When Should I Start This?

Recently, I read an excellent quote from author Joshua Becker in his book Things That Matter, which stated:

“If we wait to be healthy, perfect, and prepared in every way, we’ll never accomplish anything. Everything valuable that has ever been done was done by someone with flaws and wounds.”

So, having read this, what’s the message? Do it now. In my last blog, I discussed what to do if you are feeling stressed about inflation and its impact on so many rising costs, and who isn’t worried about these challenges?

What action steps can we take, starting today? As I explained in my prior blog, let’s begin with controllable items. Recently, I had a Client who suggested that everything is so high right now, he can’t do anything… Really? I quickly pointed out that there was one guy in his operation who was essentially contributing nothing. “Yes, but if I tick him off (by suggesting that he work…?), he might leave.” And, I asked, how would that be a loss? If he isn’t contributing anything, wouldn’t we at least be saving his salary in the budget?

What can we control? Fixed interest rates? I’ve been cautioning Clients to start locking in long term rates for over a year. Fuel costs? We can’t completely control the cost per gallon, but if the price is continuing to rise this summer and you know you’ll need fuel for this year’s cropping program, why not “pre-buy” it now? Can you contract some other costs? This may result in thinner margins, but isn’t that better than negative margins? Remember, we cannot always hit a “home run,” but singles win games, too.

As I explained previously, we need to measure all items, simply because if you measure something, you can understand it. If you understand it, you can begin to control it, and if you control it, you can improve it! This process can also assist you to plan for long term capital expenditures, especially if they can further improve your efficiencies and cash flow results. The real question is – Why Wait? Do it now, and as I suggested previously, what will happen?

You will likely find new solutions, refine your processes and make further improvement. What then? Let’s celebrate at the finish line!

Let’s take your business to the Next Level!

How Can I Manage this Inflation?

Recently, I read an excellent article from Dave Ramsey, CEO of Ramsey Solutions about the correlation between the current financial stress being caused by rising inflation and people’s mental wellbeing. It led me to conclude that my Clients are facing the same challenges, perhaps on an even larger scale, as business owners…

Dave pointed out that costs are definitely rising and, as a result, so is the stress level among people all over the country. Wow, I thought, we are seeing this first hand with the dramatic rise in commodities & fertilizer in agricultural operations, to say nothing of labor & fuel costs being at all-time highs!

And then he made my day by saying the same thing I’ve been sharing with Clients for the last 24 years! “Having worked with people in financial stress for 30 years, my team and I have figured out that there’s more anxiety from the unknown than from the bad news. It’s a weird thing, but when you write items down, they no longer have the same power over you. What this means right now, in this discussion, is sitting down and doing a budget and looking at everything, no matter how difficult or unpleasant the facts are right now, and no matter who caused the problem at hand.”

I am so thankful for Dave Ramsey’s statement. I have been pushing Clients in this one area for many years. You will recall that I’ve said numerous times previously that if you measure something (in this case your Budget or Cash Flow), you can understand it. If you understand it, you can begin to control it, and if you control it, you can improve it! Additionally, though, I think Dave Ramsey makes an excellent point, and that is this: If you have a clearer understanding of your Budget position, whether it is positive or negative, it holds less power over you, i.e., your life is less stressful.

Now, that doesn’t change the fact that if you are losing money every month, you need to start taking action, because, as my Business Coach Dan Sullivan says, “All progress begins with telling the truth.” Then, once you know what the facts are, you need to build a plan to overcome your challenges. Identify your major obstacles, select potential courses of action to take to overcome them, and then build a plan to implement these steps.

These steps will undoubtedly lead to items you need to change. Don’t resist these changes. Remember the definition of insanity, doing things the exact same way and expecting different results… As author John Delony suggests, “connect with someone for an outside perspective, make a list of the things you can control and the things you cannot control,” and get after the items that you can control, because, as Dave Ramsey points out, “When you control the controllables – that’s when your hope starts coming back.”

What will happen? You will probably identify new financial solutions, refine your processes and make continual improvement. What could be wrong with that? Nothing! If I can assist you with this process, please let me know!

Let’s take your business to the Next Level!

,

It Worked How Well?

Have you ever stepped back from your operation and suddenly realized that some tasks, frankly, just weren’t being done, either correctly or often enough? I have. In fact, we probably all have at some point.

I first realized this, as a result of a Strategic Coach workshop exercise I completed with my business coach Dan Sullivan. It was entitled: “It worked so well, I quit doing it.” In my case, I realized that there were a few tasks that had previously been completed by a member of our Team who left. After her departure, none of us had picked up this task. For a while, it literally worked out just fine. However, we took this task for granted and simply quit doing it. Eventually, the problem with this approach surfaced, and I realized where we had gone wrong.

