A Unique Approach to Boost Your Interest Earnings

Ever wonder how to boost your interest earnings, especially with rates that banks pay you being so low? Granted, you may earn about 0.10% on any balances left in your account. Why not earn it another way by saving some money on interest expenses? There is still a way to do this. 

 When your milk check comes twice per month, why not pay down your revolving lines of credit for a couple days, while you are deciding specifically what invoices you will be paying? While these earnings are not huge, they are far greater than anyone can earn on any funds sitting in a checking or savings account today. If your lines are at a rate of 4.25%, you can save over 40 times what the bank will pay you on any unused balances. Sounds like a good trade to me…

 When your milk check arrives, assuming you have a revolving line of credit, you simply pay down the line, especially if it comes on a Friday or before a three day weekend, and then save the loan interest until you send out checks to your vendors. Just be certain that you have the funds back in your checking account before your checks written start to clear the bank. Otherwise, the overdraft fees will wipe out any savings you have had on your line interest.

 You may also want to check with your bank to see if they have an automatic “Sweep Account.” A sweep account will do the same thing for you every banking day, ensuring that you minimize your interest expenses, while ensuring that your checks are always covered. This sweep process is done completely via a computer program, designed to save you money, just like the manual process I described above. 

That, my friends, is good for your bottom line. It is a great example of Next Level Thinking!

Getting Yourself on the Right Team!

“I don’t ask the players if they want to win. I ask them if they can live with losing, because if they can, that is exactly what they’ll get since it’s so much easier to have.”

I love this quote from former Notre Dame head football coach Lou Holtz because it succinctly says so very much. Which team do you want to be on with your dairy operation?

Here is an excerpt from an article I recently wrote for the October 2013 issue of the Western Dairy Business:

Please allow me provide you with some points of comparison for two teams, because there are consequences involved with both:

1.)   ” The managers on the A Team have a definite plan that they follow very closely. Of course, they adjust their path occasionally, but for the most part they stick to their plan. Why? They do so simply because they spent a lot of valuable time with their key advisers developing this plan that will take them closer to their desired objectives. Does the B Team have a plan? Certainly. They have even considered getting it out of the file drawer to review it once in a while. They just haven’t found the time to check it again, so sometimes they get off course…

2.)    The A Team knows precisely where they are on a day to day basis in terms of herd health, milk production and reproduction. The B Team has considered collecting this information and maybe even putting together a daily summary report for their entire team, but they barely have enough time to keep the bills paid and meet with their banker regularly. One Nutritionist had suggested this, but they decided he just represented another cost that they could not afford…

3.)    Members of the A Team seem to have a solid handle on their costs. They get surprised sometimes, but it’s not because they are asleep at the wheel. They adjust course and may substitute one product for another. However, this is never done blindly. They simply discuss it with the appropriate advisers. The B Team, on the other hand, keeps a close watch on their more successful neighbors. If they are trying something, it might be worthy of consideration, no?

4.)    The A Team makes a lot of money farming, especially with the high feed costs we have seen the past several years. They invest farming funds carefully, and, as a result, achieve solid yields, which leads to stronger profitability. The B Team? Well, it’s not really their fault, and they would have hit better yields, but they couldn’t get their Crop Adviser or the fertilizer company to come out because their account balance was large and past due 120 days. However, as I mentioned earlier, they don’t feel it is their fault…

5.)    Finally, members of the A Team are very teachable. They have been in business for a number of years, but they realize that the industry has changed. They realize that they must change, too. The B Team? Their leader exclaimed to one young adviser that, “If he followed every recommendation he had received over the prior 20 years and they had all worked as planned, his cows would be producing 120 pounds day.” Sounds like it may have been worthy of consideration, in comparison to the 62 pounds per cow per day he was currently hitting…

What’s the message for us as managers? First, we need a solid plan. Second, we need to follow it and adjust course as needed, because none of us has a crystal ball into the future. We also need to realize that all of our decisions (or lack of them) have consequences. They can also impact our credibility with vendors, bankers, our business partners, and other key players, all of which will have consequences.

Which Team do you want your operation to represent?” I’m going with the A Team! To learn more about the points mentioned above, get a copy of my latest book, The Five Factors Guaranteed to Impact Your Future, at: https://www.createspace.com/4336264

Who Has Time to Develop a Plan?

We live in such a busy world, don’t we? While we are all trying to be more successful, every one of us still needs to take some time to “plan our work, before we work our plan.” 

I recently had a Client who said, “Are you kidding me? I barely have time to get everything done as it is. Now you think I should allocate some time to planning?” As soon as he completed his statement, I think it actually occurred to him what he had just said. He had realized that he needed a better plan to get things completed correctly and on time. I know you have heard the old adage: If you don’t have time to do it right, where will you find the time to do it over?

Doesn’t that same rule apply here? I am sometimes guilty of the same thing, that is, not planning the detailed steps of my work and then being disappointed when everything does not turn out quite like I had hoped. What can we do? I am glad you asked. 

There is never a bad time to plan tasks we wish to accomplish, but this is particularly true as we approach a new year. It has been said that the best time to plant an Oak tree is 20 years ago. However, the second best time is today! As you approach the end of this year and start planning for the upcoming one: 

–         Set some positive Goals for you and your Team.

–         Decide what Achievements you really want to accomplish.

–         Lay out the Steps necessary to reach these.

–         Determine what your intended Time Table will be for each step.

–         Decide Who will be involved. Do you need additional people or is it something you can hire an outside contractor for?

–         Establish some solid Measurements to track your level of progress.

–         Outline what Specific Activities you will use to monitor this progress and review them with your Team.

–         Finally, Celebrate Your Success and share the achievements with the rest of your Team!

Follow these eight steps, and I believe you will be well on your way to achieving higher levels of success!