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Canuck_2
Senior Contributor

Re: Any one else use a spreadsheet.

4wd paper works with a calculater and an eraser.

A good spreadsheet will save a lot of time and allows you to 'what if'.

 

I started farming with cash flows for each year done on paper, in pencil, with a calculater and an eraser.

It took some time and a lot of eraser work until I came up with something the bank manager might like. When I got to that I quit and gave the sheets to the banker.

When we got a computer I built a spreadsheet for my cashflow first (using Visicalc in those days I think). And I was able to keep a copy on machine for me and input the actual income and expenses each month which allowed me to see a cash problem or surplus as it was developing instead of when problems began.

It allowed me to tweek numbers quicker and easier and so I presented my Banker with my best guess AND what it might look like if weather was not good or prices fell or a worst case look at what my loan needs might be.

I also gave him a copy of my best case and a list of things I would do IF I had the additional income.

Interest was automatically calculated so I was able to see what differing interest rates would do too with differing amounts on loan.

Great way to spend a couple of afternoons to see what things could impact the bottom line.

 

Crop budgets were the same as 3 different yield levels were built into mine so I could quickly see what the difference was to bottom line of average, good or bad yields.

 

I now have a 35 year old daughter who can improve my spreadsheets in a few minutes as she uses them all the time in her job.

Now they work well and look better too.

 

Wouldn't be without a spreadsheet for decision making except maybe at a sale, where as you say, you have to think on your feet but I seldom attend a sale except local ones to have a visit with the neighbours.

 

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kraft-t
Senior Advisor

Re: Any one else use a spreadsheet.

Actually, it was more involved than that. They told me what they wanted and I used the spread sheet to determine if they were out of line. But I also use a different spread sheet to anticapate my own cash flow. Not whether the farm istelf would cash flow but whether I could pay for under differing circumstances.

 

Don't use a spreadsheet if you don't care to but those that do may find it quite informing. I don't need on the spot thinking. I have time to carefully weigh my options.

 

The land in 2007, I paid what the sellers asked. I rented from those folks for 27 years and if I was going to pay anyone too much it just as well be them. Good land at a hefty price but is now paid for and worth far more.

I guess it will cash flow now. Maybe help me buy the next one if i am so inclined.

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roarintiger1
Honored Advisor

Re: Any one else use a spreadsheet.

Most good businessmen would be able to use a spreadsheet, but also most good businessmen can make a decision based on what they know in their head and what they feel in their gut............and no, I don't mean indigestion!

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sw363535
Honored Advisor

Re: Any one else use a spreadsheet.

Hard to tell the difference some times. Smiley Happy

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kraft-t
Senior Advisor

Re: Any one else use a spreadsheet.

using your head is what you are supposed to do after you compile the information. Hunches can be good or bad. I don't buy at auctions so I don't need rapid decisions.

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