Have a back-up plan

A good back-up plan is more than a ‘Plan B’.  It should also be more than hope.  It should not be seen as a defeat. The back-up plan may change based on the direction the farm takes, but should always have the same functionality:

1. Provides emotional, family and financial support in case of difficulty
2. Provides a safe place to regroup, recover and re-evaluate
3. Provides a base to re-launch an enterprise or start again.

Effective back-up plans protect you by establishing limits, facilitating soft landings and keeping you in control. A back-up plan can kick in at a certain point (financial or time commitment) or they can be a part of the business from the beginning.  Entrepreneurs can have a proactive risk management strategy, diversification of income and utilization of partners. Back-up plans can include putting greater emphasis on a different part of an operation, off-farm employment and partners. 

Successfully implementing your back up plan can require:

• separation between your personal and business interests
• effective recordkeeping and financial management so you have an accurate picture of your financial situation
• a clear understanding of the commitment, roles and responsibilities of different partners and investors.