meditation. These things are often overlooked but can make the biggest difference!
Focus on the lessons, not the losses. You’re always growing and changing as a business owner. There’s no such thing as failure, remember. Every so-called “loss” is a lesson that will help you do better next time. Embracing “failure” as a natural part of the road to success can help you feel less stressed when things don’t go perfectly.
Do what you can to reduce your stress levels. Maybe it’s hiring a farmhand. Re-organising your business to take some things off your plate. Working with a coach. (Farm Owners Academy can help!) Ideally, you want to move back down to Stage 2, where you feel some stress but it doesn’t overwhelm you. Think of what will help YOU (because everyone’s different) take your stress levels down a notch or two so they feel more manageable.
Stage 4: Burnout
This is when you cross the threshold from stress into burnout itself.
Burnout is the result of chronic, long-term stress. And it’s much more than feeling overwhelmed.
It’s a constant state of exhaustion and it becomes increasingly difficult to cope. Continuing as normal is often not possible and many people have some sort of breakdown when they’re in burnout.
Here are the symptoms of Burnout:
Physical symptoms: chronic headaches, chronic stomach or bowel problems, physical symptoms/illnesses that have intensified or increased
Emotional symptoms: desire to “drop out” of society, desire to move away from work or family/friends, feeling empty inside, pessimistic outlook on work and life, extreme self-doubt
Behavioural symptoms: complete neglect of personal needs, increase in escapist activities, obsession over problems at work or in life, social isolation, working all the time and have no balance in your life
Steps to Recover from Burnout Without Progressing to Stage 5
If you recognise that you’re in Stage 4, it’s important to take steps to recover NOW.
You must make it a priority to reduce your stress and feel better; it’ll only get harder the more you progress.
There will ALWAYS be more to do on the farm. And there will never be someone forcing you to prioritise yourself and fix your burnout situation — only you can do that.
Luckily, there are simple things you can start TODAY to prioritise your well-being. Here’s a list of the best things you can do now to treat your burnout before it gets worse:
DO LESS: Prioritise your to-do list
A lot of the time, the reason we’re burning out is we’re saying “yes” to too many things, rather than being really clear about what our priorities are. We call this “hitting the ceiling” because you’ve reached capacity and need to do less to recover.
This is the beauty of making a quarterly plan because it tells you what’s most important to focus on. A quarterly plan makes it easy to say “no” or “later” to anything that doesn’t support your goals for the quarter.
It’s also helpful to create a STOP-doing list. This is often more powerful than a to-do list!
To create your stop-doing list, look at your schedule and audit the activities on your weekly list, by asking yourself:
Why am I doing this task?
Will it really benefit me to do this? (Does it really need to be done?)
Am I the person who should be doing this? (For example, maybe your kids can make lunches or a farmhand can drive the tractor).
Can I do this later?
You’re bound to find tasks that you don’t really need to do right now. Add these to your stop-doing list! Freeing up space in your schedule is step 1 to feel less burnt out.
This sounds so simple but is absolutely vital to recover from burnout! Prioritise your sleep.
That means going to bed at a good time, especially if you wake up really early. If you struggle to unwind at night, try some deep breathing exercises or meditation before bed. (See next section.)
Pay attention to your own rhythms. Different people have different sleep needs. Just because your wife or your dad only need 5 hours to function well doesn’t mean you do! Start by aiming for 8 hours of sleep each night and notice how you feel. Adjust from there to find your ideal amount.
Calm your mind
I know meditation and deep breathing exercises might feel fluffy to you. But don’t knock it until you try it! They’re powerful, proven strategies to overcome burnout.
You can reset your stress levels by pausing and breathing intentionally, even just for a minute. By taking slow, rhythmic breaths, you “speak” to your brain and tell it you’re okay. It’s scientifically proven to de-stress your body. (Harvard Medical School even agrees!)
Here’s a simple breathing exercise:
Breathe in for a count of 4, then breathe out for a count of 8.
Easy, right? Anyone can do it. The next time you’re feeling stressed, try it for a minute or so…you’ll be amazed how just a few deep breaths can instantly calm you down and make you feel less stressed.
Meditation is also a great strategy to quiet your thoughts. Feeling exhausted is linked to being disconnected. When we’re aligned, tuned in, and relaxed, we feel good and in control of our lives.
