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How do I write a business plan for my farm of ranch?

A business plan is an essential tool for the success of your farm or ranch. It serves as a road map to guide your business, and it impacts your daily decisions, provides direction for expansion, diversification, and direction for future evaluation.

View our Agriculture Business Planning Workbook for a step-by-step guide that will surely put you on your way to prepare a business plan for a successful business. This workbook is designed to provide an outline for developing a business plan for your agricultural business. Each section contains an explanation, examples, and space for you to begin developing a business plan of your own.

What is estate planning?

An estate is a person’s net worth in the eyes of the law at the time of the person’s death. An estate plan is an organized manner to distribute one’s assets and liabilities after the person dies. An estate plan also provides instructions for end-of-life decision making.

Please visit the Human Risk section of our Full Resource Index to access fact sheets, free online courses, and other resources pertaining to estate planning.

What is a will?

A Last Will and Testament is the most important document in an estate plan. It is a set of instructions for the personal representative to follow when settling the estate of a person who has died (decedent). A will should identify when, how, and to whom one’s assets should be disposed of and how one’s business affairs should be addressed, if applicable. In addition, a might also name a guardian for minor or adult dependents.

Please visit the Human Risk section of our Full Resource Index to access fact sheets, free online courses, and other resources pertaining to estate planning.

What is succession planning?

Succession planning – sometimes called transition planning – is the systematic process of transitioning management and ownership of a farm, ranch, or other business from one generation to the next generation. Logic would indicate that developing a succession plan should be an obvious requirement of management and business ownership.  However complex forces are at work and despite recognizing the importance of a plan, most farm businesses decide to do nothing about succession. 

Please visit the Human Risk section of our Full Resource Index to access fact sheets, free online courses, and other resources pertaining to succession planning. Also, the AgTranstions web site is designed to help farmers and ranchers develop a plan for transitioning a business to the next generation.

How do income and self-employment taxes impact my farm/ranch business?

Tax issues are important for agricultural operations because income and self-employment taxes are a major “cost” and because many USDA programs and farm and ranch loans use a producer’s federal income tax return. The National Farm Income Tax Extension Committee is a group of specialists from across the U.S. providing information and resources for farmers and ranchers about tax-related issues.

How can I determine the financial feasibility of an alternative strategy or enterprise?

Agricultural producers are always looking at alternative production schemes (e.g. conventional tillage versus chem-fallow) or enterprise (e.g. selling calves at weaning or backgrounding). Partial budgeting is a process of estimating (1) additional returns, (2) reduced costs, (3) additional costs, and (4) reduced returns associated with the proposed change.

Please visit the Financial Risk section of our Full Resource Index to access fact sheets, free online courses, and other resources pertaining to partial budgeting and financial management.

My banker keeps using the term financial ratios. What is she talking about?

Financial ratios are created with the use of numbers taken from the various financial statements (balance sheet, income statement, cash flow statement, and statement of owner’s equity). The ratios are designed to help better understand the financial position of a business. Typically used financial ratios assess a business’s profitability, liquidity, solvency, and financial efficiency, although there are many other ratios used by financial analysts.

Please visit the Financial Risk section of our Full Resource Index to access fact sheets, free online courses, and other resources pertaining to financial management.