Is your Agribusiness Financially Flexible?

Make sure you can do what you need to do when you need to do it.

‘Stay committed to your decisions, but stay flexible in your approach’ – Tony Robbins (US Motivational Speaker)

While there’s no set definition, financial flexibility means you can do what you need to do on your farm when you need to do it. You may need to respond to a crisis (a major machinery breakdown in the middle of harvest or seeding) or avoid a risk. You might need funds to take advantage of new market opportunities or buy stock and machinery at other times. Being financially flexible gives you a solid foundation to build your business on. It means you can plan for the future, while making the best financial choices along the way.


What are the benefits of having a financially flexible agricultural business?

There are several benefits of being financially flexible in agribusiness.

  • Respond quickly to change – when you’re financially flexible, you can make quick decisions when situations arise. This could be the difference between scaling production or losing a sale.
  • Establish future stability – without financial flexibility, you might be locked into long-term debt to pursue a new opportunity. This may prevent you from exploring long-term growth and building a sustainable business.
  • Adapt quickly – when your finances are flexible, you can pivot, adapt to change or grow easily.
  • Focus on running your business – with financial flexibility, you don’t need to waste time thinking about making a change or organising finance. You can simply take the opportunity and get on with running your business.
  • Build a more stable business – if you have to juggle the finances every time something needs fixing or you want to start something new, you’re going to be stressed. If you’ve built financial flexibility into your business, you’ll be calmer, and your business will run more smoothly.

These are all general benefits that apply across most types of business. There are also several specific benefits of having flexible funding options that can help agribusiness.

Flexible funding:

  • helps with operations and cash flow, especially if there are seasonal differences.
  • provides for Farm Management Deposits (FMDs)
  • supports your retirement and succession plans
  • assists when you need to buy assets at short notice
  • makes it easier to deal with June 30 tax planning


Creating financial flexibility in your business through planning

Hopefully, you can see being financially flexible benefits your agribusiness. But you might wonder how you can shift from your current situation to have greater financial flexibility.

Start by working with your financial advisor, broker or accountant to draw up a solid business plan. When you have a plan in place, you’ll be able to identify where you might need flexibility.

Once you’ve developed a plan, you need to create a detailed budget. Knowing when regular expenses occur and allowing a buffer will ensure that you can build long-term financial flexibility.

Work with your broker to ensure you have the right financial mix in place. Debt can be a helpful instrument when used strategically, and that’s where your broker will ensure you get the best outcome. Taking advantage of redraw facilities on existing loans could also be an effective way to build financial flexibility.

Avoid tying up all your funds in machinery or buildings that don’t generate profit. With machinery, you might consider whether hiring a piece of equipment gives you greater flexibility, especially if it is something you only need to use a couple of times a year.

Leasing equipment also frees up credit for investment opportunities or to respond to a crisis.

Another crucial element is how you use the profits in your business. While it might be tempting to pay down debt, buy new equipment or pay staff bonuses, this sort of spending may not support financial flexibility.


Creating financial flexibility by changing the way you do business

Building financial flexibility is more than just planning and restructuring your finances.

How are you creating revenue? Can you diversify the revenue streams in your business? For example, are there other crops you could plant? Could you open a farm shop or offer farm stays? Bringing in more revenue with your existing resources will create greater financial flexibility.

But make sure you avoid costly mistakes. A poorly thought out additional revenue stream could turn into an expensive mistake, which is hardly going to secure your future financial flexibility. Before you jump in and launch a new ‘side hustle’, you need to do your research, get advice and plan.



The path to a more financially flexible future will not be the same for every business. Just as every farming operating is unique, so too are the options available to you.

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