Measuring success and enjoying the rewards

October 23, 2017 4:31 pm

Ensuring your organisation has a very clear asset and business plan is essential for multiple reasons as spelt out in the previous articles in this series. In terms of performance, the plan needs to outline the expectations and key measurables to answer these key questions below.

How do we know if we are succeeding?

What are our measures of success?

How frequent are we going to report on these measures?

The majority of investors in land assets utilise financial performance as a key measure of success similar to existing investments within a portfolio. An increasing number are beginning to look further than financials and have an appetite for increased CSR outcomes in agricultural systems as has been the trend in other asset classes in recent years.

This trend captures the Total Profit generated by an organisation as it captures the increasing values of our natural resources such as our soils, plants, and environment. In addition, we can measure and report on our social impact which gives us a final scorecard of all that we are responsible for in our farming environment.

So how do we enjoy the rewards? A common theme in agricultural investments is that these rewards come less consistent than in other asset classes due to season and market conditions, over the long-term the rewards are as good or better than other asset classes. Therefore, many investors reinvest profits in the years they are generated.

Where should we reinvest our profits?

  • In existing assets – soil, plants, livestock, or infrastructure
  • In the existing business – people, technology or innovations
  • In new assets – purchasing more land to complement or expand on existing holdings
  • In future business development – value chain, marketing or vertical integration
  • Within the industry – manufacturing, distribution or logistics

 Celebrate the wins and enjoy the rewards!

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Click here to recap the series to ensuring your Australian Agricultural investment is a success