Making a property plan

Property plans set up the basis for efficient and sustainable property management. Property plans take a whole-of property approach and are useful for both farmers and rural residential landholders.

There are a number of methods and documents that can help you to develop a property plan. The basic property plan guide below will help get you started.

Vision and values

Your vision helps to define the purpose of the business, enterprise, or lifestyle.

A vision statement:

• is an ideal future and is a picture of what you want to create, achieve and the way you want your world to ultimately be
• helps be a reminder of why you are doing what you are doing
• can be general and refer to the long-term
• can be personal and encompass whatever is important to you about your property and lifestyle.

The property vision statement provides:

• direction
• inspiration
• motivation
• confidence
• opportunity
• leadership
• aspirations.

Values tie in with vision. Values guide how you think and behave and values are used as signposts when 
making decisions. 

Goals

Goals help establish:

• where you are going
• how you are going to get there
• when you will arrive. 

Goals help focus your time and energy on outcomes. 

3 keys to setting goals:

1. Write them down
2. Make them SMART (Specific, Measurable, Achievable, Realistic and Timebound)
3. Review your goals

Constantly monitor, improve and reshape your goals as necessary.

Property mapping

Property identification

Obtain a good map of your property, one that is to a metric scale of a large enough size to clearly show the features of the property.

• Note: Aerial photographs are very useful, as well as surveyor’s boundary plans, topographic and cadastral plans.

You will need to identify the following:

• soil types and characteristics as well as areas of soil degradation
• slope
• areas of natural vegetation and vegetation type
• the presence of endangered species as appropriate
• streams, gullies, drainage lines and dams
• flood liable land
• water and shade areas for stock
• rock outcrops
• climate, rainfall and seasonality
• landscape types and physical features
• current land uses.

Making a property map

1. On an overlay of your property map, illustrate the permanent features such as:
   • the property boundary
   • waterways
   • vegetation
   • structures
   • contours
   • land types (i.e. the most productive soils to the least).
2. On another layer, sketch where features are wanted, for example:
   • fences
   • productive paddocks
   • shelter-belts
   • wildlife habitat areas
   • woodlots
   • dams
   • troughs
   • lanes
   • gates.

Rearranging fences according to land features can help you to use the land more efficiently.

SWOT analysis of the property

Carry out a SWOT (strengths, weaknesses, opportunities and threats) analysis, considering:

• the property’s strengths you can take advantage of e.g. areas of high quality soils
• the weaknesses that will need attention before they cause problems e.g. existing weed infested areas
• opportunities to develop resources further e.g. moving fence lines to improve management
• threats that could affect the property e.g. erosion.

Property notes

Write notes about:

• proposed land use
• planning for houses, sheds, stockyards, windbreaks, dams, roads and fence alignments
• methods to control and prevent weeds and pest animals
• methods to sustain or improve water quality for stock and downstream users
• vegetation management including methods and timing of any proposed clearing for increased production or efficiency as well as revegetation in disturbed areas
• the frequency of planned harvests if your property has a Private Native Forestry plan or you are considering one
• wildlife management strategies
• methods to control stormwater and prevent erosion
• ways to reduce bushfire hazards, conserve soil and preserve trees
• options for treating and disposing of wastewater and rural rubbish
• legal and planning requirements
• methods to improve stock or alternative water sources for stock.

Writing a business plan

The NSW Department of Primary Industries has published an Ag Guide writing a business plan and reviewing farm performance.

The publication provides an overview of:

• why prepare a business plan
• what is in a farm business plan
• how to write a farm business plan
• monitoring and review farm business performance.

It also contains useful templates for:

• partial budgeting
• gross margin budgeting
• development budgeting.

Get the Ag Guide

Financial management

In order to provide the lifestyle benefits a small farm, its financial resources and business decisions must be well managed. 

This includes:

• well informed budgeting of the farms financial resources to ensure long term farm business sustainability
• realistic and appropriate human resource management
• an understanding of the natural resource base of the farm, its limitations and opportunities. 

When financial resources are limited, the tendency is to look for short term solutions which can often come at the cost of the long-term health of our natural and human resources. 

Tax vs Management Accounting 

Most farm businesses use an accountant to prepare financial reports to comply with taxation laws and provide information to assist with decision making. 

It is important to be aware of the differences between financial records prepared for tax purposes and financial records produced for management purposes. 

Business managers need both tax and management reports to make informed decisions. Financial records prepared for taxation purposes can be used to extract data for management purposes. 

Tax accounts

Tax Accounts are prepared by your Accountant to fulfil the requirements of the Australian Taxation Office not for the requirements of business management. 

• Their focus is on minimising tax paid and to fulfil legal requirements.
• These reports are based on historical information and are prepared for the financial year which has no relation to the production year on a farm.
• They calculate taxable income and record the cost of assets for Capital Gains Tax purposes.
• They must enable the business to comply with GST legislation.
• Accountants use minimum values for livestock and can use the maximum allowable rate of depreciation as specified by the ATO. 

Managment accounts

• Management Accounts are set up for management purposes and used for analysing the actual financial position of the business for making management decisions.
• These reports focus on future plans and enterprise profitability.
• These use market values for livestock, plant and equipment instead of depreciated values and can be calculated over a production year.