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Ag YEAR 1 > Farm Business Managment > Flashcards

Farm Business Managment Flashcards

1
Q

Organisation

A

Goal-directed and deliberately structured

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2
Q

Social entity

A

Made up of two people or more

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3
Q

Goal-directed

A

Designed to achieve an outcome

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4
Q

Deliberately structured

A

Tasks are divided, different responsibilities are assigned to designated members who will produce the best performance

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5
Q

Efficiency

A

Refers to number of resources- used to produce a desired volume of product

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6
Q

Effectiveness

A

Refers to the degree to which the organisation achieves their desired goals

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7
Q

Performance

A

Organisation’s ability to attain their desired goal by using resources both efficiently and effectively to become a profitable company

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8
Q

Management

A

Attainment of the organisation’s goals by planning, organising, leading and controlling resources efficiently and effectively

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9
Q

Managers

A

In control of assuring these things are done correctly, by coordinating and motivating other people in relation to the organisation

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10
Q

Resources:

A

Land
Money
Water
Human resources

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11
Q

4 Management functions

A

Planning
Organising
Leading
Controlling

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12
Q

Farm Business Management

A

Involves the strategic, tactical and operational decisions that aim to optimise the use of resources for the maximum productivity and profitability

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13
Q

Importance of Farm Business Management

A

Plays a crucial role in modern agriculture by enhancing efficiency, ensuring sustainability and adapting to market and environmental changes

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14
Q

3 pillars of sustainability

A

Economic
Environmental
Social

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15
Q

3 roles of Farm Business Management

A

Efficiency and effectiveness
Ensuring optimal productivity
Strategic planning

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16
Q

4 functions of Farm Business Management

A

Planning
Organising
Leading
Controlling

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17
Q

6 planning strategies in Farm Business Management

A

Strategic planning
Setting long term goals
Defining the farms vision
Diversification
Sustainability
Market positioning

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18
Q

Crop rotation

A

Rotating different crops on each field to enhance soil fertility, reduce pests and improve yields

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19
Q

Diversification

A

Expanding agricultural activities into non-agricultural business types to spread risks, improve resilience and enhance farm profitability

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20
Q

SMART

A

Specific
Measurable
Achievable
Relevant
Time bound

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21
Q

4 factors influencing decisions

A

Market trends
Environmental conditions
Technological advancements
Government policies

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22
Q

SWOT

A

Strengths
Weaknesses
Opportunities
Threats

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23
Q

5 ways of understanding management accounts

A

Profit and loss statements
Shows farm revenue, costs and profits over a specific period of time
Essential for assessing profitability and financial performance
Balance sheet (snapshot of a farms financial position, showing assets, liabilities and equity)
Critical for assessing financial stability

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24
Q

Precision agriculture

A

Using technology to apply inputs more accurately, reducing costs and environmental impacts

