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  • HOLISTIC MANAGEMENT INTERNATIONAL

    Holistic Management and Holistic Management International/Healthy Land/Sustainable

    Future are registered trademarks of Holistic Management International. Copyright

    ©2012 Holistic Management International. All rights reserved.

    Holistic Financial Planning

    How it has worked for PACE

    Plan for Success!!!!

  • HOLISTIC MANAGEMENT INTERNATIONAL

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Holistic Financial Planning

    Daily

    Action List

    Targets (Intermediate)

    Objectives

    (Long Range)

    Strategy

    Policy

    Holistic Goal Quality of life, Behaviors & Systems, and Vision Statements

    Financial Decisions Productivity Pyramid

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Holistic Financial Planning

    • Making financial decisions toward your Holistic Goal

    • Facilitating important conversations

    • Analyzing your enterprises

    • Assessing potential new enterprises

    • Planning for profit upfront (not just production)

    • Defining income streams

    • Calculating a cap for all expenditures

    • Prioritizing expenses to reinvest in your operation

    • Monitoring your plan proactively

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Holistic Financial Planning The Nine Steps to Financial Success

    #1

    Annual Review

    #2

    Assess Starting Net Worth

    #3

    Plan Income

    #4

    Plan Profit

    #5

    Enterprise Investment

    Analysis

    #6

    Prioritize Expenses

    #7

    Cash Forecast

    #8

    Assess Ending Net Worth

    #9

    Monitor for Results

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Holistic Financial Planning Financial Planning vs. Accounting

    Production vs. Profit Focus

    Traditional Model:

    I – E = P

    Holistic Financial Planning:

    I – P = E

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Holistic Financial Planning

    Plan

    The best we can do at a given time

    Replan

    Does not mean our first plan was wrong.…conditions changed.

    …allows us to reach our goals.

    …we are responsible.

    …we make it happen

    …what doesn’t change is our Holistic Goal

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Holistic Financial Planning

    What’s your Process?

    Get your team together and figure out a time and

    process to make the financial plan happen.

    How do you integrate what you already do with this

    process?

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step One: Annual Review - Assess

    Progress Toward Holistic Goal

    Logjam

    Is there anything keeping us from making SIGNIFICANT

    progress toward our Holistic Goal? (Across the operation)

    If so, this is a Top Priority Investment.

    Adverse Factors

    Are other factors adversely affecting the business as a

    whole?”

    These investments are also top priority.

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Two: Assess Starting Net

    Worth - Building Net Worth

    Assets

    Cash (last year sale goats) 6,000

    Hay, grass 2,000

    Equipment (list) 12,000

    Other (savings) 50,000

    Total $70,000

    Liabilities

    Loan $1,000

    Total $1,000

    Net Worth $69,000

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Two: How to Increase Net

    Worth

    • Increase Assets

    –New equipment

    –Livestock

    –Land

    –Supplies and Inventory

    • Cash on Hand

    • Decrease liabilities such as debts and loans

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Three: Planning Income

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Three: Planning Income

    Tools to help

    •Your Holistic Goal

    •Gross Profit Analysis

    •Enterprise Budgets

    •Your Dreams

    •Your Passion & Skills

    •Matches to your infrastructure and

    resources (management inventory)

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Three: Planning Income

    Income PACE July, 2013 Sept., 2013

    Goats 50 hd. $120/hd. $6000

    Tomato 100Bu. $40/Bu. $4,000

    Total Income $10,000

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Four: Planning Profit

    Income

    $10,000

    Expense

    $3,000 $1,000

    Debt Service

    $1,000

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Four: Planning Profit

    I want a

    profit of X$ or X%.

    For:

    Savings (buffer)

    Investing (addressing key problems like logjam, enterprise weak links, or adverse factors)

    Increased Net Worth

    Improved Quality of Life

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Five: Enterprise Investment

    Analysis

    Resource Conversion

    Product Conversion

    Marketing Conversion

    Sunlight and/or raw

    resources including

    money

    Products and/or

    services

    Marketing of products

    and/or services

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Five: Enterprise Investment

    Analysis

    • A tool/method to prioritize expenditures

    • Perform it on each enterprise.

    • Identify the weak link and brainstorm solutions.

    • Use the testing questions to select solutions.

    • Cost out solutions and record it on the “Investment”

    Worksheet.

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Five: Enterprise Investment

    Analysis – Identify Weak Link

    Resource Conversion

    Top Priority Investments:

    • Education (about how to improve resource)

    • Fences

    • Water Development

    • Soil Amendments

    • Additional labor for planting/harvesting

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Five: Enterprise Investment

    Analysis – Identify Weak Link

    Product Conversion

    Top Priority Investments:

    • Education (how to improve product)

    • Expense to get more milk per animal

    • Get more animals or better genetics

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Five: Enterprise Investment

    Analysis – Identify Weak Link

    Marketing Conversion

    Top Priority Investments:

    • Education (how to sell your product)

    • Change Enterprises (due to market conditions)

    • Time of Marketing

    • Brochure

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Six: Prioritizing Expenses

    • Be a price maker not a price taker

    • Invest in your business (all expenses are not equal)

    I – P = E

    Top Priorities Maintenance

    Liabilities

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Six: Prioritizing Expenses

    • T: Top Priority Investment. Fix the weak link (or

    logjam or adverse factor).

    • L: Liabilities (essential and constant or morally

    obligated)

    • M: All expenses that aren’t “T” or “L” are

    Maintenance.

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Six: Prioritizing Top Priority

    Expenses

    T = You want to free up as much money to invest back into the business in the best place to move

    you toward your Holistic Goal.

    When adjusting cash flow, cut maintenance first, then

    liabilities, then top priority investments. Logjam is

    last to cut.

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Six: Prioritizing Liability

    Expenses

    L

    Land taxes

    Lease fees

    Loan interest

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Six: Prioritizing Maintenance

    Expenses

    M

    Living expense

    Phone

    Utilities

    Repairs

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Six: Prioritize Expenses

    Expense PACE Jan 1/06 Dec 31/ 06

    (T) Goats, crop $4,000 Mar.

    (L) Lease $500 Jan.

    (M) Water $500 yr.

    Total Expense $6,000

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Seven: Cash Forecast

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Seven: Cash Forecast -

    Balance Plan

    Subtract total expenses from total income plus the profit

    you planned to make sure your PLAN balances. If your

    PLAN does not balance you can:

    • Cut expenses

    • Use other revenues to offset deficit

    • Increase income (higher prices, sell more products,

    change enterprise mix, adjust production systems, etc.)

  • HOLISTIC MANAGEMENT INTERNATIONAL

    Step Seven: Cash Forecast

    Goats Tomatoes

    July Plan 3,000

    - Actual 2,500

    Difference (500)

    Cumulative Difference to date (500)

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