When we had a change of personnel, we did not train the new hire sufficiently. This often happens in business. So, what did we do?

We developed “Task Worksheets” that clearly outlined all the Key Tasks that needed to be completed on a regular basis. These were created by the person who was responsible for this task. Then, if someone left or got promoted, we had no issues with tasks being completed properly. All we had to do was refer to these worksheets, and if we had questions, we talked about them. Sometimes, this even helped us to refine our processes and make them better.

If you want to land in your industry’s top 10% for profitability or some other measure, you will need to:

  • Perfect & streamline your processes, assuring that they get done, no matter what.
  • Once these processes are in place, automate as many as you possibly can (feed pushing, report generation, other repetitive tasks).
  • Then, when you feel you have it covered, look for more tasks that you can outline a procedure for and, if possible, try to automate them. How? Gather your Team, ask them (because they typically know best), and then experiment.
  • Identify potential problems, ask what could go wrong, and then build a plan to avoid or overcome these issues. As Astro Teller of Google Works explained last month at the Abundance 360 Conference, “Celebrate learning, and celebrate the process, not just the outcome. Judge yourselves on experimentation, not outcomes.” This will result in optimal steps and more positive outcomes.

What will happen? You find new solutions, refine your processes and make continual improvement. What’s wrong with that? Nothing! Let’s celebrate at the finish line!

Let’s take your business to the Next Level!

What Was He Implying?

Recently, I had a meeting with a Client and his banker, designed to update the bank on our progress to date and our plans for the next 12 months. Usually, I find these sessions very beneficial for both the Client and his bankers. This one was somewhat tense, as I had expected it would be, given that I had rejected all of the bank’s “recommendations” for this operation…

Let’s look at three of them:

First, they felt the Client should sell his heifers to raise capital and pay down debt. Really, I thought, and what will they use for replacements? Perhaps they could buy them, but based upon what we’ve seen on the prices of springers & fresh two-year olds these past several months, that would have been costly.

Next, they suggested that he sell his entire herd and just plant trees. This has merit over the long term, but if the client sold his entire dairy herd and planted trees on all of his farmable acres, what would his revenue source be during the next 4-5 years while these trees were coming into full production. This also would require a major capital expenditure and addition of debt. How could they service the interest on this new debt?

Finally, the bank suggested that we sell part of the Client’s land to reduce debt. Their Loan-to-Value on the real estate was 40%. Wow! In hindsight, we would have missed the upturn in land values for properties like this that have multiple sources of water.

Upon rejecting these shortsighted suggestions, we were immediately reminded about how lucky we were to have their financing… He suggested that the dairy industry was such a train wreck waiting to happen, so we should get out while we can. I wonder if I should forward him a copy of the Daily Dairy Report, showing $24-25/cwt milk prices? Yes, feed is high, but margins should still be solid.

At this point, I borrowed a line from former Vice President Mike Pence in the 2020 VP Debates and stated, “You’re entitled to your own opinion, but you are not entitled to your facts.” So, what was he implying?

  1. That this was a short-term game? Perhaps it was for the bank, but not for my Client. They were in it for the long haul.
  2. We didn’t know what we were doing? Since this discussion, heifer prices are up, and I’m glad we are not having to buy any. Trees are great, but I’d hate to be buying feed on the open market today with its high prices.
  3. Land values are up, and, as result of this and the solid herd management that has been put in place, several other banks are now interested in this credit relationship.
  4. Why decrease debt levels if your Loan-to-Value percentages are in line with positive industry standards and your performance is steadily improving? I don’t know.

This Client’s performance is trending upward and is on track to exceed our projections for this year.

Please allow me to leave you with this: Are you receiving the most optimal financial advice? If I can assist you on this, please feel free to contact me.

Let’s take your business to the Next Level!

Have You Ever Been Caught in the Gap?

You may recall the concept of the Gap and the Gain from a prior Next Level Thinking blog that I published on March 15, 2022. I’d like to explore this concept further because I believe it can impact many of us in both our businesses and lives.

As Dan Sullivan, the creator of the Gap & Gain Concept and Co-Founder of the Strategic Coach organization, stated, it’s similar to walking toward the horizon for 30 minutes and then looking toward it. You will feel like you’ve made no progress at all (the Gap). However, if you look back and see how far you’ve progressed in comparison to where you started, you will experience what he describes as the Gain. The same principle holds true in your business.

Similarly, if you start contracting some of your costs (feed & fertilizer) or some of your revenue streams through programs such as the Dairy Revenue Protection program or other Hedging Strategies, you can get caught in the “Gap” where you are looking at where you’d ideally like to be and then get frustrated with your current progress.

