A recent topic of discussion was whether benchmarking reports added value to a finance proposal presented to a bank.

My answer was a resounding yes, with the caveat that proper explanation needed to accompany the report.

There are multiple agri-consulting firms that run benchmarking in their services.

The two I am most familiar with are Pinion Advisory and Farm Owners Academy.

Their reports always add value to my finance tender.

There are a couple of reasons for this.

The benchmarks are really useful in adding raw data and context around business performance and, more importantly, farming operations that benchmark are normally ahead of curve in relation to overall business performance.

If an agribusiness has been benchmarking for a while, it usually means it has engaged external advice on various areas of its business.

It also shows the operation has identified via the report what the biggest bang for its buck is in relation to improving performance.

An agri-consulting firm can add real value if it takes the time to fully engage with clients regarding what the numbers really mean and where best to concentrate efforts.

A benchmarking report with lots of nice colours and numbers loses its effectiveness without proper engagement and explanation from the consultant.

If the benchmarking report is to be used to present a finance application to a bank, then it is incumbent on the broker or banker to understand what the report really means and to have the ability to explain how this adds to the value proposition of the customer to the bank.

Few bankers or brokers have this skill or knowledge.

The one percenters count in business, and an agribusiness is the same.

Sometimes it can be hard to identify what makes the biggest difference.

Often improvement is incremental, and it can take time to show up on the bottomline.

Without clear direction and focus on the profit drivers, the temptation is there to chase the shiny new toy and not keep on track.

As my school report said, and I am sure many others did as well; “easily distracted”.

The main profit drivers of price and yield are obvious, but there are aspects of that equation that are outside the control of a farming operation, even a blue-chip one.

There are other ratios that a benchmarking report can track that will identify areas within the business owners’ control that can be improved.

As the saying goes, control the controllables.

Benchmarking reports can add value to an agribusiness operation in many ways.

These include negotiating better finance facilities, and as importantly as a way to set the baseline to measure overall business improvement over time.

The main thing is with all reports of this nature, is that they don’t remain on the shelf collecting dust and are viewed as a key component of continual business improvement.