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A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE

“The Dollars and Sense of Financing a Small Farm” Southeastern Massachusetts Agricultural Partnership (SEMAP) So You Want to be a Farmer 4/4/2012. Presented by Roy Henshaw, CPA Partner: Rucci, Bardaro & Barrett, PC. A MEMBER OF RUSSELL BEDFORD INTERNATIONAL

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A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE

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  1. “The Dollars and Sense of Financing a Small Farm” Southeastern Massachusetts Agricultural Partnership (SEMAP) So You Want to be a Farmer 4/4/2012 • Presented byRoy Henshaw, CPAPartner: Rucci, Bardaro & Barrett, PC A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  2. I. Decide what kind of farming you want to do • Animals • Land Crops • Orchards • Aquaculture • Timber II. For Profit Farming – Making Money III. Hobby Farming – Personal Enjoyment IV. Not for Profit Farming Activities Wednesday April 4, 2012 2 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  3. V. Setting your goals: Starting a Farm Business • Determine if you can afford to go into farming • Establish a Financial Plan for your Farm Activity • Make sure all permits and licenses are in the farm name and you’re compliant with town ordinances 33 Wednesday, April 4, 2012 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  4. VI. Establishing a System of Recording Information • Obtain a Federal Identification Number (Federal form SS-4) • Open a Business Checking Account • Record all income and expenses for the farm • Cash receipts journal • Cash disbursements journal • Keeping track of Barter income and expenses • Recording out of pocket costs • Recording and using credit cards for farm expenses • Recording loans made by the owner Wednesday April 4, 2012 4 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  5. VII. Prepare Financial reports • Income Statement • Sales • Expenses • Profit / Loss • Balance Sheet • Assets • Liabilities • Owners Capital Wednesday April 4, 2012 5 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  6. Manual System of Accounting • Safe Guard System • Monthly Bound Accounting Ledgers • Computer Accounting Systems • Quickbooks • Peachtree • First Pioneer Farm Credit System of Accounting Wednesday, April 4, 2012 6 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  7. VIII. Filings for a Farming Activity • Prepare an accurate income tax return annually • Prepare a Schedule F (income and expense from a farming business) • Income from farming activities • Expenses incurred to run the farm • Office in home schedule • Farm use of personal assets Wednesday April 4, 2012 7 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  8. IX. Operate your farm inside an entity Wednesday April 4, 2012 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  9. X. Financing a farm • Basics for borrowing money • Borrow only 50% of Value • Use your cash for the rest • Borrow money inside of a farming entity • Minimize personal guarantees • Negotiate a loan before you need it • Collateral farming assets only Wednesday, April 4, 2012 9 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  10. Types of Financing • Mortgage Loans • Line of credit • Operating loans • Equity line of credit • Installment debt • Leasing Arrangements • Equipment Financing 10 Wednesday, April 4, 2012 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  11. Sources of Financing • Grants from MDAR (Mass Department Agriculture Resources) • Farm Banks • First Pioneer Farm Credit • Conventional Banks • Equipment Companies • Family Members • Outside Investors Wednesday, April 4, 2012 11 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

  12. XII Work as a Team • Communicate with owners • Keep Track of Agricultural Production Annually • Degree days and production per acres • Encourage your help to assist customers • Outside team members • Lawyer • Insurance professional • Accountant • Financial Advisor Wednesday, April 4, 2012 12 A MEMBER OF RUSSELL BEDFORD INTERNATIONAL WITH AFFILIATED OFFICES WORLDWIDE THE RIGHT SIZE ACCOUNTING FIRM

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