Once an understanding of an operation’s financial underpinnings through regular key indicator analyses, the next step is to decide how to grow the operation. Healthy and well thought out expansion is important for continued success in any business.
With an approaching spring comes the opportunity to consider expanding operations or looking for ways to remain competitive. For agricultural business managers to persist in being successful one of the goals is to seek out lower per unit costs. The following table shows some ideas for growth which may help spark thoughts of how to increase revenue or decrease costs.
These mechanisms are identified by Michael Boehlje of Purdue University, see the link in the references at the bottom for more detailed information.
One or a combination of any of these growth tactics may work well for agricultural operations. Time should be set aside for exploring options such as these. Consider the financial foundation of the firm and then make informed action that will strengthen future competitiveness. Each of these also comes along with risks, however they can be mitigated through careful planning and consideration of current and forecasted financial health indicators.
For more information, or recommendations for further research into this subject email Preston Lyman at firstname.lastname@example.org.
Boehlje, Michael. January 14, 2013. “Farm Growth: Venture Analysis and Business Models”. Link Here.