Farm Ranch Business Management Chapter 1 Agribusiness Management

Farm & Ranch Business Management Chapter #1

Agribusiness Management: • • • daily operation decision making planning evaluating must understand all aspects of the business • maximize profit

Characteristics of Decisions • • • Importance: meet goals Frequency: daily, yearly Imminence: how soon Revocability: can it be reversed? Available Alternatives: choices

Strategies for Decision Making • reduce number of daily decisions • collect data for alternatives • establish priorities

What are the steps in the Decision Making Process? 1) define the problem (own or rent machinery or land) 2) gather information about alternative solutions 3) Evaluate alternative solutions 4) make decisions consistent with goals and objectives 5) take action 6) evaluate and accept consequences of your decision

What are Goals? • broad statements that show where you want to be after some period of time • make a profit every year • increase grain sales by 12% over 5 years

What are Objectives? • the steps that must be taken in order to attain goals • increase wheat production by 30% next year • keep accurate records

What are the advantages of setting goals? provides "road map” distinguishes between goals & objectives makes it easier to get where you are going prepares you to meet the future you see the big picture & focus on critical relationships gives you purpose and direction frees you from worries and uncertainties about where you are headed

Guidelines for setting goals • • • your own goals in writing realistic and attainable target dates, time limits goals should be compatible with each other

What are the types of Goals? 1) Short Term Goals: attainable in less than 1 year 2) Intermediate Term Goals: 1 to 10 years 3) Long Term Goals: more than 10 years

Priorities of Goals • Dollar Value • Time • Orderly Sequence

How do you reach your goals? • • • review goals annually (min) use time and effort wisely organize (things to do list) check for slow moving goals modify goals as resources change