Professional Development Program






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Unit 3: Managing the Farm/Ranch Business for Long-Term Success

Growth “Quiz”

When helping farmers and ranchers prepare for growth or transition from one stage of business management to the next, ask them some or all of the following questions:
  1. Do you have the time to undertake the activities associated with growth (and the time needed to manage a larger volume of business)?
  2. Does your family support your efforts to expand the business?
  3. Is your personal financial position congruent with the financial situation of the company?
  4. Do you have the management experience and skills needed for growth?
  5. Does your business have the equity needed to justify growth (i.e. what’s your debt-to-equity ratio)?
  6. Has your business been profitable or shown the potential for profitability?
  7. Will your bank or other lending sources support your growth?
  8. Can you cover personal living and business expenses and debt repayment commitments during growth?
  9. Is the equity position of the business adequate to meet lending requirements?
  10. Do you have adequate recordkeeping and accounting systems in place to track growth?
  11. What contingency plans do you have if initial plans fall short of your goals?
  12. Do you understand how cash flow affects the business and have you reviewed cash flow projections under growth?
  13. Has anyone reviewed your financial projections?
  14. Will the rate of return justify your commitment of resources (financial and otherwise)?
  15. Will growth help you reach your goals?
Adapted from Financial Management for the Growing Business by Bryan Ziegler, Indian Hills Community College, Small Business Development Center, Ottumwa, Iowa.
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