I’m Larry, and I’m in the Holistic Management course as part of the Carbon Farming course because my wife (an artist) and I (a former electrical engineer) moved to a pecan farm in rural Georgia a couple of weeks ago from a village in upstate New York and I’m hoping to get a broad education in sustainable farming techniques with a relatively short investment in time. We need the help of animals to help maintain the land (the Holistic Management module), and will need to make use of innovative water management techniques (the Keyline design module), collect and distribute greywater harvested rainwater and build a forest garden (Regenerative Earthworks and Forest Gardens module) and build the soil and for inspiration meet Joel Salatin, several of whose books we have read.(Soil Food Web and Pathways to Relocalization module).
Day 04 – Holistic Mangement, Financial Planning
Holistic Management Financial Planning acknowledges that most of us in the US are inculcated with consumerist values and that these carry over into our own financial management. Many of us spend up to our potential, and as our means increase our spending increases proportionately. Unless savings are planned, they are often forgotten. Translated into business management these characteristics or behaviors lead to targeting for breakeven operation rather than profitability. Holistic Management Financial Planning takes these cultural traits into account by targeting for profitability by SLASHING projected revenue and at the same time budgeting for overhead and expenses at a level well below that for the adjusted revenues.
Expenses are categorized into 4 buckets:
- Expenses that generate new wealth,
- Inescapable expenses,
- Maintenance expenses, and
- “wrong’ expenses.
Expenses are budgeted in this priority.
Opportunities for action are addressed using the Holistic Management decision criteria,
- Cause and effect – are we addressing a symptom or a cause?
- Weak Link – are we addressing:
– something holding up progress
– the weakest part of a lifecycle issue in a biological process?
– the weakest link in a chain for solar energy to money (conversion, production, marketing)?
- Marginal reaction – which of the possible actions provides greatest return per unit investment?
- Energy/money uses and sources: internally or externally-sourced money and energy? Is pattern cyclical, consumptive, building capital, etc?
- Gross Margin analysis: what does each potential oppurtunity contribute to covering of overheads?
- Society and Culture: Does this align with our values?
- Justification: Did we rationalize in order to make our pet idea look good?
Day 04 – Financial Planning Exercise
The afternoon session was spent with a complex case study exercise making use of data which would do a business school proud. We had to wade through a lot of information, critiquing the presented spreadsheet analyses for potential opportunities, while at the same time doing a snapshot of their projected profitability based on a set of budgets and projected expenses. What could we suggest as groups to make the business (a ranch) more profitable, consistent with the owner family values and their vision for what they wanted the property to become.
The case study groups then presented their results, a taste of one of which is shown in the video below:
Stay tuned for more Holistic Management and Carbon Farming!
Carbon Farming 