Recently, I heard about a couple of banks who were anxious to start lending to dairy operations again. This seems odd, yet fitting, since they both could be described as “Fair Weather Lenders,” who give you an umbrella when the sun is shining and take it away as soon as it starts raining. Read on if you want to know what to do next…
Many of us understand the benefit of establishing a solid set of Goals. These can be for your business, your personal life or any number of other items. I believe they represent one of the most important tasks that you can undertake. Yet, many people set goals every year, but then fail to accomplish them. New Year’s resolutions are an excellent example of this. Why is it that these so often fail to come to fruition?
We are in a constantly changing industry environment where decisions we made five years ago are not necessarily as effective as they previously were. It is time for each of us to take back the reins of the decision making process and adopt a more proactive approach moving forward. Management consultant Peter Drucker stated that, “The best way to predict your future is to create it.”
I attended a Leadership Conference at Duke University and was fortunate to hear a keynote address delivered by Duke’s Head Basketball Coach Mike Krzyzewski entitled “Building a World Class Team.” His message centered around his experiences developing the USA Basketball Team that competed in the 2008 Summer Olympics in Beijing, China. He outlined what he felt are the primary Keys to Positive Leadership and Sound Teamwork.
Do you ever find yourself having difficulty being optimistic? I think we all do at times. Of course, not when we are getting in excess of $20 per cwt for our milk, but how about when milk prices are far less positive, as they were from 2009-2012? You might want to save this article for those times…
No one ever said that planning was easy, but it is rewarding. Work hard to stay on course with your plan and always know where you are with respect to that plan. There is no alternative, other than to be like the warehouse worker, who, when asked how long he had worked at his current job, replied, “Ever since they threatened to fire me…” Staying on course with your plan will lend itself to far superior results.
In their book Why Not? How to Use Everyday Ingenuity to Solve Problems Big and Small, authors Barry Nalebuff and Ian Ayres tell the story of Croesus and his ability to successfully overcome any problem. However, they go one step further by answering the question about what you can do to solve challenges when you do not have unlimited funds, like most of us.
My intent was not to draw that fabulous 0.01% interest we currently receive on any savings, but rather it was designed to segregate these funds from his checking account, with the sole intent of protecting the money from being spent. I call it AGS – Acute Goal Savings.
I realize that, given the solid margins of 2014, it is easy to forget about how difficult the prior eight years had been in the dairy industry. Recall the challenges of high feed costs for most of 2008 to 2013 and the calamity of $10 milk prices in 2006 and 2009? These years represented the trial of the century!
Why does this matter? Simply stated, if you want banks to loan you money in the future for operating needs or expansion, you will definitely need to illustrate that you have your costs under control. Would you loan money to someone who had no idea what his future cash flows and profitability will be?
