Businesses
that focus on individual components of their operations in isolation
find it difficult to make progress as a whole. IMAG utilises
a
whole farm approach to business planning to examine linkages between
enterprises on the farm and take advantages of any synergies that exist.
Our spreadsheet-based modelling allows examination of a business as a
whole to determine the optimum mix of enterprises for a given target of
profitability and risk exposure. By performing analysis on a
number of key ratios, the business can be manipulated to improve
performance. Some of these key ratios include operating
return on
assets, business return on equity, asset turnover, gross margin ratio
and the four ratios that indicate where gross income is spent; namely
direct costs, overhead costs, finance costs and profit.
The fact that IMAG’s consultants are trained agronomists adds
another dimension to their farm business planning that others often
lack. Because they understand the physical capabilities of
the
land under management, they can use this knowledge when determining the
optimal enterprise mix.