The Rural Voice, 1986-09, Page 50FINANCIAL PLANNING
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- Investments & Insurance Agency Ltd 524-2773
Regal Capital Planners Ltd 524-2639
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Frank Little
Dennis Little
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PLOWS ARE NOW IN STOCK
COME & STEAL A DEAL
Tractors
Equipment
AT
LOGAN FORD TRACTOR SALES
Hwy 8, East,
Mitchell
519-348-8467
50 THE RURAL VOICE
Lorne Ave.,
Stratford
519-271-2961
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ADVICE
FARMERS MUST RUN
LEAN OPERATION
In today's economic times —
especially with high costs of equip-
ment and quotas for grain, milk,
tobacco, and eggs, among other
commodities — farmers have a
greater need than ever to run lean
operations.
A cashflow can help you get bet-
ter control. Here's how it works:
You set out for each month the
cash you anticipate getting in, then
list your monthly expenses, in-
cluding not only the cost of pro-
ducing the crop and/or feeding the
animals but utilities, mortgage
payments and other expenses.
The comparison for each month
will tell you the net cash you're
ahead, or behind. And the ac-
cumulated figure provides you
with the information you need to
anticipate what months you will
need funds so you can tell your
banker in advance.
Of course, you are also able to
tell the bank manager when the
money will be repaid, so he knows
you are using educated decisions
rather than working on hunches.
The more concrete the information
and the more you know about your
farm business — the more faith
your banker will have in you.
By preparing cashflows for each
month and presenting them to
your banker at the beginning of the
year, you will avoid unpleasant
surprises for both of you.
As well as being useful to
established farmers, cashflows are
required of beginning farmers for
government benefits, including a
partial rebate of interest expenses.
A cashflow is useful in other
ways. It's important if you are try-
ing to decide whether to buy a ma-
jor piece of equipment or to pay
someone to bring in the crop in-
stead. You'll want to study the
cashflow also if you are consider-
ing a new crop.
In the middle of the year, it is
helpful to compare the cashflow
prepared at the beginning of the
year with the actual numbers, so
that you can adjust your projec-
tions for the remaining months
based on actual experience. The
weather, for example, can easily
throw a monkey wrench into your
projections.
As in other businesses, you'll