You can release so much stress and anxiety through moving your body. So don’t overlook the importance of exercise not just for your physical health, but for your mental and emotional health as well.
We often think high intensity is the best way to release stress, but it can actually increase your stress levels. So aim for moderate activities instead. Walking at a brisk pace is a great exercise that will naturally release stress.
Try a variety of exercise: walking, playing sport, swimming, yoga, stretching, weight training — and see which one(s) helps you feel your best.
Eat (and drink) well
Poor hydration is linked to exhaustion. So make sure you’re drinking plenty of water throughout the day. For women living in a temperate climate you need about 2.7L per day, and for men about 3.7L per day. Approximately 20% of this comes from what you eat, the rest needs to come from fluids. If you are doing exercise or physical work the requirements increase.
Give it a try for a week — bet you’ll notice a positive change in your energy levels and mood when you’re fully hydrated.
When it comes to food, start by eating when you’re hungry. You’re better off following your own hunger cues than sticking to a regimented breakfast-lunch-dinner schedule. Your needs may differ depending on the day.
You know how to eat healthy, right? We don’t need to go into the details. Add more whole foods, vegetables, and fruits to your plate and take away some sugar and processed stuff. High sugar causes a blood sugar spike and drop, which leaves you feeling exhausted.
Accountability coach Tracy specifically suggests that adding more alkaline foods into your diet helps with burnout. (You can Google this to find out what they are). Alkaline foods are excellent for nourishing the body and helping to reduce stress.
It’s also great to have some go-to healthy snacks ready when hunger strikes so you don’t grab something that will make you feel crap an hour later. A few examples:
apple and peanut butter
cucumber with cream cheese
crackers and hummus
a handful of nuts
These snacks will keep you fueled without the energy crash of sugary sweets.
Spend time with hobbies / passions
The farming community is so work-focused. But life’s too short not to do things just for you, too.
That’s why spending some time doing things you love is a great treatment for burnout.
Even 5 minutes a day of something you enjoy can make a difference. That could be:
Building model trains
Listening to music
Playing sport
Riding bikes with your kids
Lighting a bon fire and spending time with friends or family
Make time for activities you enjoy, even if it’s only a short amount of time. Tapping into this sense of passion will increase your energy and mood, and make you more resilient to handle the stress of work.
Stage 5: Habitual Burnout
If you don’t address the symptoms of burnout at Stage 4, it can progress to Stage 5.
This is when burnout becomes so normal in your life that you experience significant ongoing mental, physical or emotional problems.
Stage 5 happens in farming all too often because our community has such a strong work ethic. It often crosses over into unhealthy territory and pushes farm owners to the brink.
Habitual Burnout is when burnout has become very severe, and includes additional symptoms of:
It’s critical you reach out for professional help if you’re in Stage 5. You can’t do it on your own.
Let’s say that again: You can’t do it on your own.
Talking to your doctor is a great first step. Psychologists or counselors are other professionals you can reach out to help.
(And you can always email us at [email protected]. We’re not mental health professionals but we can connect you with resources to help.)
In an industry as challenging and difficult as farming, burnout is a common problem.
If you find yourself in burnout, don’t beat yourself up. So many of us have been there!
But equally, don’t downplay it or let it slide. It’s really important you take steps to address your stress levels NOW (not tomorrow or next week or next year) or it can quickly spiral out of control.
If you’re feeling stressed, try one of these things today to get started (then add another one tomorrow):
Do less — create a stop-doing list and cut out any tasks you don’t need to do today
Get 8 hours of sleep
Deep breathing: breathe in for 4 counts, out for 8 counts, repeat for 2-3 minutes
Meditate
Go for a brisk walk
Drink enough water
Eat more alkaline foods…and less sugar and processed foods
Spend time doing activities you love outside of work
Seek professional help
As always, if you need to talk, we’re here for you. Just reach out at [email protected].
^^ This is a countdown to the day you hang up your Akubra for the last time and head to the great farm in the sky.
Okay, maybe not the exact day.
But the reality is, all of us have a countdown timer like this…we just don’t spend much time looking at it.
Forgive us for being so blunt here…
But one day, you will die, and your farm WILL pass into new hands.
The question is:
Will you be ready?
Most farm owners avoid thinking about succession planning until it’s too late. They (understandably) don’t want to think about death or retirement so they put it off.
