Is It Time to Reset?

I recently finished reading a new book by Dan Heath entitled Reset.  It is an excellent book, and I would highly recommend it. The book contains a tremendous amount of change management and outlines methods we can use to make huge improvements in our processes.

One area where I hear the most complaints from Clients is “Labor Challenges.” Heath points out that “there is no emergency, only choices.” The key to making improvements on labor or any other issue, he suggests, is to identify “Leverage Points & Restack Resources.”

In one business, for example, the management team was having difficulty with employee motivation. As a result, they shared a questionnaire with employees that asked four questions that they could answer anonymously:

·       What makes a good workday for you?

·       What makes you proud to work here?

·       When we are at our best, what does that look like?

·       What are any impediments to your performance?

Then, in response, the same management team addressed these issues quickly, especially the small ones. For example, the coffee machine did not always work properly. It was relatively low cost and got replaced right away. They leveraged this item (at a reasonably low cost, too).

Additionally, they put three clear, plastic boxes at the place where their employees exited at the end of their workday. One box had orange ping pong balls, one had white ping pong balls, and the third one was empty. As they left work, the employees were asked to put orange ping pong balls into the empty box if they had experienced a difficult or unreasonably challenging day with conditions that needed to improve. If their day was solid, they were requested to place a white ping pong ball into the empty box, likewise giving management some immediate feedback on the day.

If you think about it, this process was very practical and provides a good example of participative management by asking the employees: “What matters to you?” It identified leverage points that were important to the crew and allowed management to “restack resources,” often at very low cost, to create a better outcome.

Give this some consideration in your operation, and if I can assist you with this, please let me know.

“People often say that motivation doesn’t last. Well, neither does bathing – that’s why we recommend it daily.”

Zig Ziglar

Let’s take your business to the Next Level!

Where Have All the Lenders Gone?

We have been facing a tough business environment these past four years. We have seen ridiculous inflation as a direct result of the enormous “spending packages” during the post Covid period. This inflation, in turn, led the Federal Reserve Board to increase interest rates by 5% over a two-year period.

This was the foundation of their efforts to rein in inflation, but, as usual, “they were late to the game” and now appear to have over-corrected in their actions. They have suggested that we are “almost there” on controlling inflation, but the pain seems to be spreading throughout the entire economy.

I’m not seeing prices of most inputs drop, even though they may be rising at a slightly slower pace. In this scenario, I have noticed that the process of acquiring new financing or even completing annual renewals for Clients has taken extremely long, in comparison to the past. I wonder why…

We have more information available to us on all businesses than we have ever had. There is nothing hidden, especially with the power of the internet and more recently the advent of Ai and all its opportunities.

With all the information we have at our disposal, what could be the hold-up on loans? Is it information overload on the part of Loan Officers? Is it extreme top-down management at banks, where no one has any authority to approve loans. Anytime there is a committee involved, it seems like the approval process grows exponentially. Could it be the “fear of making a mistake?” Consider the following:

“Let our advance worrying become advance thinking and planning.”
Winston Churchill

I recently had a Client for whom I was seeking refinancing. Their approval took over a year. They have excellent equities, solid inventories, have been profitable in three of the last 4 years but were caught in the tumult of a bank buyout where their lender got absorbed by another lender. It was challenging, and, at times, I felt like I was leading the new loan officer through a finance course. I can assure you that it was taxing.

To avoid this, I suggest you always have the following information available, and this is something I helped this Client to develop:

  • CPA Prepared Financial Statements
  • Inventory Reports
  • An updated Cash Flow Budget
  • Responses to FAQs of bankers, regarding management decisions & plans.

What is the Next Step for you? Is it time to “Reset?” In my next blog, I will address that process.

Let’s take your business to the Next Level!

Do You Have the Advantage?

As you begin a new year with your dairy operation, this is a new game where the score is 0-0. You haven’t won yet, but I’d like to remind you – you haven’t lost either. However, consider the following. Many people are busy doing very proactive tasks on their dairy, but do they really know if these steps are working?

To know this, you need a scoreboard. That scoreboard is a Financial Statement. Your CPA can produce a masterpiece Financial Statement once, twice or even four times per year, but a lot can happen between those periods. That is why you need to track your results every month. Allow me to introduce the Success Strategies Advantage™ software.

  • Do you know how you did financially last year? This program can tell you.
  • How did your results compare with others in your region? It will compare your results with your region’s averages.
  • Have you developed a Budget for this year yet? The program can assist you with this process, too.
  • Do you know your Break-Even levels for Milk Price, Production/Cow/Day & Feed Costs?

