Navigating with Confidence and Peace of Mind

October Newsletter

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Managing the family business, as well as the family and business relationships can feel like navigating stormy waters through the rocks. If this describes how you feel at times, you’re not alone. The usual harvest time stressors like weather, lack of sleep, breakdowns, employee issues, etc. pile on to the existing and often underlying business or family issues.

Lack of financial knowledge can erode confidence and have a negative impact on management decisions and relationships, causing increased stress levels and challenges to your mental health and overall wellness.

Cash Flow Analysis: In my last article I talked about working capital and cash flow and how to calculate the sources and uses of cash. Another useful tool to provide financial clarity, and help you navigate, is the monthly cash flow analysis. This is a worksheet outlining all the cash inflows and outflows per month.

Knowing your cash flow situation at least 12 to 18 months in advance provides you with the information you need to assess your cash situation and deal with timing issues well in advance of them occurring. It also allows you to align new or existing loan payments, create a marketing plan that aligns with your commitments, or plan to strategically deal with surplus cash flow or potential shortfalls.

Analyzing your cash flow situation should be done in conjunction with analyzing your working capital situation, your credit portfolio review and prior to any additional cash withdrawals, down payments, new loan payments, etc. Start with a whole farm historical and forecast analysis of cash inflows and outflows and then drill down into the month by month analysis. The previous year’s cash flow from your accounting program will be helpful in creating your cash flow projection.

Identifying an area of concern is the first step in working towards a solution. Although there are many similarities, every farm situation is unique and a strategy that considers the goals and vision of the farm and the family members, in addition to other financial indicators, will yield the best results and solution for your business. Taking a pro-active approach to ensuring you have sufficient cash flow will reduce the risk of cash flow shortfalls and help to strengthen relationships with creditors and suppliers.

My clients have found that having a solid understanding of their overall financial situation enables them to make decisions and manage their business with confidence and peace of mind, while significantly improving their relationships with creditors and reducing stress for themselves and their families.

Phone Coaching: In addition to consulting, meeting facilitation, and family communication coaching, FMI offers phone or virtual meeting coaching packages. Contact me to start a discovery discussion about how I can help you navigate with confidence and peace of mind.

Peer Group: We are accepting applications for peer group participants. For more information about how belonging to a group of your peers can help you manage your business and relationships more successfully, or to apply to be added to the waiting list, please contact me.

Presentations and Learning Events: I will be presenting or facilitating at the following events. If you would like me to speak at your industry or organization’s event, let me know and we can talk about how my speaking topic may fit with your group’s agenda.

Saskatoon – Nov 6 - CAFA Conference Navigating Transition Together – Managing Through The Storm

Tisdale – Dec 5 – Cumberland College Workshop - Strategic Planning and Financial Analysis of Your Farm Expansion Plan

Mental Health: It has been a very challenging year for many farm families and it is only natural that you or someone you know may be feeling additional stress this year. It takes strength and courage to recognize the increased signs of stress and ask for help or support someone who is in need of assistance. 24/7 crisis counselling is available at the numbers below.

SK Farm Stress Line & Rural Support: 1-800-667-4442 MB Farm & Rural Support Services: 1-866-367-3276

Would you like more help expanding your financial knowledge, increasing your confidence and improving your family and business relationships? Contact me to learn about my farm financial and strategic planning, intensive debt management and farm family business coaching!

I routinely post information that I find interesting and valuable, for my followers on Twitter @DFilipchuck and LinkedIn. Follow or connect with me on those sites to see what "makes the cut".

Wishing you and your family to finish harvest 2019 with good health and “no more snow”! Sincerely,

Managing Through The Storm

Harvest Newsletter

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It has been, and is looking like it will continue to be, a very challenging couple years for grain and oilseed producers as well as those in the cattle and forage industries. Financial management, specifically managing working capital, cash flow, debt and creditor relationships will be very important to ensure farm families are able to weather this storm successfully. If farm transition discussions are happening during this time, it can add an extra layer of stress and uncertainty for the family as well.

Working Capital and Cash Flow: A quick way to take a pulse check and a get an indication about the working capital and cash flow situation is by calculating your sources and uses of cash. Analyzing your short-term credit requirements and measuring that against your options to service those requirements, will help you identify areas of strength, as well as areas they may need to be amended, to ensure you will have adequate timing of cash flow over the next 12 to 18 months.

Sources:

• Working capital (current assets less current liabilities)

• Operating loans (authorized amount)

• Crop input lines (authorized amount or planned crop input expenses – whichever is less) Cash advances available

• Off-farm income

Uses:

• Variable expenses

• Land rental expense

• Living expenses

• Other drawings (transition payouts, etc)

• Debt-service requirement (if current portion of long-term debt is included in current liabilities, do not double count by including them here)

• Your operation’s cash flow position is the net total of the sources less the uses.

