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Dairy Farming
Paying down debt....
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<blockquote data-quote="Clever Dic" data-source="post: 3582174" data-attributes="member: 2283"><p>Borrowing needs careful thought but I think its very hard to grow and plan for future business requirements without some element. As an example last year was very difficult for my haylage/hay business I actually gave away or just dumped 35% of my first cut which is the main event in quality and quantity.The reason being in a difficult year I needed much more capacity in a small window.</p><p></p><p>The result is a much reduced profit , cash flow ok as liquidating stock carried forward from previous year and a burning desire to not let this happen twice in a row.</p><p>So what I have done is buy 3 more balers plus ancillary equipment on HP as it is far more than can be funded out of cash flow in a difficult year.</p><p>However this is far more desirable and easily funded over 5 years than losing that amount of product for a second time which could damage the business irreparably. </p><p> In my monthly accounts one of the figures I look forward to following the most is my total indebtedness against total worth this is to include all borrowing,HP,OD, and creditors against Stock,growing crops,valuations and debtors and the obvious aim is to yearly improve that balance.</p></blockquote><p></p>
[QUOTE="Clever Dic, post: 3582174, member: 2283"] Borrowing needs careful thought but I think its very hard to grow and plan for future business requirements without some element. As an example last year was very difficult for my haylage/hay business I actually gave away or just dumped 35% of my first cut which is the main event in quality and quantity.The reason being in a difficult year I needed much more capacity in a small window. The result is a much reduced profit , cash flow ok as liquidating stock carried forward from previous year and a burning desire to not let this happen twice in a row. So what I have done is buy 3 more balers plus ancillary equipment on HP as it is far more than can be funded out of cash flow in a difficult year. However this is far more desirable and easily funded over 5 years than losing that amount of product for a second time which could damage the business irreparably. In my monthly accounts one of the figures I look forward to following the most is my total indebtedness against total worth this is to include all borrowing,HP,OD, and creditors against Stock,growing crops,valuations and debtors and the obvious aim is to yearly improve that balance. [/QUOTE]
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Paying down debt....
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