If not, it is time to get the advantage, more specifically, the Success Strategies Advantage™! Regardless of where you are located in the U.S., the system will create a budget for you, and after you type in about 20 Revenue & Cost numbers, it will give a Financial Comparison and point out where you may need to make some adjustments in your business.

It will also, as I said above, generate your Break-Even levels to guide you in making changes that result in better profits. One other benefit of this program lies with its ability to run “What If” scenarios. For example, if you want to automate some tasks on your dairy, you need to know if it will pay off. To learn this, you would simply add the monthly payment for that new equipment into the program and then change other expenses, such as labor savings, that you would expect to achieve with this new automation. This will then give you a good idea of whether the investment will pay off for you and avoid the process of buying equipment and then being disappointed on its payback…

What is the Next Step for you? I would suggest you check it out at www.success-strategies.com and look for the Milk Cans & the video right below them. You can even get a free 30-day trial. Consider the following advice:

“Change can be tough. But the only alternative is eventual obsolescence.”

Michael Hyatt

Let’s take your business to the Next Level!

Is It Time to Go?

I recently had a conversation with a good friend of mine about having him start a new business. Of course, he was concerned about numerous items – recent events with Ai, continued concerns about inflation and high interest rates.

I suggested that he focus on what he wanted to achieve with his customers and, as the saying goes, not “let the smoke get in your eyes.” While the recent concerns about Ai are relevant, I cannot let that stop me from moving forward with my life and neither can you. In fact, the advent of Ai will likely assist many businesses to streamline their operations and become more efficient. Recent Ai events were probably a “wake up call” for the U.S. tech industry…

Now, regarding inflation and its effect on the Federal Reserve Board raising interest rates to slow down our economy, we have had inflation for a long time. Why do you think the “purchasing power” of the U.S. dollar has decreased so much over the last 50 years?

Instead of worrying about the impact of these forces, I suggested that he spend more time focusing on what he wanted to do for customers. Additionally, consider what he needed to get started. Let’s consider these outside forces and then focus on the positives of what he could offer.

In the book “Start Up Nation” authors Dan Senor and Saul Singer state that “Without start-ups, the average annual net employment growth rate (1980-2005) would actually have been negative. Economist Carl Schramm, president of the Kauffman Foundation, which analyzes entrepreneurial economics, told us that ‘for the United States to survive and continue its economic leadership in the world, we must see entrepreneurship as our central comparative advantage. Nothing else can give us the necessary leverage.’”

So, after shifting my friend’s focus, I suggested he consider the following. If he knew that he could not fail, what would he do? Once identified, that is where he is most likely to succeed.

What is the Next Step for you? Please let me know if I can help you. You can reach me at john@success-strategies.com, and consider the following advice:

“The two most important days in your life are the day you were born and the day you find out why.”

Anonymous

Let’s take your business to the Next Level!

What is Your Mission This Year?

As we begin a new year, I believe it is crucial that we identify what our primary objectives are for the coming 12 months. I understand that the challenges of inflation, higher interest rates and general over-regulation of most industries today have helped to create a sense of malaise.

However, in the words of Greco-Roman Philosopher Epictetus:

“The more we value things outside our control, the less control we have.”

In other words, focusing on these items can create a sense of helplessness. This is a myth. You have more control over your outcomes than you give yourself credit for. While all of these variables can impact your results to some extent, you have the ability to boost your outcome.

You can control your results, and it helps to have a plan. Can you control every step? Of course not, but once you have set your objective, decide what your first step will be.

And isn’t this a great time of year to start outlining your objectives for the year?

Along with your first step, identify the potential challenges you will face and what your response will be to each one. Be sure to get your Team involved as you lay out the plan. Their support will be instrumental to your success.

Then, as you move forward, start to identify each of your next steps and refine your plan accordingly. Ultimately, the combination of your belief and a sound planning process will assist you to “Make It Happen!”

What is the Next Step for you? Please let me know if I can assist you. You can reach me at john@success-strategies.com, and consider the following advice:

“A good plan is like a roadmap: it shows the final destination and usually marks the best way to get there…”

H. Stanley Judd

Let’s take your business to the Next Level!

Are You a Visionary Entrepreneur?

What are the qualities of a Visionary Entrepreneur? This was the leading question asked at my most recent Strategic Coach workshop. It is actually an interesting and thought-provoking question.

Some of the answers that participants offered were “the ability to see future opportunities, an ability to plan the future, and using your imagination to think about the future.” These are all great answers. The Oxford Dictionaries describes visionary as “the ability to think or plan the future with imagination or wisdom.”

