Short Term

Short-term farm business planning

Many farmers tend to plan well for the short-term, and planning budgets and forecasting cash flow for the next six to 12 months is an essential part of good business management. Short-term financial planning centres around how to manage the gaps where income and expenditure are not balanced and extra short-term finance will be needed.


A budget is in general terms a list of all planned costs (expenses) and income (revenues or output).

Budgeting is about understanding how much income the business has, how it is to be spent or otherwise accounted for, and this information can then be used to plan how to best allocate those funds.

Partial budgeting may also be appropriate where changes in business methods and systems are investigated, such as the potential of short-term joint ventures like a contract farming agreement.

Capital investment in the farm business can provide short or long-term benefits, depending upon the type and scale of the project.  Being able to calculate when the investment will provide a large enough return to be able to cover the original cost is essential when planning for the future profitabilty of the farm.

The cost of machinery is one of the highest and worst-accounted expenses in farming; many farmers do not account effectively for running costs such as servicing, maintenance, fuel and insurance.