And as a result, the succession plan never truly gets sorted out, resulting in all kinds of headaches…
Kids left to untangle complicated finances that add so much stress to their lives.
People feel cheated out of what they feel is fair. Maybe one family member spent years on the farm, toiling away to build up the business, only to have their other siblings take a big share of it because there’s no real plan in place.
Sometimes family members stop speaking to each other altogether, tearing the family apart with no reconciliation in sight.
That’s why it’s so important to start thinking about succession planning NOW, even if you don’t think you need to yet.
And that’s what today’s blog post is all about. You just need to answer four simple questions to start a smooth succession process.
These 4 questions will help you even if:
You’re decades away from retirement
Your farm is a financial disaster right now
You have conflicting personalities within your family
You have no idea where to start with succession planning
You were handed a mess of a farm and your parents made huge mistakes with succession
There’s that old saying: “Only two things are certain in life: death and taxes.”
So let’s normalise this for a minute and get real about what will happen after you leave the farm, okay?
We promise, it’s easier than you think to get started. And your family will be unspeakably grateful you put the time into this now to keep things stress-free in the future.
4 questions to make succession planning simple
1. What is your ideal outcome?
The first step is to get clear and specific about the best outcome you can imagine.
Even if your dream feels very far from your current reality, that’s okay. Just think about the situation that would make you happy to hand over your farm.
A few things to consider:
How much money do you need to retire?
At what age do you want to retire?
Who will take over operations on the farm?
Will your kids split the farm equally? What is the percentage breakdown? How much money do you need outside the farm business to make this equitable?
Will just one of the kids take over the farm, with the others inheriting something else?
Will the farm be sold, so the family can split the money from the sale?
You want to ask all affected parties what their ideal outcome is, too. Don’t assume you know what your kids want!
Too often, we see kids who don’t get what they want when their parents pass away. Either they secretly want to be part of the farm and are left out of the farm’s succession plan…or they secretly want to leave the farm and end up being responsible a farming business they aren’t passionate about.
That’s why you need to ask anyone affected by succession what their ideal outcome would be. You may not be able to give everybody exactly what they want (and that’s okay) but it’s important to at least know what people want.
2. What does your current situation look like?
Next, it’s time to get realistic by looking at your farm’s numbers. Understanding your financial picture is an important step in smooth succession planning.
Get clear on the key financial figures of your farm, such as:
What assets do you have?
What are your fixed and operating costs?
How much profit does the business make each year, on average?
If there isn’t any profit, what can you do about it?
What is the current net worth of the farming business?
What kind of salary are you paying yourself now?
How much money do you have in any retirement accounts (or other assets or accounts that can
be sold to fund your retirement?)
If you’re not a finance guy, don’t worry. We’ve got a free cheat sheet on the 10 financial ratios you need to know for your farming business.
(We’ll also be sharing a heap of free education over the coming weeks to help you feel more in control of your finances. Click here to sign up for email updates to get these free tips delivered straight to your inbox.)
3. How can you bridge the gap?
So. You know where you’re starting from and where you want to go.
The next step is to make a plan to get from here to your ideal outcome.
This is where you make your PLAN.
This doesn’t have to be a one-year, five-year, or even ten-year plan. It can be 30 years in the future, if that’s when you’ll be handing things over!
It’s important to keep an open mindset while you’re creating your plan. If you catch yourself saying, “I’ll never be able to do that”…stop! Instead, get curious and say, “I may not be able to achieve everything I want. But how can I get as close to that ideal picture as possible?”
Make sure to consider ALL your options here. It’s empowering to have a variety of choices, rather than feeling stuck with just one.
For example, let’s say your farming business is in dire straits…
One option is to spend the next 20 years getting the farming business to run like clockwork, so it’s ready to sell or hand over to your kids when you retire.
Another option is hiring staff to manage the farm for you. Our clients Cheryl and Tim are doing exactly this and it’s working out great for them. Check out their story below:
A third option is to sell everything tomorrow. You could take some money for retirement and then hand over a traditional inheritance to your kids. That may be the best option for everybody involved, especially if your kids don’t want to take over the farm or if you’re not interested in working on the business side.
This comes back to Step 1 and understanding whether your kids would rather have the farming business or have the money and freedom to walk away. They’ll appreciate having a choice rather than being handed something they may not want.
4. Have I communicated any updates with all affected parties?
This is a bonus step. Make sure to keep communication open continually.
