Which Way Will You Go?

It seems that there is a great deal of uncertainty on the part of business people today. There are numerous reasons for this, including the impact of higher inflation, its rising costs, higher taxes and maybe even more regulation. The following excerpt was written by a lady named Jacqueline G. back in February to the Editors of the Stansberry Research newsletter, and while you may or may not agree with her thoughts, I believe there is a positive message here for us.

“Many of your readers writing in seem to have the mindset that life needs to come to a complete standstill until interest rates subside. Yeah, 3% was nice. I locked in a refi at slightly more than that.

But I entered college when Reagan was Prez. When he took office, the Prime Lending Rate was something like 22%. My guaranteed student loan rate was 13%! And that was supposed to be a better rate than the bank would have given me. 13%, folks! There was no Amazon yet, and I got gouged like crazy for my college textbooks. A few years later, when hubby and I bought our first house, interest rates were down. That little starter home only cost us 9.5%.

Life didn’t stop back then, and it won’t stop now. People need to work and shop and go to school and buy houses and cars and get married and have babies and start businesses and go to the doctor and on and on. If the media would shut up for five minutes, people might actually go live their lives instead of whining about interest rates. Does the government’s own debt load and the interest on that make a difference now? Of course it does, and you can thank your elected representatives…

Meanwhile, I have a life to live. And I have better things to do than complain about interest rates, which is about as useful as complaining all the time about the weather.”

As I said earlier, you may or may not agree with Jacqueline, but her comments are worth reviewing. What is the message?

First, life moves on, and we all have a choice. Will you move forward or digress? I think it’s also important to remember that in these challenging times, it’s not just about cutting costs. Maybe it’s about boosting efficiencies. I recently had a Client, whose labor costs are off the charts, apologizing for his operation’s labor inefficiencies. If it truly is not his employees’ fault that their labor costs are so high, then it’s his responsibility to work closely with his employees to squeeze more productivity out of the business, either by updating and streamlining activities or possibly automating some tasks.

The point is that we can never wait for these items to fix themselves. While this may, indeed, be a challenging time for our economy, we cannot wait for things to be “just right” to make changes. Go forward and create a game plan for improvement!

Can I assist you with your Success Plan? If so, please contact me.

Let’s take your business to the Next Level!

Are You Feeling the Cash Crunch?

If you are like a lot of business people, my Clients included, you have to be feeling pressured with the impact of inflation on so many costs. These include fuel prices, which, frankly, could be improved with clearer thinking and less political drama. However, it also includes items such as labor, insurance and just about any type of supplies or building materials.

If you aren’t feeling the impact of these rising costs and the painful rise in interest rates, as a result of the Federal Reserve Board’s efforts to control inflation, you are truly “living a charmed life…” It appears, as I write this, that the Fed is gaining better control over inflation, but, unfortunately, it is still at the highest level we have seen since 1980. Yet, the unfortunate thing is that once we incur these price increases, they will likely stay with us for a long time.

Thus, it becomes imperative to budget for these higher costs and then manage them as much as possible. Where do we begin? My Business Coach Dan Sullivan, co-founder of the Strategic Coach organization, said, “All progress begins with telling the truth.”

What is he saying? Specifically, he is stating that we need to clearly identify where you currently are in terms of costs and the offsetting revenues you are producing in your business.

Please recall that in prior writings, I’ve suggested that if you measure something, you can understand it. If you understand it, you can control that item, and if you can control it, you will be better positioned to improve it.

The specifics of these revenues and expenses, mentioned above, represent the Measurement part of this success formula. Once you have measured them, you can obtain a better Understanding of them, providing you with the ammunition you need to positively Control them. It will give you the detailed information you need to analyze your cost structure, in comparison to your available revenues, and make changes that can Improve your business’ bottom line results.

Will it be perfect? Probably not, given the variables I listed at the beginning of this article. However, it will position you to complete regular monthly comparisons of your Budget vs. Actual results and then make changes, as necessary. Additionally, if you set out some written goals, create action commitments related to them, and share these with your business partners, banker and employees, you will have created an “Accountability Team” that will help keep you on track. The benefits of this process can be enormous!

What I find especially appealing is that when you implement this process, you will be the greatest beneficiary of these steps. While it may sometimes appear that your banker, for example, is consistently hitting you with MUSTS, an acronym for “Making Up Stuff To Scare” themselves, they really do have your best interest in mind. Your Banker, your Vendors, your Family and your Employees all want you to succeed! And, I do, too.

Can I assist you to be more successful? If I can help you on this, please contact me.

