Categories: How to Business

Managing for profit

Farms need to be managed carefully to make a profit. Let’s take a closer look the meaning of ‘profit’ and…

Profit is easy to understand. Take the amount of money you’ve earned from your farming (your income). Then subtract the money it has cost you to operate your business (your expenditure). What’s left is your profit.

For example, to cultivate 1ha of maize, you might need:
32kg seed – R 480
200kg fertiliser – R 900
Two hoes – R 180
Hired labour – R 750
Total expenditure = R2 310

Assume you harvested 4t of maize and sold it for R1 275/t. Your total income would therefore be: R1 275 x 4 = R5 100.

So your profit would be:
Income minus expenditure, that is R5 100 – R2 310 = R2 790.

It’s extremely important to spend your profit wisely, and to plan ahead carefully. In addition to paying for food, clothing, transport, schooling and any loans you might have, you must use some of your profit to buy seed, fertiliser and labour for your next crop! So, put money aside for this as soon as possible after you are paid.

Better still, buy your seed and fertiliser immediately so you are not tempted to spend the money on something else. If you don’t put enough of your profit aside to keep your business going, you will not be able to grow enough crops next time – and poverty will result.

To find out more about Foundations for Farming, please visit www.foundationsforfarming.org.

Share
Published by
Caxton Magazines
Tags: benefitsemering farmerexpenditurefarmfoundations of farminggovernmentincomemoenyprofit

Recent Posts

Latest rhino poaching statistics called into question

While the 25% decline in rhino poaching incidences in South Africa between 2017 and 2018 should be cause for celebration,…

2 hours ago

Beef, bacon and onion pot roast

If you’ve got a working oven, why roast in a pot? This splendid collection of techniques and delicious flavours answers…

7 hours ago

Farmer’s Weekly Tour to Nampo 2019

Join us again for this year’s Farmer’s Weekly Nampo Tour from 14 – 17 May 2019. The tour includes entrance…

23 hours ago

Do you ‘move’ or ‘motivate’ your employees?

People who simply ‘move’ in their jobs never flourish. ‘Motivated’ employees achieve success, and it’s your job to get them…

1 day ago

Organised agriculture’s wish list for 2019/2020 budget speech

Timeous and effective government assistance for South Africa’s farmers to survive ongoing drought conditions is one of the key aspects…

1 day ago

Fitting a McClellan saddle

This American cavalry saddle has been in use for 159 years. It was employed in the American Civil war and…

2 days ago

This website uses cookies.