Wisconsin Risk Self Assessment			Printable Version

RISK SELF ASSESSMENT FOR FRESH MARKET PRODUCERS

This is a self-assessment to help you identify risks facing your fresh-market farming operation and to determine actions that can mitigate those risks.

Insurance Products

1. If a natural disaster would cause extensive damage to your crop, how would your business manage the loss?

___ I have savings that would cover.

___ With the money I have saved on crop insurance, I should have sufficient

funds.

___ I have multi-peril crop insurance.

___ I’m insured against hail.

2. If fire destroyed your farm facilities and equipment, how would you rebuild?

___ My farm buildings and equipment are insured and I have reviewed it

within the last two years.

___ My farm buildings and equipment are insured.

___ I would go out of business or retire.

3. Do you have adequate insurance to rebuild at today’s cost?

___ I have full replacement value and have reviewed it in the last two years.

___ I have a great credit rating and would get a loan.

___ I would have to do with whatever my insurance company would pay.

___ I could not rebuild.

4. Are facilities critical to your operation?  If so, how would you sell your produce without them?

___ I’m insured and my insurance will provide temporary equipment.

___ I have a friendly neighbor.

___ I belong to a cooperative and they will pack my produce.

___ I’ll set up a tent out front and hope people will come buy my produce.

5. Do you have an inventory of what’s stored in your buildings?

___ Yes, that inventory list is stored in the barn.

___ Yes, that inventory list is stored somewhere else.

___ No, I don’t have an inventory list – add to your “to do” list.

6. Does your insurance cover “fire” and “acts of God”?

___ Yes, I’ve reviewed my policy with my agent and understand what’s

covered.

___ Yes, I think so.

___ No, it’s too expensive.

7. Do you have sufficient liability insurance to cover your exposure risk?

___ Yes, I’ve consulted with a knowledgeable agent.

___ Yes, but I’ve not reviewed it recently.

___ No, I don’t know my exposure.

Market Analysis and Outlook

8. Do you have a marketing plan?

___ Yes, in my head.

___ Yes, it’s written down on paper; we review it every year.

___ Yes, it’s written down on paper; but I haven’t seen it for years.

___ No, we talked about doing that once.

9. How do you decide to make changes to your marketing plan?

___ We keep good records of what sells and what doesn’t and adjust

accordingly.

___ We have good financial records so we know what to charge.

___ We talk to our customers about things they’d like to see in our farm

market.

___ We read trade publications dealing with on-farm marketing.

___ We try everything once.

___ We carry whatever the salesman who comes to our door says will sell

well.

10. Within your market (wholesale, retail, etc.) do you move more product each year?

___ I don’t know.

___ Yes, I keep detailed records of what sells when & where.

___ Yes, I went through more marketing containers.

___ No, I’m looking to retire.

___ No, we have removed items that were no longer profitable.

11. Where does your “excess” produce go?

___ I have an outlet for surplus product I grow.

___ I trade with a neighbor

___ I wholesale it.

___ I compost it.

___ To keep profitable prices, we discard excess produce.

___ I donate it to the local food pantry.

12. Do you know why your customers buy your product?

___ Yes, my customers are price-driven.

___ Yes, my customers are quality-driven.

___ Yes, my customers are experience-driven.

___ No, I don’t care as long as they spend money.

Contract Production, Branded or Certified Marketing, Value-Added Enterprises

13. How do you “differentiate” your produce from others?

___ I market my produce as “Local”.

___ I market my produce as “Organic”.

___ I market my produce as “Reduced-Pesticide”.

___ I market my produce as a “Good Value”.

___ I don’t market my produce, I market the experience.

14. What “value” do you add to your produce?

___ My produce is sorted by size and grade.

___ My produce is in retail containers.

___ My produce is washed and pleasingly displayed.

___ I sell product directly as it comes from the field.

___ My produce is packaged or processed to add value.

15. Do you get paid for that added “value”?

___ Yes, I charge a premium.

___ No, it’s standard business.

___ I don’t add value.

16. Does your operation have an identifiable brand?  (logo, slogan, etc.)

___ Yes, and we use it on all of our promotional materials.

___ Yes, we have a sign out front.

___ Yes, it’s on our letterhead.

___ No, we just sell produce.

Financial Records, Analysis, and Bench-Marking

17. Do you know your cost of production?

___ Yes, I keep good production and financial records and review them

 annually.

___ Yes, I think I know what my cost of production is.

___ No, if there is money in the checkbook at the end of the year I’m okay.

18. Where and by whom are your financial records kept?

___ I keep them on a computer.

___ I keep receipts and check stubs in a pocket calendar.

___ I have retained the services of an accountant.

19. Do you determine profitability by crop/block?

___ Yes, we look at that each year and make planting or culling decisions

accordingly.