Let’s take your business to the Next Level!

What Does It Take to (Really) Fail?

That is an excellent question and, likely, one that we often attempt to avoid answering. However, putting a more positive spin on the same question, what can we put into place to minimize the chances of us meeting with failure.

Famous business consultant W. Edwards Deming, who developed the foundation for the large success of the Japanese automotive industry stated that “94% of all failure is due to the system!”

Now, without knowing the specifics of your business operation, I cannot in all honesty tell you what systems you need to put in place to succeed. Frankly, none of us has all the answers. For example, why does sour cream have an expiration date? It’s already sour, isn’t it?

All joking aside, if you want to maximize your chances for success, Apple CEO Tim Cook suggests that you, “Do what you love and put your whole heart into it.” In other words, do everything you can to optimize your results.

With that in mind, do you have business systems in place for your operation? One approach is to think through all the tasks that need to be completed on a daily, weekly or monthly basis. Then, outline the steps, actions & requirements for completing those tasks.

As you outline those items, consider how they should be completed, in the event that you were not there to supervise their completion. I’m not wishing anything bad for any of you, but true systems allow people to function in an optimal manner, regardless of who is doing the activities. That is precisely why you need these tasks to all be written down. Then, if you have a health issue or are gone on a vacation, even a new employee can complete the necessary steps.

Remember, Systems are key! One other point for consideration. Get your employees involved in developing & outlining these systems, because when you are gone on that vacation I mentioned, they will be the ones successfully implementing the system. In fact, they will be more likely to take “ownership” in it if you have included your Team as you outline your business protocol and solve challenges!

Are you positioned to succeed? If you don’t determine a plan for your business and life, guess what?  Someone else will! It may be your banker, your landlord or some government bureaucrat. If I can assist you on this process of developing better systems, contact me.

Let’s take your business to the Next Level!

Are You Currently Vulnerable?

In a recent Inc. magazine article I read, its author Marcel Schwantes talked about the value of being vulnerable. Sound scary? I thought so, initially, but what the author talked about was the benefits of being vulnerable with your Team, for example.

What are the primary benefits? First, Dr. Rene Brown calls vulnerability “the birthplace of innovation, creativity and change.” She explained that this is necessary for leaders to connect with & inspire others, e.g., employees.

We often think of vulnerability as a sign of weakness. However, Brown states that vulnerability is one of the most accurate measures of courage: “I cannot find a single incident of courage that is not completely underpinned by vulnerability… Think about the last time you saw someone do something that was brave, and I guarantee you vulnerability will be there.”

It is also about building trust, for example with your key employees. In other words, it is okay to let them know that you do not have all the answers. In fact, it’s very healthy, and will likely lead them to step up and assist you. It also lets them know that you are only human…

I hope you find this discussion helpful. Being vulnerable can often be sign of maturity and a solid leadership skill!

Are you positioned to succeed? Remember, if you don’t determine a plan for your business and life, guess what?  Someone else will! If I can assist you on this process, please contact me.

Let’s take your business to the Next Level!

Having Budgeting Issues?

Considering the rising costs of so many inputs today, are you concerned about your bottom line results this year? If so, I think you are on the right track for meeting with greater levels of success. Congratulations for thinking ahead!

As I have stated so many times previously, if you measure something, you can understand it. If you understand it, you can control it, and if you can control an item, it is far easier to improve it. Yet, to truly measure our bottom-line results, we must have a system to accomplish this process. That is where an Annual Budget becomes crucial. It’s very difficult to make Actual to Budget comparisons when you don’t have your expected results budgeted.

As we consider the current rise in other operating expenses, a person can start to feel overwhelmed. I understand.
 
Ultimately, however, we each need to rise above the pressures & move forward. No one ever said that life would be easy. I love the following quote from management guru Peter Drucker in his book entitled The Age of Discontinuity:
 
“The best way to predict the future is to create it.”
 
What does he mean? I believe he is saying that we need to do all we can to create the future we want to have. Wherever we are in life, we made an appointment to be there. Our positions today have been determined by choices we made in the past. Future results will be influenced by what we do today.
 
