Business Planning for the Unexpected

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Before injury, illness or other disruption strikes, prepare yourself and your business

If you had to go on leave for a month starting tomorrow, what in your farm or ranch is going to suffer?

Let’s face it – accidents happen.  To everyone, everywhere, at one time or another.  Maybe one day you’ll tear your Achilles tendon, or break a leg, or fall off a ladder. You’ll need surgery, or crutches, or a long hospital stay. You could get sick for an extended period, leaving you unable to handle your farm or ranch responsibilities.

Business disruptions can happen at any time. These unplanned events can take many different forms—natural disasters, loss of key personnel, data breaches, economic turns, personal injury.

If you were forced to be out for a period of time, think about which part(s) of your business operations would slow down or even cease?

Consider taking these precautions to protect yourself and your business in the event of your unplanned absence:

  1. Determine your ‘number two.’ Who is in charge of business operations? Is there a second-in-command who knows what needs to be done each day if you are gone? It’s a good idea to make sure you have a backup who knows your cropping plan as well as your plan for livestock feed or breeding. You’ll need someone who understands items such as fertilizer, chemical application or timing of turnout of breeding bulls, for example. We are generally lucky in rural America that our neighbors will generally step up for us in time of need. But you make can make things easier if you communicate or write down a few things that others could rely on.
  2. Determine a backup for contract deadlines. Are there others in your business who are familiar with the deadlines you have with Farm Service Agency and Crop Insurance? Make sure you have others in place who can handle those issues if you could not.
  3. Share your marketing plan. Do you have grain or livestock contracts that have to be delivered on in some future month? Do you have risk management positions in the futures market? Make someone aware of these issues or at least have a reliable person know where you keep this type of information.
  4. Evaluate and secure the appropriate insurance. Having the right amount of insurance is often a debatable question. But most will agree there is at least some relevant minimum amount of life insurance and health insurance that you should have. Don’t forget about other pertinent people in your farm or business. You may want to consider ‘key man’ life insurance on yourself or a certain employee as well as business disruption insurance.
  5. Prepare for financial and accounting issues. What would happen with bookkeeping and payroll? What about the stack of bills you were going to pay when you had a moment? Make sure you have some business protocols in place where your accountant and lender can work together if needed.
  6. Make a list of key contacts. Include a short description of who they are and what your relationship is, so your spouse, neighbor, or others can contact them. This could include your chemical/fertilizer dealer, broker, livestock purchaser or feed yard rep.

Acting now will help ensure that you’re prepared for an unexpected business disruption and go a long way toward protecting yourself, your family, and your business.

Contact a K·Coe Isom advisor with any questions, or for assistance with preparation and planning.

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