Being a fruitgrower is one of the more complex ways of earning a living.
In particular the lead time between planting and harvesting the first commercial crop and, for some crops, the long period between harvest and receiving payment, make long-term (strategic) decision-making that bit trickier than for many other industries.
And as another season rolls on, before the last has yet finished, this article presents some thoughts on the process of decision-making in the business.
Not so much the day-to-day operational decisions which tend to be easier, but the strategic decisions that shape the future and involve the big dollars. How do these get made? Is there any way of making them with more confidence? Do they have to be complex?
Formal and informal planning
Long-term decision-making comes under the heading of business planning. If you were to undertake a diploma course in horticulture, one of the subjects would be that of business planning and you would learn how to construct a business plan to encompass production, marketing, human resources, finances, and so on.
Whilst I know that some businesses will have written business plans in place, I suggest there are many who do not.
Through many years of working with large-turnover agricultural businesses I have never yet heard a bank manager ask for a copy of the business plan.
It would be a rare fruitgrowing business that undertook a discounted cashflow analysis before planting a new block, for example; yet professional advice would suggest that such a decision requires a rate of return analysis before any money is spent.
Formal approach
I have worked with businesses whose owners instinctively take a formal approach to the way they work.
In its simplest form, daily and seasonal events and information are recorded in notebooks or diaries.
Informal approach
However, I suggest that the majority of business owners operate in an informal way.
That is, recording may be minimal, a formal planning process is non-existent, decisions are made with little analysis, and so on.
Despite the exhortations of professionals that business plans should be used, my experience suggests that is not the norm.
I don’t think the lack of formal planning is restricted to farming. I’m sure there are tradies, retailers and manufacturers who have no tangible process around decision-making.
In fact there is even a small industry based around highly-paid professionals who are very good at their work processes—but who need someone to help them organise their personal lives which have declined into chaos.
Tools that may help
So, if we assume that most strategic planning decisions are largely informal, and the passing of seasons ploughs on quickly and relentlessly, are there any tools that the time-poor, orchard owner can use to make those big decisions easier?
The following tools may be of help. The main points are that each does not take long to construct, and once in place, is not difficult to update.
Most businesses I work with make decisions in the informal way, but I have found that the preparation and discussion around each of these tools helps to create an understanding of the bigger picture whenever big decisions are being made.
The objectives are to provide meaningful information simply and quickly.
What does everyone want?
I see the Family Plan as the foundation stone for everything else.
(Continued next month)
See this article in Tree Fruit Oct 2015
