Planning for Success

In my last blog, I discussed how we each need to have a plan for the success of our business. Guess what? Now is the time! It is late in the year, and I personally find that this is the most optimal time of year to complete this process.

There are several reasons for this. First, you have a fairly good feel for what the current year’s results will be. This will provide you with insight into the areas you want to improve. It will also guide you to set new objectives for next year.

Second, it is nearing year end, and your banker will be pleased to know that you are planning for next year. Why not share a copy of your plan with him or her? This is especially important if there may be new financing required…

Finally, any expense involved will be deductible for taxes this year. With that in mind, let me provide you with several ground rules:

1.)    Establish what planning tasks you want to accomplish while you are doing this process. What is most important to you for next year?

2.)    Know “Why” you want to accomplish a certain objective next year. If you know your why, the how will become much more evident!

3.)    Get offsite to do this planning.

4.)    Yes, I did say offsite! This will minimize your distractions and interruptions. Besides, you don’t work for “Corporate America,” so you don’t need permission to do this. In fact, I believe your expenses should be deductible. Ask your Accountant.

5.)    Stay focused (another advantage to being offsite). Stay on task and push yourself to set higher and more challenging goals.

6.)    Plan an agenda before you go, and follow it closely.

7.)    I suggest that any business owner do this at least once per year. Having a mid-year checkup is not a bad idea either.

8.)    Best wishes for a successful planning session.

Follow these steps, and I believe you will be well on your way to achieving higher levels of success, your reward for Next Level Thinking!

What Was He Thinking?

Recently, I was talking to a colleague of mine who does nutrition work for many of my Clients. He pointed out that my Clients were operating at such low levels of debt, it must be easier for them.

After thanking him for his compliment about how I had helped them achieve these lower debt levels (and, believe me, this is not true for all of them), I started to think about some of the objectives we had set and accomplished with these Clients during the past ten years. He was correct in his statement, but I believe that everything we achieved could be done at any dairy or, for that matter, any business at all.

Before you tell me that this cannot be done on your operation, allow me to explain that I cannot remember any case where this was completed with ease. Every one of these Clients had challenges to overcome and required a solid game plan! We became focused after the dramatic downturn in 2006. I recall getting to the end of 2006 and saying to my wife, “Man, I hope we never have another year like this one. I am exhausted!”

Little did I know what was waiting around the corner in 2009 with its rock bottom milk prices or in 2008, 2012 and 2013 with record high feed prices… So, clearly we lost some ground (or made progress at a slower rate) in those years, but we still pushed forward.

 I believe the keys include:

1.)    Develop a plan and have clearly established Goals to shoot for in terms of profitability and debt reduction.

2.)    Make sure your debt structure allows you maximize your cash flows and still reduces your overall debt levels each year.

3.)    Don’t borrow for anything unless you need to, but when you do, shop for the best rates and repayment plan.

4.)    Monitor your results every month. This is the only way you can stay on track and ensure that you reach your objectives.

5.)    Push yourself and increase your goal levels every year, whether it is on profitability, debt reduction or both.

6.)    Never give up. As Winston Churchill stated, “Never, never, never give up.” That, my friends, is a definite!

7.)    When you reach your Goals, as I am confident you will, celebrate with your Team. Remember, they helped you get there.

8.)    Finally, if you get off track, get some qualified assistance. You gain absolutely nothing by claiming that you never needed anyone’s help to get where you are but then “hit the wall,” as so many businesses have the last five years. If you need some guidance, get some. Why wait?

This will allow you to re-focus on Steps 1-7, after which I believe you will be well on your way to achieving higher levels of success, your reward for Next Level Thinking!

Entering a New Game!

Welcome to a new year, a fresh season and a clean slate – all with the makings of a positive start. With this new beginning, we all get a clean score card without any pluses or minuses. The scoreboard simply has all zeros. Unfortunately, this state won’t last long.

Take a quick look at your results for last year, and figure out what went well and what areas need to be improved. Are you prepared? I realize this can be a difficult question, but what have you done to prepare for this year? Have you set new Goals and developed a Plan for reaching them? This process can be challenging, but it definitely is needed in every business (including mine). Here is a list of questions designed to assist you with this preparation process:

  • Do you know what you want to accomplish this year? Share these objectives with your Team.
  • Have you set specific goals for items that have a direct impact on your efficiency? Written goals will keep you consistently focused on your target.
  • Do you have an established system in place for measuring your results on a regular basis versus just waiting until year end to see how it all works out?
  • Take the time to establish profitability goals on a monthly basis. Do you measure your margins monthly?
  • The best thing you can do is to measure your outcomes versus your plan regularly. There is no better way to know whether or not you are on track!
  • Do you have established Team Accountability measurements in place? These should be set with your employees and your outside professionals. People do not rise to low expectations, but, in all cases, it always helps to know what your expectations (Goals) really are.
  • Do you have a system in place to measure these results throughout the years? With my Clients, I use a scheduled set of Management Team Meetings with them, their key employees and other professionals to track our results throughout the year.
  • Finally, as the saying goes, “Plan your work, and work your plan.” Having a plan in place will dramatically increase the odds that you are more successful this year. Using this tool as a guideline for what items you need to focus on improving will serve you well as you proceed forward.