It starts with one conversation asking people what their ideal outcomes are.
It continues by sharing financial information, keeping people in the loop of how the farm is doing as things grow and change.
It expands as you share your succession plan once you make it, so people know what to expect.
Ongoing communication is THE #1 most important part of the whole succession planning process. You can avoid so much frustration, resentment, and stress by keeping communication open with your family.
Even if not everybody gets what they want in the succession plan (you can’t always please everyone), they’ll respect how it happened because expectations were clear and spoken about in advance.
If you take nothing else away from this blog post, please let it be this:
Don’t wait. Start thinking — and talking — about succession NOW. It is the responsibility of the current owners to make sure this is done properly.
Start simply by asking your kids (and/or other people affected by succession) what their ideal outcome would be.
That’s it!
You don’t have to tell them whether their ideal outcome is possible. You just have to have an honest chat about what would be best for them.
Once you’ve got that, you’ve already made a good start on Question 1 above!
Remember, the best way to cure the succession issue is to give yourself enough time to create the succession you want. Start today.
And if there’s anything we can help with, we’re only an email away at [email protected].
Years ago, when I lived in Brisbane, I got up at 4:30 in the morning. I woke up before the sun so I could meet a mate of mine and train with him at the gym.
After six months of doing this, I happened to mention to him the route I took to the gym. He looked at me and said, “Andrew, you’re missing the shortcut! Just take this turn here and it’ll save you a heap of time.”
I tried the new route the next morning and I kid you not, it was 15 minutes quicker. I did some quick math and worked it out, it was like two weeks a year that I was wasting by taking the longer route — plus the extra petrol.
I asked myself, “Why did I never even think to look at my route?!”
It’s because I was on autopilot, because I wasn’t paying attention.
So many farmers do the same thing on their farms…
They keep doing the same things in the same way…because it’s always been done like that…not realising they could save a whole heap of time, energy, and stress if they “took another route.”
This is what the Organise Infrastructure step of the TOP Producers Model is all about.
When you organise your infrastructure and streamline your farm, that leads to a massive labour savings. Labour’s the most expensive cost on the farm so this is an enormous way to save money as well as time and stress.
Why you need to take a step back to analyse your
efficiency
Here’s an important fact about improving efficiency:
You can’t fix a problem in the same environment it’s being created.
Imagine there’s a guy sitting by a river. Suddenly, he sees a kid flailing around in the water, screaming out for help. He jumps in, swims over to the kid, and pulls him out.
Two minutes later, there’s another kid drowning in the river. So he jumps in and pulls that kid out, too.
The cycle continues – the man sees a kid drowning, jumps in, pulls them out.
A woman walks past and he yells out, “Help! These kids are drowning. Get in the river, let’s get busy saving them!”
But instead of diving into the river, the woman says, “No. Something doesn’t feel right and I want to understand what’s going on first.”
She walks upstream and analyses the situation, looking to see what’s causing this problem.
Eventually, she finds a man who’s grabbing kids and throwing them into the river. She stops him…and the whole problem stops with it.
Now, I know that’s a weird example. But you get the idea, right?
If you’re spending all your time pulling kids out of the river, you can’t see what’s causing the issue in the first place.
To optimise your farm, you need the ability to remove yourself out of the busyness and look back and see
Where are we being inefficient?
How could we make things simpler?
What could we invest in to save us time?
That’s what Organise Infrastructure is all about.
3 examples of ways to organise infrastructure
This concept of optimising infrastructure is a bit abstract. So before we go any further, let’s make this real…
To give you an example, here are three ways a sheep farmer could create more efficiency. These might not apply to you (because every farm is different) but use them as a springboard to imagine areas you can organise:
Organise laneways
You’ve got to move sheep around all the time, right? So why not create laneways to make it really efficient for you to move sheep in between paddocks?
Organise the shearing shed
You’ve got to shear the wool off the sheep. How can you make that as efficient as possible so you get the sheep in and get them out quickly?
Organise the yards
You have to put sheep into the yards every 3 months (or more). How can you make that as efficient as possible? What can you do to lay it all out so everything’s simple?
Improving these efficiencies could easily save you 10 hours each week — which works out to 65 x 8-hour workdays each year. Imagine what you could do with 65 extra days!