• Be mindful of the type of credit available and if this will sufficiently meet your needs without sacrificing profit. Consider your actual working capital and the timing of marketability. If there is a delay in your ability to deliver, or you choose to store your inventory longer in search of a stronger market, do you have sufficient cash resources, or available credit to manage this successfully?

Identifying an area of concern is the first step in working towards a solution. Although there are many similarities, every farm situation is unique and a strategy that considers the goals and vision of the farm, in addition to other financial indicators, will yield the best results and solution for your business. Taking a pro-active approach to ensuring you have sufficient working capital and cash flow will reduce the risk of cash flow shortfalls and help to strengthen relationships with creditors and suppliers, in addition to giving you peace of mind and reducing stress for you and your family.

Phone Coaching: In addition to consulting, and family communication coaching engagements, FMI offers phone coaching packages. Contact me for more details.

Peer Group: We are accepting applications for peer group participants. For more information or to apply to be added to the waiting list, please contact me.

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As a Farm Management Consultant, a Certified Financial Planner (CFP), a Certified Agriculture Farm Advisor (CAFA), and a Farm Debt Mediation Service Financial Expert, I provide management consulting services and coaching to farm families; helping them become more successful in their businesses, relationships and lives. I have a background and specialize in farming, family communication, financial planning, intensive debt management, strategic business and transition planning and would be pleased to talk to you about the specific challenges you are facing.

I routinely post information that I find interesting and valuable, for my followers on Twitter and LinkedIn. Follow or connect with me on those sites to see what "makes the cut".

I wish you and your family to have a safe and healthy harvest season with favourable weather and a late frost.

Summer Newsletter

In last week’s FCC Express I was asked to talk about Business Management Teams and how they can improve your farm. Over the years I have found that consultants and financial planners are often utilized reactively when there is a serious problem to address in a relatively short time frame. The outcome of working with a consultant or financial planner, that specializes in the desired area of focus, can be significantly improved if they are involved proactively from a strategic planning perspective, or in the early stages of an identified issue.

Having a consultant or financial planner part of the management team on an ongoing basis can act as the ‘quarterback’ for the team and keep all the wheels moving and in the same direction. Accountability and implementing an action plan often poses a great challenge to farm managers and a consultant or financial planner can be a great asset in ensuring things get done.

Having a management team in place that can work collaboratively together, especially with larger projects such as transition or expansion planning, can yield significant dividends financially as well as overall satisfaction, stress management and harmony for the farm manager, the farm team and the farm family as a whole.

To read the entire article click here: https://www.fcc-fac.ca/en/ag-knowledge/knowledge/a-business-management-team-can-improve-your-farm.html

Ag in Motion: I will be in Saskatoon on site at Ag in Motion on July 17. Respond to this e-mail to be entered into a draw for one of 10 free daily admission tickets to attend the show.

Continuing Education: I will be facilitating a one-day training workshop at the Cumberland College in Tisdale. During the one day workshop we will work though the components of a strategic plan and financial analysis involved in planning a farm expansion.

For more information or to enroll in the workshop click here: https://www.cumberlandcollege.sk.ca/index.php?id=70

Canadian Canola Growers Advance Program: CCGA is now accepting cash advance applications under the increased APP limits. Click here for more information and to apply: http://www.ccga.ca/hub/Pages/accepting-applications-increased-APP-limits-starting-today.aspx

Vital Information List: When a member of the farm management team passes away, there is often a lot of information that goes with them. Elaine Froese has share her “Because I love you list” with me, so that I may share it with you. I encourage you to take a few moments to review the attached list and ensure all your important information is captured where your business partners and family members can easily access it when it is most urgently needed.

Mental Health: From trade tensions, grain delivery delays, lower commodity prices, lack of moisture, bugs, cash flow shortfalls, increased interest rates to uncomfortable discussions with creditors, it is only natural that you or someone you know may be feeling additional stress this year. It takes strength and courage to recognize the increased signs of stress and ask for help or support someone who is in need of assistance. 24/7 crisis counselling is available at the numbers below.

SK Farm Stress Line & Rural Support: 1-800-667-4442

MB Farm & Rural Support Services: 1-866-367-3276

Farm Debt Mediation Service: Offers financial counseling and mediation services to farmers across Canada who are having difficulty paying their debts. This service is free and confidential and provides the services of an independent financial expert to assist with the preparation of a recovery plan to resolve the debt issues.

For more information, don’t hesitate to contact myself or the FDMS toll-free line: 1-866-452-5556

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As a Farm Management Consultant, a Certified Financial Planner (CFP), a Certified Agriculture Farm Advisor (CAFA), and a Farm Debt Mediation Financial Expert, I provide leading edge management consulting services, tools and resources to farm families and individuals. I specialize in financial management, intensive debt management, strategic business and transition planning.

I routinely post information that I find interesting and valuable, for my followers on Twitter and LinkedIn. Follow or connect with me on those sites to see what "makes the cut".