How is our Horticulture Industry performing? Check out the FY2021/22 Benchmarking Data for the WA Hort, Pome and Vegetable Sectors
Participants will work closely with an expert farm consultant who will take you through a detailed full business financial and production analysis.
This will assist you to make more informed decisions where it counts and remove some of the unnecessary stress while building a more resilient business.
The Areas of Improvement and Scale of Results the Program is Helping Growers Achieve
Typical focus areas:
- Profit retention measures: in response to the current economic climate, the program is specifically analysing 3 to 5 years of individual business data for each participant to calculate the specific impact of increases to the cost of production to the business to determine the required price increase ($/kg) to retain profit.
- Profitable crop selection: analysis has supported growers to zone in on the best performing crops in relation to business profitability and then subsequently organise production and resource deployment to maximise opportunity.
- Strengthening balance sheet data: Through greater buy-in and disclosure to the project, balance sheet data has become more accurate, which opens new potential expansion opportunities and improves borrowing capacity.
- Management practise development: Growers are increasing their understanding of the value of going deeper into trend data to identify further areas of development within the business structure to drive profitability.
- Linking paddock to profitability: Growers are developing deeper understanding of the nature and connection between paddock practises their links to profitability.
Example Results the Program is Helping Growers Achieve
- Removed $80k/year from the business cost structure by supporting the business owner to negotiate a market appropriate interest rate with the bank.
- Assessed a strong business operating efficiency, conducted lease analysis to support an opportunity to increase scale and deliver a $95k/year profit.
- Identified and removed a $40k/year cost in the vegetable sales process.
- Potential to quantify and justify the appropriate price increase to cover the rising inputs costs and return the business to a profitable status.
- Provided independently verified data to attract investment and more favourable interest rates on loans.
About the Program
“Connecting horticultural businesses with farm business consultants. We work with you to improve profitability and business resilience into the future.”
The Building Horticulture Business Capacity (BHBC) project provides an opportunity for horticultural producers to partner with Planfarm business consultants to analyse the business on an independent basis – a fresh set of eyes.
The goal of the project is to build your business’s capacity to understand the complex components that drive farm business profitability. Working with the members of your business, we’ll analyse these components and provide insights to enhance the business’s resilience and success.
Participation in the project would see you work with a farm business consultant to improve your understanding of the financial elements of the business and target areas to increase profitability.
In the open market, this service would be valued between $12-$18,000. However, due to leveraged funding provided by Hort Innovation and DPIRD to assist growers in this challenging economic time, growers are only required to contribute $1500 to participate.
The Planfarm Process
1. Business Analysis
We analyse your business with a focus on production and profit for the year of effort (your production year). This allows key performance indicators and financial ratios to be generated.
2. Providing Insight
We provide insight into your business – identifying opportunities for improvement and focus by analysing links between production, management and financial data.
3. Measuring Success
Let’s measure success. This ongoing process is conducted via annual and in season reviews. This process will deepen your financial business management capability.
What to Expect
An on farm meeting with your business to gather the required data and run through any questions you may have.
An in person review of the past season with a focus on production, cashflow, profit and balance sheet.
All Year Services
Unlimited phone/consultancy, benchmarking and Planfarm publication access.
Cost and Eligibility
Open to all horticulture business owners in WA. In the open market, this service would be valued between $12-$18,000. However, due to leveraged funding provided by Hort Innovation and DPIRD to assist growers in this challenging economic time, growers are only required to contribute $1500 to participate. This was made possible through funding from DPIRD, Hort Innovation and the Agricultural Produce Commission.
Everything you need to know
Why would I want to participate?
Let’s be honest, the current economic environment facing Horticulture business owners is one of the most challenging in decades.
Rising input costs, increased interest rates, rising labour costs and labour shortages are put an unprecedented stress on Horticulture businesses challenging profitability.
This is on top of:
- Rise of influence of supermarket chains on the access to consumers and the increased demands they place on their grower suppliers in terms of price and administration
- Variability and lack of transparency of market prices
- Greater levels of bureaucracy and restriction to access finance since the Royal Commission
- Increased levels of compliance administration
- Increased competition from interstate and overseas
- Changes to water allocations
All of these factors together place large burden on you the business owner.
