Improving Profitability Tutorial
It takes a lot of work to assess profitability. First you have to have good records to look at, then you need to spend time analyzing them, determining places for improvement, and planning for the future. Why bother?
Because profit is a tool that can help you improve your quality of life on the farm. You can use profit to take family vacations, hire labor to reduce your workload, or send your kids to college (yes, it’s possible to do this solely with farm income). Now, wouldn’t that make it more feasible for you to stay in farming for the long haul?
Agriculture is different from other business because you are managing complex, living systems, and these systems are inherently unpredictable, making it difficult to plan for profitability. However, there are ways to evaluate profitability, both before you start and as your venture progresses. The key is to have methods in place to regularly assess your financial health in order to minimize your risk.
This tutorial will help you:
- Become aware of the factors that affect overall profitability
- Learn about options for keeping good records
- Understand the difference between cash flow and profitability
- Learn strategies for building profit into your products’ prices
- Learn about resources to further your learning