2 simple ways to improve your inefficiencies
Hopefully you’re starting to see how powerful it is to organise your infrastructure and how much time, money, and stress it will save you.
But how do you actually DO it?
The simplest way is to start paying attention.
As you go about your day, notice everything that you do and ask yourself:
Is this the smartest way I could be doing this?
Consider WHY you’re doing it that way. Is it because it’s truly efficient? If not, explore possible solutions of ways you could do it differently.
Here’s another strategy…
The best way to learn how efficient farmers organise their infrastructure…is by copying efficient farms!
You want to find a farmer that’s doing better than you and copy them. It sounds like cheating but it’s actually a success strategy I learned in business school!
The titans of the business world copy what’s working for others. And you should, too.
Who are the top-performing farmers in your area? Almost always, they’re using the latest technologies and efficiencies and innovations. So visit those farms, watch what they’re doing, and see how you can apply those lessons to your farm.
Inside the Platinum Mastermind, we share the top-performing farmers and tell our members to go visit their farms. They learn so much by studying what the leaders are doing. That’s why it’s such a powerful program, because we have 150 farmers all sharing their best ideas with each other.
So here’s your challenge…
For the next week on the farm, constantly question everything you’re doing through this lens of efficiency.
When you start a new task, ask yourself:
Is this the smartest way to do this?
What other technologies are out there that could make my job easier?
What am I missing?
You’ll be surprised what you realise when you take a step back and start paying attention to your efficiencies!
Have a FOA consultant analyse your inefficiencies & help
you improve them
When you’re working in your farm every day, it’s very hard to take a step back and see where you can organise infrastructure.
That’s why the Platinum Mastermind Program includes a farm tour! You get a fresh outside perspective to dissect your whole farm, discover where you’re being inefficient, and give you proven solutions from top farmers to increase your efficiency and organise your infrastructure.
It’s invaluable insight and it’s all included when you join the Platinum Mastermind program.
Tim is a founding member of Farm Owners Academy, having started his journey in 2015 at a TOP Producers Workshop. He and his wife Cheryl, own a mixed farming operation in the Upper South East of SA.Applying the principles taught by Farm Owners Academy has resulted in the farm business now being run by a great team which has freed Tim up to travel and mentor Platinum Mastermind members around Australia. Tim brings many years of practical experience to his role as a Benchmarking Analyst and enjoys helping members understand their numbers and providing support with decision-making.
Cassandra Kath
Cassandra along with her husband, Andrew and three teenage children operate Kathleigh Farms, a dairy farm business at Rochester in Northern Victoria. The dairy business has grown from starting out on a small dairy farm in QLD milking 50 cows to a herd size of 500 at their current location. Cassandra has a Bachelor of Science in Agriculture and has worked in the area of Animal Genetics and Agribusiness Banking prior to full-time farming. Throughout her farming career she has been involved in industry leadership roles. Cassandra has experienced firsthand the benefits of the FOA learnings and being surrounded by like-minded business people in the FOA community as a recent graduate of the Platinum Mastermind Program and now as an Alumni Member. Cassandra is honoured to have the opportunity to guide and support participants on their journey in the program and is motivated to see her clients achieve their business and personal goals.
Hayley Watson
Mother, Wife, Farm CFO, and Farm Business Coach for New Members – Hayley wears many different hats on a day to day basis. Previously qualified in financial planning with a degree in economics and finance, this has assisted Hayley to build the financial framework that has grown their first generation farm from establishment in 2016 to a flourishing industry leading egg production farm. In previous roles before commencing farming Hayley has been a business coordinator assisting in managing 60 staff. This knowledge has assisted Hayley in maintaining the business mindset for the farm and allowing the farm to reach so many milestones. Hayley’s journey with Farm Owners Academy started in 2019 in the Take Control Program, before commencing the Platinum Mastermind program in 2022. Hayley has a genuine and honest passion for helping farmers to see their potential and realise their goals by providing clarity and value.
Alison Hamilton
Alison is a 4th generation livestock producer, and together with her family, she has operated in both seedstock and commercial beef cattle production. Alison, her husband Andrew and their two small children, are based near Wagga Wagga in the NSW Riverina. For the past 12 years, Alison has worked as a consultant to the livestock sector. She is particularly passionate about helping producers improve efficiency in their operation with a strong focus on data and production records. Alison thrives on supporting and working with producers and being part of their growth journey.
