Glossary of Terms
Some of you told us that terminology is a barrier to improving your farm business
management. In fact, many farm business terms are misused and misunderstood. What
do they really mean? Here’s a quick and easy glossary to help you get started.
Business plan
A written document that outlines where your farm business is going (production,
customer base, future opportunities, impact of technology, etc.) and how it’s going
to get there. The plan is a living document that covers all aspects of your business.
It should be referred to often and change with the times.
Benchmarking
A process that compares your farm to the best ones in the sector so you can see
where improvements need to be made to get on par with your competitors.
Commodity marketing
Selling a product or service without adding any additional value.
Culture shift
Changing the way things have always been done to adapt to the realities of today.
Diversification
Producing more than one kind of product or service to manage your risk and maximize
profit potential.
Farm business management
Implementing your business plan on a day-to-day basis. It encompasses all aspects
of your farm – from marketing and production to human resources, financial analysis
and your lifestyle.
Farm business planning
Developing your business plan with short- and long-term business and lifestyle goals
and taking into consideration the potential influence of external factors.
Farm advisor
Someone who understands the complexities and uniqueness of farm businesses and farm
families and can give you good advice and a fresh perspective.
Human resources management
Finding and keeping good employees.
Innovation
A new idea or object that will bring you greater success.
Looking beyond the farm gate
The act of looking for opportunities to sell your product or service outside of
the traditional markets.
New approach
Thinking and behaving differently.
Niche marketing
Offering a unique product or service to meet a customer need and to deliver your
farm maximum profit.
Risk management
Identifying and assessing the types of things that may put your farm business in
jeopardy. Also includes taking actions to prevent these risks from having a serious
impact.
Strategies
The actions you take to reach your goal.
Succession plan
A formal document that outlines who will take over your business including when
and how it will be done.
Specialized marketing
See niche marketing.
Time management
Using your time wisely to achieve a healthy work-family life balance.
Value-added agriculture
A process of increasing the economic value and consumer appeal of an agricultural
commodity.
Value chain
A string of players (input suppliers, farms, processors, retailers, consumers, etc.)
who work together to satisfy market demands for specific products or services.
For those of you looking for definitions of financial terms, the Credit Canada (FCC) website is a great resource.