Following a solid plan based upon the points listed above and your business’ unique aspects, and then measuring your monthly results against an established plan, will get you closer to your objectives. Best wishes for a successful year!

Busy Earning a Living…!

Do you ever go through a period of time when, no matter how much work you finish, you just cannot seem to catch up, leave alone get ahead? I know I have had this feeling at times. Maybe it’s just part of being caught up in the never ending race called Corporate America, yet even today I find myself getting caught up in this “race,” and I don’t actually work in that arena anymore…

I recently talked with a friend who just could not seem to get everything done. In fact, I talked to him several times over a period of three days. Each time that I did, he sounded like he was further behind. No, it wasn’t because he had talked to me those times. I believe it was because he was suffering from what business author Mark McCormack described as “working too hard earning a living, to really make any money.”

He was so focused on trying to get everything done, that he had never stopped long enough to determine what items on his lengthy list were most important. In fact, did I say he had a list? Perhaps in his mind he did, but he killed his own efficiency by failing to take several key steps.

First, he never stopped long enough to literally make a list of the items he needed to complete. Additionally, he did not take a moment to prioritize them. I believe this is what Stephen Covey referred to as “beginning with the end in mind.” He needed to decide what he wanted to accomplish and then prioritize the tasks that would get him closer to those specific goals.

What? Who has time for this, you ask? I would suggest that the process of making a list could end up saving you a significant amount of time. Making a list and determining what is most important, what should be second, and so on would likely save you a considerable amount of time. Who knows? You might even find some synchronization of steps where you and your colleagues can gain some efficiency by working together…

 My advice is that when you get this “busy,” you need a road map planned out more than ever. Most people don’t plan to fail. They simply fail to plan and then lose their focus. I suggest you give it a try, because as famous investor Warren Buffet says of such times, “It’s only when the tide goes out that you find out who’s not wearing swimming trunks.”

Going for the First Down!

Not long ago, I had a Client who informed me of their desire to acquire more land. I asked them if they were ready for it. “Of course we are!” was their immediate response. “Are you sure?” I asked. “Absolutely! No question about it,” they replied, “and it will only cost us $1,000,000 to buy it.”

I then asked them if they were ready to pay $350,000 in the form of a down payment. Of course, they wanted to borrow the whole $1,000,000 purchase price. Unfortunately, that was not an option, since they did not have enough equity built up in their other property. As a result, their bank would require them to front the 35% down payment, allowing them to only borrow $650,000 of the total price. 

Needless to say, they were not thrilled with this concept of having to come up with the first 35% and naturally asked how they could do that. I suggested some budget trimming and, more significantly, establishing a plan to reach the $350,000 milestone. There were several items that I suggested they could use for this saving plan.

On their dairy site, I suggested they save the cash from the sale of bull calves and all cull cows, or at least as much as possible. “Whoa, but that’s our spending money,” they exclaimed. “Yes, and most people who buy homes and other real estate also save their spending money,” was my response. 

I also suggested that they take any miscellaneous revenue, as well as any government program payments they received and put them away. This amounted to at least $165,000 per year on their dairy operation, beef ranch and cropping operations. While I realize that this would require some sacrifice on their part, I also knew that they would not have any regrets if they actually reached their goal. 

Business success, as well as life in general, is a series of tradeoffs. There’s no such thing as a “free lunch,” but that does not mean you cannot achieve your objectives if you work toward them. Sometimes that requires difficult sacrifices, but I happen to be of the opinion that these are the price we have to pay to achieve what we’d like to. 

I realize that saving money in our country seems to have gone out of style. We need look no further than our own federal government for a perfect example of this. I’d elaborate on that point, but it would require more text than I can include in a blog post. 

Ironically, this Client opted not to save their funds and make any more land acquisitions. I guess they felt it was too much of a sacrifice. However, after I suggested this to another Client, they started right away and in nine months had saved enough to add a new maternity area and transition barn for their fresh cows. As a result, their milk production is up by four pounds per cow per day. Their reward will continue indefinitely. 

That sounds like a solid return for their sacrifice! If you would like to learn more about ways to save money, either in your business or personally, check out my website at www.success-strategies.com or take a look at my latest book Saving for a Sunny Day at https://www.createspace.com/4588708. I hope you find it helpful to you!