3 Research Methodology
One of the main objectives of this research is to give new
decision tools for farmers' consultants to evaluate the expected profitability
of their customers' projects or farms. In this section, the preparation of this
research will be presented.
3.1 Survey Construction
A small survey designed to collect different perspectives from
accounting and consulting companies, mainly from the network CEFRANCE:
- First, the network of the CERFRANCE represents more than 50%
of the market of farming consulting. The remaining market shares are shared by
many different organizations with no comparable size to the leader.
- Then, the methodologies used in the different CERFRANCE are
based on the same recommendations from the head of the network (the CNCER).
Therefore, we can obtain a clear view of the methodologies used by consultants
without a large survey.
3.1.1 Questionnaire
The purpose of this questionnaire is twofold:
- Confirm of reject my initial observation which stands
that farm consultants use discount rates based on loan rates plus a risk
premium around 2%.
- Test the willingness of farm consultants to use the
WACC to approximate the cost of capital of their customers in their
region.
To test these hypotheses, an internet-based survey of 9
questions was sent to 25 consultants in France. In order to improve the answer
rate, the questionnaire was sent only to farm consultants who were linked to me
in a professional social network (Viadéo® or Linked
In®). As these consultants are all French, it has been written
in French (see Appendix 3).
This choice of consultants introduces a first bias: mostly
young professionals use professional social networks. However, as young
consultants are less experimented, it is common sense to believe that they are
taught with the last methods developed or chosen by their consulting companies.
Therefore, this choice of population was motivated by its efficiency to collect
up to date information at the minimal cost.
3.1.2 Results Analysis
As the number of participants was reduced, analysis of the
results was only descriptive (percentages, average and medians) and no
statistical tests were performed. However, these results were sufficient to be
conclusive.
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