As we start a new year, what ideas do you have in mind to dramatically improve your current operation? Are there areas in your current operation that should be boosted? If so, what will be required to achieve this level of improvement? Does it require an investment in people, equipment or other items? Start by listing these necessities and then consider their level of payback. Does the required investment make sense for you?

On the other hand, would you be better off designing a completely new vision for the future? In either case, you need to see it, build it and articulate it to your Team and your Lender. Their feedback and support will prove invaluable to you.

As I have stated many times before, being visionary will require you to:

  • Identify what, specifically, you want to achieve.
  • Develop an outline of how you can best accomplish the desired result.
  • Recognize the potential challenges you will face, and yes, there will be some.
  • Formulate your strategy to overcome these challenges.
  • Move forward with the first step and develop a system to track your progress.
  • Adjust your course, as needed.

All of us are visionary, to some extent. The key to your success is developing your ideas, maintaining a system to measure your results and then adjusting your course as new challenges arise.

What is the Next Step for you? Please let me know if I can help you. You can reach me at john@success-strategies.com, and consider the following advice:

“The only limit to our realization of tomorrow will be our doubts of today.”

Franklin D. Roosevelt

Let’s take your business to the Next Level!

What Does Your Future Hold?

Whenever you stay in business for a long time, the day will arrive when you must consider, for many potentially different reasons, whether you wish to stay in the business or leave.

Many agricultural producers are in this situation today. It could be due to their advancing age, a recent lack of profitability, health concerns, high interest rates or a combination of these variables. The lack of available credit from banks is also putting pressure on producers, as most lenders continue to seek the perfect business to lend money to.

If you are faced with this situation, here is what you should do. Literally, get away and THINK. Your next step is a big decision, so you want to make sure you make a wise, well-informed choice. Despite what your first boss told you when you were 15 years old, it really is not a crime to get away and think…

Consider what you would do: 1.) If money was not a limiting factor. 2.) If you could operate your “dream business.” 3.) If you had all the financing and Family support you desired. Then consider if you possess the health, stamina and desire to move forward with your plan. Saying “Yes” or saying “No” are both acceptable answers. Just be certain that saying “No” isn’t just because you were scared to do so.

In the movie “The Art of Racing in the Rain,” the main character was hesitant to enter a car race, and his driving coach stated: “There is no shame in competing and then losing the race. There is only shame in not entering the race because you were afraid you might lose.” That is excellent advice for all of us.

One final point in considering whether you should stay in your current operation is to look at the tax implications with your Accountant or Tax Adviser. Please do not execute your plan without considering the tax implications, especially if you decide to completely exit your industry. Is it better to go now or after December 31st?

Once you know these implications, you can refine your plan for success. Additionally, if you continue your business, consider this thought. If you knew you could not fail, what is the next action you would take? Recognize that there will be obstacles. That’s why so few people run their own businesses. Overcoming hurdles is not something they want to deal with.

Be sure to set some deadlines for action and move forward. Today is an excellent time to establish your plan for the new year!

What is the Next Step for you? Please let me know if I can help you. You can reach me at john@success-strategies.com, and consider the following advice:

“Let our advance worrying become advance thinking and planning.”

Winston Churchill

Let’s take your business to the Next Level!

What is the Secret to More Positive Cash Flow?

After eight years in the banking industry and 26 years of consulting on finance & strategy with Success Strategies, Inc., I have concluded that achieving positive cash flows in your business revolves around several key items.

First, I absolutely believe that if you measure it, you will understand your cash flow far better. If you understand it, you can manage to get better control over it. Undoubtedly, if you gain better control over it, you will be positioned to improve it. While this set of principles may sound simple, it can be rather evasive at times. Additionally, you are constantly being faced with changing variables or factors that, sometimes, you were not expecting.

Regardless, all success in this arena begins with measuring your cash flow. We have a software tool for the dairy industry called the Success Strategies Advantage™. It will measure your financial results and provide you with a budget that is based upon your region of the country, i.e., the “Averages” of various Revenue sources & Costs per 100 pounds of milk. In a moment, I will explain what other tasks it can fulfill for you.

Second, you must know your Break-Even levels. In other words, what could you change on your multiple Revenues or Costs, while all other variables remain the same, and still not lose money. This is extremely valuable information to have at your fingertips. Why?

Well, if you are losing money, your Break-Even numbers will tell you what you need to change in order to stop losing money. Another approach would be to ask yourself, “What are potential items I can increase (on the Revenue side) or decrease (on the Expense side) to achieve a Break-Even level and, better yet, start making money!

