There’s so much production work to do in the summer – anyone who has ever worked in agriculture or agribusiness knows that truth well. But even when work levels run high, the growing season is a critical time to maintain strong business relationships.
Plan to keep communication lines open with your lenders throughout the growing season. Lenders especially don’t like “surprises” when it comes to your farm business and balance sheet. Keeping the conversation rolling during the growing season helps prevent any “surprise” situations from happening, come time for a late fall or winter meeting with your lender.
Lenders appreciate farm leaders being proactive and on top of their business and numbers, as well as sharing that information with them. This also demonstrates that you’re a savvy businessperson with a high financial IQ – which can improve your relationship with them even more.
Here are three quick, practical tips you can use to put strong growing season communication habits into practice.
#1: Keep your farm’s numbers up to date
When the operation’s financial information is updated on a regular basis – even during the growing season – you never have to worry about whether you have current data available for your lenders. More importantly, with solid financial data at the ready, you’re able to make real-time decisions by the numbers – throughout the entire growing season.
Put good bookkeeping processes in place and have a detail-oriented, dedicated person (or team, depending on the size of your operation) who is responsible for keeping the numbers up to date and ready for whenever you need them.
#2: Call your lender – don’t wait for them to call you
Rather than waiting until your lender calls you for an update, offer them that information freely and proactively on a regular basis. This way, they’re getting status updates without having to do the work of tracking you down themselves. They’ll appreciate that.
Decide how often you will need to update your lender. Depending on your farm’s situation, that might be once a month, once every two weeks, or even once a week. Schedule all phone calls on your calendar and be sure to follow through with them.
#3: Be prepared to tell your farm’s story
Set aside time prior to a lender call to prepare for that conversation. First, make sure that updated numbers and estimates are ready. Then, you need to consider your farm’s “story” that those numbers are telling right now. What’s currently impacting your operation that’s being reflected in the numbers? What does your lender need to know – that the numbers alone won’t tell him or her?
Also, what plans have you put in place for marketing your crop? Lenders want to see forward-looking marketing and merchandising plans. These plans need to be flexible, but the farm leader must have a solid plan in place that they can communicate with their lenders. For some assistance with marketing plans or to discuss the impact of lender communication, you can talk with our advisors for the farm.
The opinions of the author are not necessarily those of Farm Futures or Farm Progress.