Holmes Sackett Benchmarking

Identifying your potential profit

                                                        Benchmarking Model (on Youtube)

Farm benchmarking is a process that analyses the base productivity of the whole farm business and individual enterprises within the farm. The results and their financial consequences, are compared to the results of other farms ranked into bottom 20%, average and top 20%. These standard benchmarks form the basis from which improvements to the business can be identified.

Benchmarking brings objectivity to the analysis of performance, and identifies the strengths and weaknesses of the business. The value of benchmarking is in providing the basis for good decision making to achieve additional profit. Increases in profit of approximately $45,000 are readily attainable.

Holmes Sackett benchmarks more farms than any other firm in the eastern states. We have over 11 years worth of historical data which allows for comparison of trends over time.

There are two ways to benchmark your farm business;

§   Standard benchmarking analyses past business performance

§   Benchmarking the budget analyses potential future business performance

Benchmarking can be completed on a calendar, production or financial year. Paddock records, accounting reports and receipts are sufficient to complete the process. Additional time will be necessary for first time benchmarkers as the processes and requirements will be unfamiliar.

As a participant you will receive:

§  A farm business management report comparing whole farm and individual enterprise performance to the standard benchmarks.

§   A copy of AgInsights – A 130 page report analysing the collective data, summarising the key issues in each enterprise, and explaining the difference between the top 20% and the rest.

§   Access to an interpretation service

-     First time participants receive two free hours of consultation time per benchmarked farm.

-     Participants can engage Holmes Sackett consultants to help interpret the results and develop strategies to improve profitability.

Holmes Sackett understands that the information provided is commercially sensitive and has developed a protocol to prevent identification of individual farm businesses.

Frequently asked questions

Why should I benchmark my farm business?

Farm benchmarking will help you achieve high levels of profitability, sustainably over time. By identifying what the best producers are achieving from similar farms, benchmarking will allow you to get a more accurate fix on how much room there is for you to improve. Benchmarking analyses business performance and will provide the basis of good decision making to achieve additional profit. 

Why should I benchmark with Holmes Sackett?

Holmes Sackett now benchmark more farms than any other firm in the eastern states. We have over 11 years worth of consolidated historical data which allows for comparisons of short term and comparisons of trends over time. We have a rigorously tested system that can cope with any enterprise and any enterprise mix.

What information will I need to complete the process?

The information required can be seen in detail by appraising the input form. A summary of the information can be found below.

§      Whole farm

Assets and liabilities

Overhead expenses

Labour- allocated by time spent on each enterprise

Rainfall and land description

§      Livestock

Enterprise expenses

Opening and closing numbers

Deaths

Number of females joined

Date of joining or lambing/calving

Breed of ram/bull

Records of sale transactions through the year including – number sold, weight at sale, price received, selling costs, month of sale and kilograms of wool per head at the time of sale if applicable

§      Crops

Crop

Area sown/area harvested

Enterprise expenses by crop enterprise

Price received

Yield

Opening and closing inventory

How much time will it take me to benchmark?

For most participants it takes approximately half to one full day to complete the input. The time taken to enter the data into the input forms varies depending on the records of the participant. In the first year it will take more time depending on how the records are set up. Holmes Sackett staff are always available during business hours to assist in the entering of data if required. Some adjustments to the chart of accounts and records kept will make subsequent years easier.

When can I do it?

Benchmarking can be completed on a financial, calendar or production year. We encourage participants to benchmark on the production year (April to March) as

1. The report would be generated earlier, allowing the information to be used in budgeting of the next financial year, improving management decisions; and

2. It simplifies the inputting process for farms with winter cropping because harvest income matches cropping expenses and for cattle trading, cattle are usually bought and sold within that period.

How is the result reported and what will I receive?

Holmes Sackett benchmarking includes:

§     An individual farm report comprising of whole farm performance and a summary of individual enterprise performance compared to the bottom 20%, average and top 20% of all farms analysed, (Refer to sample report).

§     A copy of AgInsights – Knowing the past: Shaping the future Information in the publication identifies key performance indicators, performance trends over time, enterprise comparisons for profitability and sustainability issues. Individual farm performance of all benchmarking participants is included in the appendices as pooled data. This provides the combined data that forms the benchmarks for the bottom 20%, average and top 20% annually.

§      Free two hour consultation providing independent and objective ideas and advice helping to answer questions raised from your report and discussing results on a ‘one on one’ basis. This free offer applies to one phone consultation only and further time developing strategies will be charged at commercial rates.

§      Historical data. Once more than one years data has been collected, you receive a report containing each year’s data and the average performance for the whole farm and main enterprises.

How do I know what to do with the information when I receive it?

For a quick overview of how your farm performed, study the graphs outlining farm fund movements, the distribution of total farm assets and the comparison in profit per hectare between all your farms enterprises and how much of the effective area they utilize.

Work through the information and look for the differences between your farm and others benchmarked. Many of the differences will occur as a result of information that is investigated at the enterprise level.

At the enterprise level you will be able to compare your results with the bottom 20%, average and top 20% of all farms analysed. This will help to identify the differences between these different farms and your own. By looking at how much your enterprise differs in terms of total income and expenses from the top 20%, you can quickly ascertain if a problem exists with income, expenditure or both. After that look for explanations of why the differences occur in, for example, individual expenditure items.

How much will it cost me?

There are two ways of benchmarking your business:

§             Standard benchmarking

Analyses base productivity of the whole farm business and individual enterprises and then compares that result and the financial consequences of it to other benchmarked farms. The results are provided in a report at the end of your chosen year. The price for the current year is $480 (GST excl) per participating farm per annum.

§             Benchmarking the Budget

This service analyses budgeted performance allowing up to three different changes to the budget during the year. Benchmarking the budget gives you the opportunity to manipulate the outcome while the opportunity to identify additional potential profits still remains. The price for the current year is $720 (GST excl) per participating farm per annum.

How is the privacy of my information dealt with?

Holmes Sackett understands that the information provided by benchmarking participants is commercially sensitive. We have protocols in place to prevent the identification of individual farm businesses and their performance.

At no stage are any individual farm’s results identifiable. We have surveyed participants on this issue and 95% approved the publication and sale of consolidated data because it helps to minimise the cost of the service as well as providing additional analysis and discussion of the results in the AgInsights publication.

Okay, what do I do now?

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