___ Yes, we look at that in five-year increments.

___ No, we look at overall enterprise profit.

___ No, we don’t figure profit by individual crop/block.

20. Do you keep track of retail sales by item?

___ Yes, we track inventory movement by item.

___ Yes, we track sales by category.

___ No, the farm market is a profit center on its own.

21. Can you compare income/expenses from year to year?

___ Yes, my accountant keeps track of that for me.

___ Yes, we do that analysis for each fiscal year.

___ Yes, we compare payments and income from receipts.

___ No.

22. Do you have sales/profit goals?

___ Yes, we plan goals for each year and check them quarterly.

___ Yes, we plan a goal and check at the end of the year.

___ Yes, our goal is to make more than last year.

___ No, we hope the income exceeds costs.

Capital and Financial Assets

23. Do you have a depreciation schedule for your capital assets?

___ Yes, and we set aside funds to replace our capital assets.

___ Yes, we take it off our taxes each year.

___ No.

24. Do you compare the capital investment versus lease payments when acquiring capital assets (i.e. farm equipment, buildings, produce handling equipment)?

___ Yes, we look at all options.

___ No, we buy or do without.

Credit

25. Have you reviewed your credit report in the last year?     ____Yes     ____No

26. Do you know your credit score?       ____Yes       ____No

Succession, Estate Planning, Health & Well-Being

27. Which of the following statements best describes your own plans for the future?

___ I expect that I will never retire from farm work

___ I expect to become semi-retired at some stage

___ I expect that I will retire from farm work at some stage

28. Do you have a plan for passing your business onto the next generation?

___ Yes, we have legal documents drawn up to transfer on the business.

___ Yes, we have discussed what we want to do.

___ Yes, I know how I want to do it.

___ No, we haven’t thought about it.

29. Have you discussed retirement plans with any of the following (mark all that apply)

           z family                   z lawyer                    

            zbanker                   z farm consultant

            z accountant            z____ another advisor  

            z other (please specify) _______

            z have not discussed with anyone

30. What percent of your income do you expect to receive from the following sources once you have retired/semi-retired?

Sale of land, livestock or other farm assets                      ___________%

Sale of other property                                                    ___________%

Income from this farm                                                   ___________%

Income from social security                                           ___________%

Income from pension from off-farm job                          ___________%

Income from private retirement plan                               ___________%

Income from other investments                                      ___________%

Other sources (please specify) __________________ ___________%

                                                TOTAL                             100%

31. Have you identified a potential successor who will eventually take over the management of your farm?

                       ____Yes                      ____No

            If Yes, what relation is that person to you?

                        z son                                       z daughter                  

                        z son-in-law                             z daughter-in-law

                        z other (please specify)________________

32. In addition to Social Security do you contribute to any other pension plans?

                        ____Yes                      ____No

33. If you would become ill or die, what plan do you have in place for your business to continue?

___ We are covered by health and life insurance.

___ Details are outlined in my will in the event of my death, but no plans

have been made for disability.

___ No, we’d have to sell the business.

34. With the plan you have in place, would your surviving family’s needs be met?

___ Yes, I have sufficient life insurance to support my dependents in case of

my untimely death.

___ Yes, I have investments sufficient to support my dependents.

___ Yes, the business has sufficient equity to support my dependents.

___ No, I don’t have this in place.

35. Answer Yes/No to the following:

Are manufacturer’s safety guards in place on all equipment? _____

Do you use the personal protective equipment as specified on the product label for all pesticide applications? _____

Do you use sunblock and protective clothing from the sun? _____

Do you use ear protection against loud noise? _____

Do you have rollover protection devices on all tractors? _____

Do you have strict rules relative to children and equipment use? _____

Do you wear a seat belt when traveling in a car/truck? _____

Do you have regular checkups with a physician? _____

Legal Liability

36. How is your business structured?

___ Sole Proprietorship

___ Partnership

___ Limited Liability Corporation

___ Regular Corporation

37. Do you understand the benefits/liabilities of your organization choice?

___ Yes, I’ve reviewed it recently with legal counsel.

___ Yes, I reviewed it in depth when I set it up.

___ No, I haven’t thought about it.

38. Are you aware of your legal liability requirements?

___ Yes, I follow all labor, pesticide, safety, water and other applicable

regulations.

___ I learned about them when I was cited.

___ No, I don’t think the laws are appropriate.

Employee Recruitment, Management & Retention

39. Do your seasonal employees return each year?  If so, why or why not.

___ Yes, I treat my employees well and they feel valued.

___ Yes, I pay them well.

___ No, I rehire and retrain every year.

40. Do you provide benefits for full-time employees?

___ Yes, with limitations based on length of employment.

___ Yes, with employee contributions.

___ No, we offer intangible benefits.

41. Do you have an employee handbook with job descriptions and training requirements?

___ All employees receive a written handbook and systematic training.

___ All employees receive verbal job descriptions and on-the-job training.

___ Employee responsibilities change; training provided as needed.

42. Do you maintain employee records as required by law?

___ Yes, complete records are maintained for 3 years after an

employee has left.

___ Yes, I hire migrant labor and meet all documentation and facility

requirements.

___  We pay our employees cash.

Use this self assessment as a tool to identify and address the risks in your operation.  If you would like assistance in getting more information concerning your personal risk exposure, contact Anna Maenner of the Wisconsin Risk Management Project at (800) 722-3120 or email her at office@waga.org.

  Funding for this project was provided by the North Central Risk Management Education Center