ON FARM NORTHERN CATTLE BUSINESS MANAGEMENTC Facing up Building a Adesire to better understand better business their own enterprise before starting succession planning was a catalyst for change Beef producers have a The ‘business’ side of the enterprise in how the Piggott family does handle on the lifecycle of and concepts such as life cycle, business. their stock and pastures, financial risk and profit (as opposed The producers attended a Business EDGE but MLA’s Business EDGE to cash flow) were traditionally left workshop, which opened the gate to program challenges them to accountants and bank managers. reduce debt, embrace technologies and tolook at another critical “However, the grazing business of set their sights on new markets. lifecycle:more professional andtoday isof their business.that Kerryn and Bradley Piggott run commercial producers need knowledge and and registered Droughtmaster herds on Bush AgriBusiness director skills to better understand their Ian McLean, who delivers business to inform management two properties – ‘Christmas Creek’ and Business EDGE workshops, said decisions,” Ian said. ‘Fairhaven’– in the foothills of Carnarvon understanding what stage a Gorge, 40km south of Rolleston, businessisin is important to analyse“It’s no longer a matter of getting Queensland. profitabilityand identify financial risk.the BAS return done on time – With their three children all contributing to producers manage multi-million the business in on or off-farm capacities, “All businesses – not just dollar businesses and it’s important agribusinesses – move from they understand how their the family hoped Business EDGE would establishment/start-up to early business is actually performing.” help them take a critical look at their long- maturity to late maturity,” he said. term sustainability. Concepts covered in the two-day “If succession planning doesn’t Business EDGE workshops include: Jack, 28, and Sophie, 21, work off-farm, but happen at the right time or business• identifying what you want 25-year-old Chloe has worked part-time owners take their foot off the pedal, your business to achieve, e.g. on the property since finishing school (with it can enter the ‘decline’ phase.” supporting children’s education, a few stints away for travel and work) and maintaining a certain quality moved into a full-time role three years ago. Hesaid businesses can also move betweenphases – forexample, a of life or sustaining specific In 2016, Kerryn and Chloe fronted up businessin latematurity can re-enter retirement plains for the two-day financial and business early maturity through expansion or • setting key performance management training workshop, backing it intergenerational change. indicators for the whole business up with two follow-up sessions and gaining to achieve these goals the confidence to do business better. Characteristics of business • understanding profit and how to lifecycle include: Succession planning • Start-up:lower equity, high capital calculate it for your business The family has started succession planning expenditure, lower cash flow • standing the level ofunder with an independent advisor. , flock/herd underperforms, debt financial risk your business is reductionis diffi cult carrying, and whether this debt Chloe said Business EDGE has helped her • Early maturity: cash surplus is productive or placing your bridge gaps in her financial knowledge, bgiens, capital expenditure falls, business in a risky position which came to light during early meetings. flock/herderformancep improves, • performing a cost-benefit analysis “I now feel more secure in knowing the debtreduces more rapidly for different business activities business has a viable future,” she said. • Late maturity:maxmum equity,i suchas capital expenditure cash rplusincreases, herd/ • extracting and analysing “Understanding where the business sits su allows us to move forward and ensure it flockoutperforms, minimal capital accounting information such expenditure, low/retired debt as operating expenditure as is sustainable to support our succession compared to capital expenditure plans.” • Decline: cash surplus shrinks, pital expenditure rises, herd/ and overheads Kerryn also gained confidence in ca flockperformance goo but falling,d • recognising and responding succession planning as a result of debtincreasing but not a concern. to issues in multi-enterprise Business EDGE. grazing businesses, such as Business EDGE was developed scale, resource competition “I was stressed about how it would all work in recognition that while grazing and diversification. ■ but Bradley and I can now see how to businesses traditionally required move the partnershpo ardso we can owners/managers to have a good Ian McLean be in a comfortable position when we handle on production aspects E: ian@bushagri.com.au eventually retire, without leaving too much such as animal husbandry and generational debt for our children,” she said. pasture management, financial MLA EDGE Network: The Piggotts are assessing different literacy was often lacking. mla.com.au/edge scenarios, such as restructuring their herd 34