1.)  The volatility of all agricultural markets has risen during the past 20 years. That’s a fact. However, the tools to deal with this change have been in place for quite some time. You can use put options to protect against severe downturns in milk prices without giving up the upside potential of higher prices. I know that they cost money & may go unused, but not using them just because they may not be exercised makes about as much sense as scolding your insurance agent because he sold you house insurance and your home did not burn down!
2.)  You can contract some costs as much as you are comfortable with. Many of my Clients have been doing this for years. Unfortunately, during the last 10 years, I have observed that many feel the need to lock in every item at the absolute minimum cost. This is probably unrealistic for anyone. Do the best you can, but don’t hesitate to make the decisions you need to in a timely manner.
3.)  All of your other expenses can be projected and should be monitored on a monthly basis. Regular review of your expenses can be critical to catching those cost items that are getting out of line earlier. Start by developing a reasonable budget to make your comparisons with, and if you need assistance, please contact me.
4.)  Finally, even with a solid plan in place, you can occasionally get off track. The key is to recognize the problem early & get back on course.

Are you positioned for success? If the consideration of these four points can boost your financial results, why not give them a try? I have seen this process work for my clients. If I can assist you on this process or in seeking increased efficiencies, please contact me.

Let’s take your business to the Next Level!

What Was It that Killed the Cat?

They say that “curiosity killed the cat.” That may be true, but perhaps that’s why they supposedly come equipped with nine lives…

One of the most curious and successful people ever was the late co-founder of Apple Steve Jobs. Apple’s Chief Design Officer Jony Ives explained in the Wall Street Journal that Jobs “was without doubt the most inquisitive human I have ever met. His insatiable curiosity was not limited or distracted by his knowledge or expertise, nor was it casual or passive.  It was ferocious, energetic and restless.  His curiosity was practiced with intention and rigor.”

How curious are you in your business?  Ives goes on to explain that “our curiosity begs that we learn. And for Steve, wanting to learn was far more important than wanting to be right.” We can utilize curiosity to challenge others’ limiting views of the world.  Entrepreneurs and other leaders often create real value by questioning current belief systems. Entrepreneurial business coach Dan Sullivan states “Opportunities for entrepreneurial innovation and profit are increasingly found in the failure of bureaucracy.” 

Inc. magazine states that curious workers are good for business.  One prime example of this is with 3M Corporation, whose employees are instructed to spend 15% of their time experimenting with the development of new products. How much time are you spending developing new ideas and systems within your business? This is not a time to “play scared!” All of our businesses will be facing additional challenges as we move forward, and I think the cost of this experimentation is vastly outweighed by the benefits of being curious. It is noteworthy that employees who are curious will positively impact their coworkers. If that is true, then imagine the positive impact of adapting this new approach.

Are you positioned to succeed? Remember, if you don’t determine a plan for your business and life, guess what?  Someone else will! If I can assist you on this process or in seeking increased efficiencies, contact me today.

Let’s take your business to the Next Level!

Having Productivity Challenges?

Are you facing some productivity hurdles in your business? A recent article in Inc magazine by Marcel Schwantes entitled “Research Says Employees Need 3 Things to Drive Their Happiness at Work” stated that “happy workers are, quite simply, better and more productive workers.”

Now, before you tune out this message as “stupid happy talk,” please consider the potential impact of these three factors. The first is having a “meaningful and compelling vision.” In other words, do your employees see a vision of the future for your business and truly understand how & where they fit in? Schwantes points out that this can foster greater loyalty than money and perks alone can provide. In summary, do your employees see this future vision, and do they understand their role in it? Without these key ingredients, productivity levels will suffer.

The second key ingredient is “connecting their purpose to work.” If people feel that their work matters, their productivity will usually increase. Make a point of discussing how even the most mundane and repetitive tasks contribute to your Team’s overall mission and success. This can be a great motivator for your employees.

Finally, it will support and be beneficial to “fostering healthy relationships.” Trusting and supportive relationships lead to greater levels of collaboration and a more positive work experience. Schwantes explained that “when those relationships are present in the workplace, employees report a much more positive employee experience than when that support is absent (77% vs. 35%).”

Are you positioned for success? If the consideration of these three points can boost your productivity, why not give it a try? I have seen this process work for my clients. If I can assist you on this process or in seeking increased efficiencies, please contact me.

Let’s take your business to the Next Level!

How Do You Measure Success?

Are you thriving in your business or simply surviving? This is a crucial question to answer, especially as we move through years that are financially challenging. As I mentioned in a prior blog, the rising costs of doing business will always make it more difficult to reach your Break-Even Levels.

Add to this the increase in interest rates and a few additional regulatory items, and suddenly you are facing some genuine barriers to your success. In my last blog, I stated if you measure your costs, you can understand them. If you understand them, you will be better able to control them, and, of course, if you can control them, you can improve them.

Reaching your Break-Even Levels can then become more attainable, but there is even more to this success process than what may be initially obvious. What else can we do to improve your profitability?

