Getting down to business
21 October 2016
Is your business capable of providing you, your family and partners with a reasonable rate on return on your valuable capital investment?
If you don’t know, register for the two-day MLA BusinessEDGE course in Orange on 15-16 November and discover the three pillars of business performance.
The aim of BusinessEDGE, being offered across southern Australia for the first time this year, is to assist livestock enterprise owners and managers to develop a better understanding of the health and overall long-term sustainability of their grazing business.
BusinessEDGE presenter and agricultural consultant John Francis, from Holmes Sackett said the three pillars were:
- the income statement
- the cash flow statement
- the balance sheet.
The income statement provides information about earnings before interest and tax after variable and fixed expenses, profit and loss, as well as reflecting changes in inventory.
The cash flow statement is important as it describes liquidity, which tells you about the ability of the business to meet day-to-day expenses, while the balance sheet sets out the business’s assets, liabilities and therefore the owner’s overall equity in the business.
With these three pillars in place, business owners will be able to assess strengths and weaknesses as well as trends in profit, cash flow and equity for a period. A business in a healthy position will be able to demonstrate strong cashflows, good profits and growing equity.
The response from the participants of the Victorian launch of BusinessEDGE earlier this year was extremely positive, confirming how valuable this knowledge is to owners of grazing businesses. All elements of the workshop evaluation were rated in excess of nine out of 10.
“Thanks so much for organising the course. I’ve learnt more about finance in the last two days than in the last 20 years.” Jane, Briagolong
“…I just wanted to let you know that it’s the best money I have ever spent and thanks”. Leo, Nicholson
The ‘Setting Directions’ module of MLA’s More Beef from Pastures is also a great place to obtain some clear and concise information about how producers can set clear business objective and the strategic direction of a grazing enterprise. This module also has some great tools including business plans, partial budgeting and a cost of production calculator.
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