This program is set up to help you navigate and meet these challenges so that you can continue to convert your efforts into well earnt profit and grow your business in the process.
So what actually happens?
To start with we will sit down and talk with you about your business and financial management practises and understand where you’re currently at.
Then we will conduct a detailed business performance analysis to understand how your business is performing. This will show you how your business is tracking against key profitability and asset growth metrics, pinpointing focus areas for greater revenue and margins. It will also give you an idea of how your business is performing against industry benchmarks.
Then we will sit down together again with you to understand the findings of the business analysis that are contained in your final report. From this we will identify what changes you can make within your business to increase your profitability and grow your assets. We will look strategically into the future as well as tactically at the here and now.
There will also be further opportunities to participate in other development and networking events with like-minded growers throughout the program.
By participating in the program, you provide yourself with a rare opportunity of taking an honest and thorough look at your business with the assistance of an independent 3rd party expert.
To participate is $1500 per grower and confidentiality is of paramount importance and is maintained throughout.
Is this for me?
This program will suit those Hort business owners who are motivated to drive more profitability and shape their business to better face the future ahead.
Participating business owners will need to be open to new perspectives, willing to acknowledge where there are emerging issues, be motivated about solving those issues and committed to following through with action based on what they have learnt and decided.
There will be an expectation of commitment to participate fully in the process in a proactive manner.
This program ‘won’t do it all for you’ but it will widen the scope of understanding of your business owner from accepting many aspects as ‘just the way it is’ to something they can investigate, interrogate and manage – therefore putting you more in the driving seat of the destiny of your business.
The program is about reducing the amount of ‘unknowns’ and providing you with the information and insight so you are better equipped to meet and respond to the demands of the current and future environment.
AM I ELIGIBLE TO PARTICIPATE?
Yes – If you are the business owner, or major decision maker, of a Horticulture business in Western Australia.
WHO ARE THE EXPERT FARM CONSULTANTS?
WA based farm consultancy Planfarm have over 40+ years experience of providing financial and business advice across all agricultural industries including broadacre, livestock, horticulture and permanent crops. Along with farm business management advice, Planfarm provide specialist advisors in agronomy and grain marketing servicing over 480 farming businesses throughout Western Australia. These services have been in response to increasing sophistication and scale of farm businesses and changes in the grain marketing environment in Australia. Planfarm advisors continue to assist clients to take advantage of the emerging opportunities in the Western Australian agricultural sector.
WHAT INFORMATION IS REQUIRED IN THE BUSINESS ANALYSIS?
Typical data required from business owners includes:
- Profit and loss, cash book from financial management software systems
- Balance sheet
- Specific Production data – including area, volumes, etc.
- Labour Information
- Water licence and usage information
I’M VERY BUSY, HOW MUCH TIME DOES IT TAKE?
Recognising the numerous demands on our time, we’ve streamlined the process so that the bulk of the work is done by the program team and that we only call on you when it’s necessary.
We estimate that in total that this will take up 6 to 8 hours of your time each year.
WHO IS FUNDING THIS
The Building Horticulture Business Capacity Program is a collaboration between Department of Primary Industries and Regional Development, Hort Innovation, APC Vegetable Producers’ Committee, APC Pome Producers’ Committee and will be delivered by vegetablesWA in partnership with expert Farm Management Consultants Planfarm.
WHAT IS THE DIFFERENCE BETWEEN THIS SERVICE AND WHAT I PAY MY ACCOUNTATN FOR?
You employ your accountant to minimise you tax liability, but the documentation they produce doesn’t necessarily tell you the true status of your business at that point in time.
The project combines analyses of production and profit to give you a very detailed view of the exact performance of the business across the financial year. This give you exactly the detail you need as a business owner to know where your business is at and what you need to do to maximise profits and longer-term business growth. Such is the rigour, in some cases participants have used this documentation in their dealings with financial institutions.
HOW CAN I BE SURE OF THE CONFIDENTIALITY OF MY BUSINESS DATA?
Great efforts go towards ensuring all data shared with the program remains securely stored and all confidentiality maintained.
Before you participate, both parties sign a strict Data Agreement form which clearly lays out how your data will be handled and managed. After that all data shared with the program are kept on secure Planfarm servers with access restricted to only the analysts performing the analysis.
In terms of your final report, only you and the farm consultant you are working with will ever see this.