Once a strategy for moving forward has been clearly outlined, the next step is to explore the financial feasibility of the idea. At a minimum, a farmer or rancher will want to prepare the following:
Partial budget analysis
Projected income statements: 1-5 years
Projected cash-flow statements: 1-3 years
Projected balance sheets: 1, 3, 5 years
Risk or sensitivity analysis
Worksheets for these types of analyses are available from the MISA Building a Sustainable Business guidebook. Again, scroll down to Planning Task 4: Strategic Planning and Evaluation – What Routes Can You Take to Get Where You Want to Go? The downloadable worksheets are available in two formats: ones you can print and fill out by hand, and PDF forms that you can type into directly.
In addition to these worksheets, another good resource is FINPACK® developed by the Center for Farm Financial Management. This resource can help with feasibility analysis and on-going financial monitoring. In some situations, the farmer may also want to consult with a financial advisor to complete the financial feasibility assessment.