Benita Bensch
Benita joined the FOA coaching team in 2020 and gains tremendous satisfaction supporting members to set and get their goals. Her role ties together Benita’s background and experience in coaching, agriculture and small business, as well as her passion for personal development and entrepreneurship. Benita is part of a family farming operation producing grain, seedstock and commercial beef cattle near Moonie in the Western Downs of Southern Qld. She and her husband Adam completed the Platinum Mastermind program in February 2023 and have experienced its benefits firsthand. From a career in the beef industry, to extension, marketing, communications and coaching, supporting others to be their best and create the results they desire has always been at the heart of Benita’s work. Alongside the farm and her FOA work, Benita is a Mum of four boys, Motherhood Coach, writer, speaker and podcaster.
Jack Owen
Jack started his FOA journey in 2020 as Part of the Platinum Mastermind program and continues to be involved with FOA as an Alumni member. He runs a self-replacing Primeline composite flock at Mt Emu, Victoria. The farms core focus is to run a sustainable high stocking rate, turning off both healthy fast growing store lambs and exceptional surplus ewe lambs with proven maternal traits. Taking on from what his parents had previously set up, Jack is building a freedom farm that is fully under management which allows him to pursue other opportunities outside of the farm. Jack thrives on his ability to help other like minded farm business owners to achieve new heights not only in their businesses but in their personal lives also.
Sam Johnsson
Sam is an experienced executive with strong leadership and business analysis skills gained through 10 years of consulting in the construction industry. During which, Sam led and managed teams of over 65 people and was responsible for all areas of business leadership and management. Sam now translates these skills to the farm business context.
In addition to his previous corporate experience, Sam has been a key contributor in leading the rapid growth of his own Ag Tech business supporting clients all over Australia.
With his 10 years in corporate consulting coupled with the practical experience of leading a fast-growing start-up business, Sam helps clients focus on what is important in their business and supports them to make the robust decisions that help move them towards their goals.
Sam is passionate about the agricultural sector and is committed to delivering on Farm Owners Academy’s mission to help Australian farmers create more profit, more control, and more freedom in their business.
Tracy Secombe
Tracy brings 30 years of business experience to her role as Head Coach for Farm Owners Academy. Tracy helps you make the small shifts that allow you to increase your profits while decreasing your time working in the business. Tracy specialises in helping you identify the thing holding you back from your ideal health, purpose and lifestyle.
David Westbrook
David is a founding member of Farm Owners Academy, having started his journey in 2015 at a TOP Producers Workshop. David owns a farm on Kangaroo Island and is now one of the premier livestock producers in Australia. David is a passionate advocate for the power of a positive mindset, consistent learning & creating a business that follows your passion & values.
Cheryl Freak
Cheryl is a founding member of Farm Owners Academy, having started her journey in 2015 at a TOP Producers Workshop. She grew up on a farm, worked as a lecturer in rural studies & now runs a mixed farming business in South Australia. Cheryl has experienced first-hand the positive influence and beneficial impact FOA has on farming families and businesses and is now using her wealth of experience to help our farmers gain more profitability and freedom.
John Gabriel
John is our technical wizard here at Farm Owners Academy. With over 9 years of experience, he is responsible for managing our website, database, and digital marketing. As the go-to person for all tech-related matters, John’s expertise ensures that our online platforms are cutting-edge, user-friendly, and optimized to deliver an exceptional learning experience. His unwavering commitment to excellence and expertise in technology make him an invaluable asset to our team.
Hayley Grosser
Hayley commenced her FOA journey in March 2018 when she joined the Platinum Mastermind Program. She has a background in business & finance and runs a mixed farming business in Western Victoria. Hayley has experienced firsthand how transformational the FOA programs are and is passionate about cultivating a positive mindset and strong financial foundations within the farming community.
Sam Pincott
Over the past 10 years, Sam has developed an extensive, large-scale free-range egg production business in south eastern NSW. The property is managed under sustainable farm management principles with a strong focus on soil, pasture, animal and financial health. Business coaching has been pivotal to their success, as has an active involvement in a mastermind initiative with passionate, like-minded farmers. With 4 young daughters, Sam & his wife now focus on supporting their farm team, whilst prioritising personal, family and community objectives.
