In these challenging economic times, trying to maintain a “business as usual” approach to the farming operation can apply a lot of additional unnecessary stress and pressure. At this time of year, many are still looking to finalise operational plans for the farm for the coming 12 months.
It was Benjamin Franklin who is credited with the saying: “Failing to Plan is Planning to Fail”.
As circumstances continue to change daily with the evolution of the COVID-19 virus, with it, so do many of the tax planning and budgeting strategies that need to be considered before 30th June 2020. Regardless of the strategies being considered, some key principals to consider include:
1. Cashflow is critical
Have you prepared your budget or business plan for the coming year and do you know what cashflow you will need to execute the plan. Don’t forget to stress test the cash flow with “what if” scenarios to assist in determining the strength of your business. Do you need to reconsider the timing of possible Farm Management Deposits or Withdrawals? Are your financiers on board with your cash flow requirements?
2. Be adaptive
In this fast-paced and global world, as we are finding out, circumstances can change daily. Is your business prepared for changes? Do you have contingency plans in place to obtain supplies and inputs you need for your business should shortages occur? How will they be delivered to you in this age of social distancing? Have you considered how these possible changes will impact your cash flow and budget?
3. Get the facts
At times, the amount of information available can be overwhelming. You need to ensure that you obtain the correct information for your business, from the right sources and understand how it will affect your circumstances. Every business is different and every structure is different. Getting access to credible and reliable sources of information and obtaining the facts is critical to your business adaptability and survival.
4. Listen to Advice
Many businesses have good advisors, accountants, agronomists, and consultants. It is the responsibility of these advisors to ensure that they are informed with the most up to date and relevant information and can pass on to you how the information will affect your business. Obtaining the correct advice at the right times will allow you to make the most informed decisions for your business.
Happy planning and stay safe
If you have any questions regarding business during the COVID-19 virus, get in touch with your local RSM advisor.