I have had Client situations where we have literally boosted revenue and/or cut their costs $1.00-2.00/cwt, and the program clearly showed us where they were spending too much money, in comparison to other producers in their region of the country. Would that help your operation to be more profitable? Absolutely! It would in most businesses.

Using the program, you can also run some “What If” scenarios to measure the potential impact of adding more cows in your dairy herd, boosting their production per cow or adding new equipment or automation tools that can lead to lower costs. This knowledge can assist you to make better decisions. If you have a more solid grasp of what you are investing in and the potential impact of that item or variable, you can feel more confident about the choices you are making.

Hopefully this overview has been helpful to you. I would urge you to check out the Success Strategies Advantage™ software at www.success-strategies.com and start a free trial. It’s on our Home Page – just look for the Milk Cans.

What is the Next Step for you? Please let me know if I can help you. You can reach me at john@success-strategies.com, and consider the following advice:

“Success… seems to be connected with action. Successful men keep moving. They make mistakes, but they don’t quit.”

Conrad Hilton, Entrepreneur

Let’s take your business to the Next Level!

Are We Getting Too Comfortable?

I recently spoke at the Amelicor Corporation’s Conference in Las Vegas and while I was there, I saw someone win $1,000. I asked him what he would do with his winnings, and he responded that he would probably just gamble it away….

It reminded me of the story about the three lottery winners who were asked what they intended to do with their monetary awards. One said he would buy his parents a new home, because they had been so good to him. The second winner said she would quit working and take a trip around the world. The third one said he would probably just keep farming until he lost it all!

While gambling might be fun for some people, it is no way to run any business. Frankly, you already assume numerous risks every month, including weather risks, health challenges, and rising costs due to inflation. Why be subjected to price risks, too?

If you are running a dairy or other agricultural operation, consider using Put & Call Options to reduce your price risk. As I explained in Las Vegas, the Dairy Revenue Protection program can lower your price risk by putting a “floor” under the prices you receive. If market prices drop, you are covered. If prices stay high, you lose the premium you have paid, but the good news is that you can likely afford it, since your prices were higher.

Sometimes I hear producers complain that they “lost the premiums paid for their price coverage.” However, I remind them it is a form of insurance, price insurance in this case. When their house doesn’t burn down, they certainly don’t call their agent and suggest that “they really didn’t need the fire coverage.”

Of course not. To not be covered would be way too risky. In fact, banks won’t finance a house or business property that is not properly insured. The day may be coming when banks are unwilling to finance your business without sufficient price coverage. The current trends are certainly in that direction.

Please don’t get too comfortable with assuming excessive price risk. Think about it.

What is the Next Step for you? Please let me know if I can help you. You can reach me at john@success-strategies.com, and consider the following advice:

“Successful people don’t control events; they control their response to events.”

Dan Sullivan, Co-Founder of The Strategic Coach

Let’s take your business to the Next Level!

Why Aren’t You Dancing in the Rain?

I recently listened to an excellent, brief video completed by Matthew McConaughey entitled “Motivation.” I found it very uplifting and wanted to share its message with you today.

In his video, he shared six truths that you may find helpful:

  • “Life is 100% better when people know less about you.” At first, I thought he may have shared this, following the intrusions of the public life that he has led. However, the more I thought about it, the more I felt this may be true for all of us in business. When we consider the amount of information demanded of us today, from banks & the government, the reporting can seem overwhelming. Thus, I recommend you give them everything they need but limit it to just that.
  • “Never take advice from those who are not where you want to be in life.” Instead, determine your goals, recognize the hurdles, set your standards, outline your steps, take action and don’t necessarily listen to others who say you cannot do that. Often times, they are mistaken.
  • “Eventually, everyone will show you who they are. Just give them time.” I learned this recently when a bank offered a loan proposal to a Client of mine and then reneged on the offer two weeks later.
  • “Be smart enough to create your own opportunities in life.” Don’t wait for them to come to you. Go out and create them yourself. People value ingenuity, and there are items that only you can provide to the world! Lay out your plan & take positive action.
  • “The secret to happiness is freedom. The secret to freedom is courage.” You must act. Remember, no statue was ever erected to an “observer.” They are only built for people who take decisive action. Recognize your role, build a plan & go forward!
  • “We will always have some conflict in our lives.” Learn to deal with it and adjust your perception. As the Boy Scouts of America advise: “Improvise, adapt & overcome.” As Matthew McConaughey states, “You can either cry in the storm or dance in the rain.”

What is next for you?

Please let me know if I can help you. You can reach me at john@success-strategies.com.

Let’s take your business to the Next Level!