Iowa Ag Lawyer|Time to Grow Up
Time to Grow Up
I would like you to consider buying my manufacturing business with the following facts. It grosses $350,000-$500,000, the price for its product varies upto 50% in a year’s time, your suppliers will not likely sign a long term contract to lock in your critical raw materials, the industry faces increasing regulation and hefty fines and you will have to serve as the human resources manager, environmental compliance officer, accounting and legal department, marketing department, facilities manager, and purchasing department and primary equipment operator on the manufacturing floor. Weather and politics halfway around the world will determine the market price of your product on any given day. Oh, and the previous owner is allowed to drop by, be critical your operation methods, choices and marketing and scoff at you if you try anything new. Finally, you will pay full price for every piece of equipment the company has purchased regardless of state of repair or usefulness.
Not interested? Can’t find a bank to lend you the money? If I tell you it was farm operation, suddenly all those factors don’t seem to matter, but they should. The farm operator of today needs to grow up and face the cold hard truth that the rest of the world considers them a business and act the same. Farm operators too often rely upon a handshake and a gut feeling that all will go well when interacting with its suppliers. Consider the last building erected on your property. Did you ask for a performance bond from the contractor, ask for lien waivers before making final payment, or even reduce the agreement to a contract that you understood? How about your employees, do you withhold taxes like the government says you should, do you provide training and safety equipment for t hem? When the building starts to lean to the left and the employee loses an eye on the job, it is too late to apply a fix.
Many farm operators express their disgust for marketing and frustration with the inability to capture a profit for their operations. The solution is to get smart on the topic and make enough time in your schedule to devote the proper amount of attention to it Or , hire it done. That’s what other businesses do, they focus on what they do well and outsource the rest. Yes, a charge goes with that outsourcing and if you hire it all away, why are you in the business anyway.
The same principle holds true for legal issues. Having an Iowa Agricultural Law Attorney who is aware of the legal pitfalls of contracting, federal and state regulations and debt collection can make you money. On the other hand, attempting to collect from a farmer who has filed bankruptcy on your own can cost you fines to the federal government for violation of federal bankruptcy law.
When was the last time you evaluated your farm business and determined what departments you are not paying attention to and what can you do about it. This may be the difference between the operation passing to the next generation and your farm ground being the nothing more than a farm name on some one else’s yield monitor.
With the new year, consider the following steps to grow your business and keep it out of harms way
1. Pull your annual credit report. Get an identity protection policy.
2. Check your insurance policy against what you actually own. Take pictures of valuable items and data plates on equipment.
3. Update your balance sheet and cash flow statements.
4. Invest in an off site back up system for your data and photos
5. Review your contracts and calendar expiration dates on services.
6. Block out your family vacation time and identify how to cover your operations for planned absences. Block off the county fair, the 4th of July or what ever major events you know are coming up.
7. Set a goal for the year’s income and identify what you will do with that achieved goal.
8. Review your estate plan and life insurance coverage.
9. Discuss with your parents their estate plan and consider if you have the assets to participate in their plan for you.
10. Identify capital improvements and develop a plan to fund them