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25
Efficiency metrics
Used to measure productivity and operational efficiency
26
3 examples of risks
Climate Market Operational
27
3 examples of risk management techniques
Crop insurance- risk mitigation tool Diversification- used to reduce risk exposure and stabilise the farm income by spreading the risk across different enterprises Future contracts- protect against market volatility and secure a stable future income for the farm
28
3 examples of marketing farm products
Direct to consumer- farmers allowed to sell directly to consumers, reduces supply chain and increases profitability Subscription based CSA program- provides consistent income and builds loyal customer base E- commerce platforms- enable farmers to reach a broader audience
29
CASE STUDY- Marketing farm products
RIVERFORD- successful company who used social media and E-commerce to sell organic products and build a brand presence online
30
Post brexit challenges
Navigating new regulations and trade barriers
31
2 examples of human resource management
Labour management- seasonal labour, ensuring compliance with regulations Investing in training and upskilling of farm workers- crucial for adapting and improving the farm productivity
32
4 examples of environmental management
Organic farming Conservation tillage Reduce environmental impact and improve soil health Farmers must adhere to environmental regulations, to be able to receive funding and support
33
3 examples of technology
Precision farming- involves advanced technologies like GPS and sensors Robotic farming- requires less labour, but more workers must be more skilled to use the technology, reduces input costs and increase yield efficiency Farm management software- help manage data, analyses performance, make informed decisions regarding crop and livestock management
34
2 examples of sustainability and climate resilience
Water conservation techniques- drought resistant crops, renewable energy sources (solar+wind), reduces vulnerability to climate change No till farming- use of cover crops, carbon sequestration through agroforestry helping to mitigate emissions
35
3 examples of digital transformation
Use of big data- helps optimise crop monitoring, predict weather patterns, streamline logistics, leads to better decision matter and increased productivity Robotic automation- improve harvest efficiency AI- predictive analytics
36
Legal and compliance issues
Protecting farm innovations and securing farm legacies
37
2 global trend impacting agriculture
International trade agreements Global food security challenges
38
Planning
Management function concerned with defining goals for future performance and how to attain them
39
4 benefits of farm planning
Clarifies direction Helps motivate people Helps ensure efficient use of resources Will help to measure progress
40
What is the mission?
Vision Values Mission Goals
41
Strategic plan
The mission of the company, future goals and ambitions - very broad and general
42
Tactical plan
Specific actions to support or work toward the strategic plan - specific actions and ideas but not very detailed
43
Operational plan
Specific plans for day to day activities that will support and enable the tactical plan- very detailed
44
10 examples that planning involves
- Appraising goals and objectives - Assessing the industry - Preparing for inventory - Selecting alternatives - Determining inputs and production - Selecting prices - Calculating expected costs and returns - Estimating range of costs and returns - Analysing probable results - Developing an operating plan
45
Plan summary
Reference to the mission statement and strategic and tactical goals
46
Financial summary
Reference to current financial data and future financial projections
47
Farm description
Existing and future descriptions of farm enterprises and farm resources allocation and use
48
Implementation plan
Completing tasks to deliver a project successfully
49
5 reasons why risk is attached to decision making
Increased competition Competitor churn Customer demands Investment requirements Technology change
50
International management
Management of business operations conducted in more than one country
51
9 steps of the decision making process
1. Decide if a decision needs to be made 2. Define what the specific problem is 3. Clarify the objectives of the decision 4. Collect the data 5. Generate alternative options to the decision 6. Evaluate the alternatives 7. Make the decision 8. Implement the decision 9. Monitor the outcome
52
Strategy
How people organise major resources to enhance the performance of a farm business/enterprise
53
Strategic management
Set of managerial decisions and actions to formulate and implement strategies
54
Programmed decisions
Made in response to recurring organisational problems Handled by a routine approach Enable decision rules to be developed
55
Non-programmed decisions
In response to unique, poorly defined and unstructured problems that have important consequences for the organisation
56
Bookkeeping
Provides details of a business's transactions over a time period Insufficient to determine the profitability of a business Consider the increased value of stock on the farm Value of products used for personal use Considers capital investment Generally, to record and track all financial transactions of the farm
57
5 benefits of bookkeeping
Financial clarity Plan ahead Tax compliance Informed decision making Easier to access loans and investments
58
Variable costs
Vary in proportion to scale of an enterprise (crops, fertilisers .etc.)
59
Fixed costs
Do not vary regardless of output of the enterprise (rent, electricity .etc.)
60
Enterprise
Division or department of a total business
61
Output
Value of production, yield times product price
62
Gross margin
Output minus variable costs
63
Cash flow
Movement of funds through a business
64
Capital
Wealth of a business at a particular point in time, collection of physical and financial assets that have a market value
65
Gross profit
Sales balanced against opening and closing valuations of stock and cost of sales
66
Net profit
Gross profit balanced against all items of expense
67
Accounting period
Revenues and expenses over a given period of time
68
Depreciation
Items get old and lose value
69
Stocks
Defined loosely as possession of the business that are likely to be consumed in one production cycle
70
Capital
Wealth in the form of money or other assets
71
Debtors
Debtors owe to the business
72
Creditors
Creditors are owed from the business
73
Benchmarking
Comparison
74
Wayleaves
Leasing part of land for electricity
75
Cash flow
All cash items Throughout the year
76
Balance sheet
What the business has What they owe Year end
77
Profit and loss account
Cash items Non-cash items Relating to trading activities Year-end
78
What 3 things dictate the success of a business?
Equity Liquidity Profitability
79
Equity
Fairness and justice Make adjustments to imbalances
80
Liquidity
Ability of a company to convert their assets into cash without losing significant value
81
Profit
The costs that relate to the production of an item are matched against the income that the item generates
82
5 reasons why we need profit and loss accounts
Supports decision making Shows the profit made from trading activities Allows owner/entrepreneur/manager to understand profitability of the business For potential funders, partners and entrepreneurs to asses For the government to file the taxes needed by the law
83
Own consumption
Non-cash item in the profit and loss accounts
84
What's the point of a profit and loss account?
Important to tell you if the business is profitable and generating cash, see if there is the potential to expand the business
85
Importance of valuing stock
Identify and carry forward those costs incurred before that date, but which will not give a rise to income until a later period By carrying forward those costs, they can be matched with the income when it arises
86
Uses of valuing stock
Growing and finished livestock Growing and harvested crops Unused inputs (fertilisers)
87
Reason of valuing stock
Legal reasons (HM revenue and customs)
88
Calculation for profit
Revenue + Closing valuation - Opening valuation - Expenses
89
Valuation
Items produced or bought but not yet used or sold
90
What does revenue include?
Debtors Own consumption
91
What does expenses include?
Creditors Depreciation

Ag YEAR 1 (7 decks)

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