Crop Insurance Today May 2013 - (Page 33)

CropInsuranceTODAY Step 9-Monitoring and Controlling the Farm Business Q: How do I monitor progress over time? VisitWebsite This is the ninth in a ten-part series of articles on “The Steps of Farm Business Planning.” The introductory article for the series was published in the November 2010 issue of Crop Insurance TODAY® and additional articles will be printed each quarter. By Dr. Laurence Crane, NCIS rather than waiting for a shortcoming to become a problem. Properly administered, it allows you to make changes when alternatives are available, and to avoid crisis management. This process of measuring performance and taking corrective action will help assure that the business stays on track to meet its goals. MONITORING PROCESS Once you have a plan in place it is imperative that you monitor the plan’s activities so you can make appropriate adjustments as needed to stay on track and accomplish the goals of the plan. In fact one of the primary purposes of planning is to enable you to make informed and timely decisions when conditions change. This step is an opportunity to develop or refine the process of monitoring and controlling the business. The ability to react appropriately to uncertain events and prevent relatively minor issues from evolving into major problems, or to miss out on unique opportunities, is a significant benefit of careful planning. Effective monitoring is key to being able to react timely before an opportunity has passed and/or responses are limited. Monitoring can be described as a process that involves a series of activities. These activities include: • Identifying important factors; • Specifying a standard or range of satisfactory performance; • Knowing who, when, and how information about the farm’s performance will be collected and recorded; • Specifying the type of comparisons that will be made; and, • Developing possible responses when performance is outside the range. Even though the activities of monitoring a business may be identical among firms, the uniqueness of each business compels the owners to devise a monitoring and control procedure to fit the needs of their farm. For example, the factors that one farm owner monitors may not be the same factors that a neighbor tracks. Likewise, the range of acceptable performance will vary among businesses. The key to successfully controlling a business is the owners’ ability to identify and monitor factors appropriate for their farm. Identifying the Factors to Monitor A basic rule is to monitor those aspects of the business that are most critical in fulfilling your long term goals. Examples of important What is Monitoring and Control? Monitoring and control is the practice of looking for indications of how the business is progressing in the short-term and how the current progress will impact long-term performance. It is a process of looking for symptoms CROPINSURANCE TODAY ® 33

Table of Contents for the Digital Edition of Crop Insurance Today May 2013

President's Message
2012 Year in Review
2013 Annual Convention Great Success!
Max Erickson Awarded Outstanding Service Award
Larry Heitman Pesented Leadership Award
Leadership of NCIS Regional/State Crop Insurance Committees
How Do Farmers Manage Risk When It Comes in So Many Forms?
Step 9-Monitoring and Controlling the Farm Business Q: How do I monitor progress over time?
Three Industry Stalwarts Presented Lifetime Achievement Awards
Cover Crops
Crop Insurance Plan Comparison
NCIS Retirements

Crop Insurance Today May 2013