Michaela Malicki
With over 8 years of experience providing support to both executives and wider teams, Michaela is an accomplished Administrative professional. Over her career, Michaela has worked with a diverse range of clients and a broad range of industries, most recently as Executive Assistant to the Deputy Principal of a large private School. Michaela holds a Bachelor of Arts Degree in Psychology from Macquarie University, and volunteers her spare time as a Telephone Counsellor with Lifeline Australia.
Marina Gregor
Marina started her FOA journey in 2015 as part of the Platinum Mastermind program and continues to be involved with FOA as an Alumni member. She runs a self-replacing merino and dual-purpose flock on Kangaroo Island with her husband Brett and three young kids. They are building a stand-alone farm business to open up their future for new careers while keeping their multigenerational family farm going. To her coaching role, Marina also brings her previous experience as an accountant, banker and farm manager to her Coaching role with FOA.
Rick Morris
With his wife Annie and four daughters, Rick has been farming at Karatta, Kangaroo Island, SA, for the past 24 years. The farming system has evolved to becoming a self-replacing maternal ewe flock turning off both store lambs to be grown out elsewhere and replacement ewe lambs with emphasis on weaning percentages, early maturity and do-ability (fat, muscle, worm resistance). Rick has a passion for producing fast-growing, healthy stock from healthy soil with a huge emphasis on lamb survival.
Having gained a Bachelor of Ag Science (Hons.) at Adelaide Uni, Rick spent four years as an agronomist with the Western Australian Department of Agriculture in the mid 90’s and continued practising as a private agronomist on KI for another ten years before getting more serious with the farm, family and fishing. This background has fuelled his passion for soil fertility and plant production.
Andrew Roberts
Andrew Roberts is an executive coach with 20 of years experience, a serial entrepreneur and a business scaling specialist. He has started, built and sold three 7 figure companies. The son of a New England wool grower, Andrew is well known as one of Australia’s leading business mentors, is a Strategic Business specialist, and has been instrumental as a mentor for a host of companies featured in various Business Review Weekly Top 100 lists.
Leah Bowey
Leah joins FOA with over 20 years of administration/executive assistant background in engineering and defence. She is a jack of all trades who brings her can-do and fun attitude to everything she does.
Farm Financial Benchmark
To help you make better decisions and improve the profitability of your farm…
We will deliver to you a Farm Financial Benchmark (FFB) that will give you a really clear picture of what your business currently looks like from a financial perspective and teach you how to create this report.Farm benchmarking is such a great tool to analyse the current business performance and help you to understand where the strategic opportunities for the business are. You will learn so much about the health of your business just by looking at the overall performance summary that comes from this benchmark.
To generate the benchmark report, we look at assets (land, plant and livestock), liabilities, revenue, inventories, direct and overhead costs (including appropriate wage allocations for owners and family members), financing costs, profit and equity.
We then use these numbers to generate a KPI scorecard specific to your farm across the following four categories – Solvency and Resilience, Profitability, Financial Efficiency and Repayment Capacity.
The Farm Financial Benchmark requires 3 steps:
1. Send us your financial information (most recent Profit & Loss statement).
2. We interpret the information at our end and send you back a summary of assets and liabilities, business performance and Key Performance Indicators.
3. Use what you learn from the Take Control Program to improve your KPIs which will lead to improved business performance and improved net worth.
You will also be able to ask your peers and mentors in the online community what they are doing, and what else you can focus on to improve your profitability.
The Farm Financial Benchmark includes 3 reports:
1. A summary of assets and liabilities to understand your equity.
2. We interpret the information at our end and send you back a summary of assets and liabilities, business performance and Key Performance Indicators.
3. A list of your business KPIs, to help you determine how you are performing and what changes need to be made to improve. This is very valuable. Green means you are performing well and red tells you there is an issue (based on successful farms around the world).
During the Take Control modules, you will learn more about the meaning of these KPIs and how to improve them. This will help you make the RIGHT decisions for your farming business.
The TOP Producers Program 2-Day Workshop
Take Control isn’t just about business success, making money, or achieving recognition. It’s about balancing all areas of your life.
That’s why we’re including an event to help you achieve success.
We will GIFT you two tickets to our annual TOP Producers Program 2-Day Workshop (valued at $1000 each!) for free:
This is a comprehensive workshop, where you will learn how to make more money and run a better farming business.
It will be two of the most productive days of your year where you can work ON your business and improve it.