  • Boost your efficiencies. If you can make improvements in your operation by streamlining tasks or even automating them, results can improve. I have several dairy clients who have automated the processes of pushing feed up in front of their cows, using a robot. It’s an important job that just, frankly, wasn’t being completed often enough. The robot completes this simple process 10-12 times per day, boosting milk production per cow, and never takes a vacation, calls in sick or has a Workers’ Comp claim…
  • Look at potentially cutting unnecessary costs. Are there certain tasks where you find yourself defending the old way of doing things? It is crucial that we look at ways that we may be able to reduce or even eliminate steps without impairing our results. Can some processes even be combined in your operation?
  • Are there tasks, once again, that can be automated? As we look at the rising costs of labor, or perhaps more significantly, the challenges of even finding enough employees, this is worth looking into. I have another Dairy Client who has automated the process of milking his cows. Installing these robots helped him reduce his labor costs by a substantial amount and will pay for themselves in a relatively short time frame, and that was before the minimum wage & overtime rules were updated for next year. As the minimum wages rises, the pay scale of these skilled workers will increase, too, making the payback of the robots even quicker.

Are you positioned to succeed? Being on your “A Game” requires fine tuning your efficiencies, as discussed above, and then developing a Budget that can help you navigate tough times, any slowdown in the economy and rising interest rates. Measure your Actual Results vs. this Budget, and make the changes necessary. I have seen this process work for my clients for the past 24 years. If I can assist you on this process or in seeking increased efficiencies, please contact me.

Let’s take your business to the Next Level!

Could This Be the Answer for You?

If you are like most business people, you have probably been feeling your profit margins tighten as we have gone through this year. If not, you are truly living a “charmed life…” Frankly, I believe most of us have been feeling this effect, given the ridiculous prices of fuel, fertilizer, and general repairs, both at home & in our businesses.

What’s driving this? I believe it’s a combination of foolish policies and terribly poor planning on the part of those in charge of setting our country’s direction. What is the answer?

It’s rather “Spartan,” but I suggest you “prepare for battle.” Not literally, of course, but rather from the perspective that you must be on guard in terms of costs. For example, I’ve been hearing that our costs of doing business will likely be rising in 2023. Really? I guess the same folks doing these measurements have not noticed that the cost of flights has already doubled and fuel is up at least 50%…

Most importantly, do you know what your costs of production truly are? Recall that I have shared many times that if you measure your costs, you can understand them. If you understand them, you will be better able to control them, and, of course, if you can control them, you can improve them.

This is crucial, because it forms the very basis of Break-Even Analysis. This is true for any operation, regardless of its size. Break-Even Analysis takes your Revenue & Expenses and then tells you what items you need to change, with all other items remaining the same, to reach your Break-Even Level, the point at which you will not lose money.

It is far better to be on the leading edge of this than to be playing “catch-up.” Why wait? If I can assist you with this process, please contact me at your earliest convenience. As industrial magnate Charles M. Schwab stated: “Keeping a little ahead of conditions is one of the secrets of business…”

Let’s take your business to the Next Level!

What Can We Do?

I received an interesting email about my last blog about how courage can be contagious. With that in mind, I wanted to provide you with some thoughts that motivational coach Brendon Burchard shared recently.

He pointed out that people who are facing self-doubt typically do one of two things. They either “stop dead in their tracks” or use this event as a “trigger to kick it in!”

As Brendon explained, “the first phase is when a Crisis Happens.” This is normally when people start seeking safety and security. They may even do crazy things, like ‘hoarding toilet paper,’ as some people did at the beginning of the COVID-19 pandemic.” Remember?

“The second phase is when people start to cope with the crisis. If you are in the Stress Management Mode, you may begin feeling self-doubt, become overwhelmed and start asking the question – ‘Why am I going through this?’” A better approach would be to use this challenge as an opportunity to get prepared!

“The third phase is to start realizing that you need to overcome this challenge and build positive progress.” In other words, as I stated in my last blog, commit to a plan. Outline the necessary steps, recognize the hurdles you may face & how you’ll overcome them, determine who will implement the necessary action steps, and put a deadline on these tasks. Otherwise, they will simply remain a “dream,” not something you’ll actually bring to fruition.

This will take some time but, once again, you will probably find new solutions, refine your processes and make additional, positive improvements. And, please remember what my Business Coach Dan Sullivan said about this: “The are no unreasonable goals; just unreasonable deadlines.

I’ll look forward to seeing you at the finish line!

Let’s take your business to the Next Level!