On the contrary, if you observe how far you’ve come today in comparison to where you started two years ago, your primary focus will be on the progress you’ve achieved, instead of “utopia.” This will help you avoid encountering unnecessary frustration.

Dan goes on to explain that some people who are very successful have great lives and are quite satisfied, while others in similar circumstances are very unhappy. “Why is that? The key is in how they look at life. The brain has a great ability to see a vision of how things could be in the future. The trick is to use that ‘ideal’ as inspiration, and not to measure your progress against it, because it will always continue to change and evolve as you do.”

He adds: “In order to feel happy about your achievements, you need to measure them against where you’ve started from. This will keep you out of ‘The Gap’ and constantly living in the positive zone – ‘The Gain.’ When you measure your progress against your starting point, you will always have a sense of success, satisfaction, capability and confidence.”

I would agree that your best approach will be to always measure your progress against where you started. Then, celebrate your “Wins” along the way, too, and realize that you are, indeed, making gains. Before you know it, you’ll be across the finish line of success!

Please allow me to leave you with this: Are you being caught in the Gap?

Let’s take your business to the Next Level!

Are You Caught in an Uncertainty Trap?

I recently came across a quote from my Business Coach Dan Sullivan, which I feel is appropriate for our current times:

“Entrepreneurial confidence lies in the willingness to look for the certainty and uncertainty in every situation.”

                                                Dan Sullivan, Co-Founder of The Strategic Coach

I believe you’ll agree that there is a great deal of “uncertainty” in our lives right now, but are you spending adequate time identifying both the “uncertainties” and the “certainties” in your business and life? While we need to give sufficient study to both areas, we need to be careful we don’t get caught up in just those that are uncertain. If we do, we will be subjected to freezing up our thinking, and, in general, that is not a positive outcome.

Beginning with items of certainty, I suggest that you identify them and consider how you can integrate them into your business operation. However, if they are truly “certainties,” there is no need to dwell on them. Simply consider how they can help you, and then address the “uncertainties” that you are facing.

To start, recognize that these are areas that you are unsure of, so we need to consider multiple possibilities or potential outcomes that could occur.

  1. List your objective, i.e., your best possible potential outcome and set a date for its completion. Remember, a goal without a deadline will likely remain a “dream.”
  2. Next, list all the potential obstacles you are facing. Some of them could be those same uncertainties. Then, outline potential strategies you could use to overcome them, as well as who, specifically, will implement the strategies you’ve listed.
  3. Once you’ve refined your steps, take Action on them!
  4. Will you call 100% of these steps perfect? Probably not, but as Motivational Speaker Les Brown stated, “All you can do is all you can do, but all you can do is usually enough!” The problems arise when people start taking shortcuts and don’t actually do all they are capable of doing…

Follow these steps, completely & thoughtfully, and you’ll be able to master the process of Strategic Planning. When you do, many of the prior “uncertainties” will become more certain, effectively providing you with “Stepping Stones” to greater levels of success!

I hope you find these recommendations helpful in your business. If I can assist you further with this process, please contact me. It’s one I use with Clients on a regular basis.

Please allow me to leave you with this: Are you caught in an uncertainty trap?

Let’s take your business to the Next Level!

Have You Been Accused of Being Passionate?

I recently read a fantastic blog by my friend Peter Diamandis, best selling author of Abundance, Bold and numerous other great books, within which he describes the three-step process Sir Richard Branson follows in developing and running his businesses.

Peter describes those steps as: 1.) “Being passionate and committed to fun. 2.) Experimentation. 3.) Risk mitigation.” These steps have served Branson well, as he has developed 500 different businesses to date.

The first of these revolved around having Passion for the business being developed and keeping the process fun. Do you utilize Passion & Fun in your business? Passion is what helps you to get up in the morning and hit the ground running. As Peter Diamandis explains so accurately, “Fun matters because Branson employs it as a strategy for thinking at scale – both as a fuel (i.e., a way of harnessing his passion) and as a first principle, assuming that if something is fun for him – like an airline that makes you say ‘Wow!’ – then it’ll also be fun for everyone else.”

How about Experimentation? Do you experiment with your business and then adjust course, as needed, or do you only implement changes because others in your industry are doing something? Given the large number of variables you are constantly facing, try some experimentation and then adjust course, as necessary. I think you’ll be more excited (passionate) about your level of progress.

Finally, on Risk Mitigation. You can be bold in your level of risk taking, but also be equally bold in your risk mitigation. In all agricultural markets, you can use options to offset your level of price risk. More specifically, if you are running a dairy, you can use programs like the Dairy Revenue Protection (DRP) or the Dairy Margin Coverage (DMC) to put a floor under your prices and maintain a positive margin. I highly recommend that you check out these programs. They are worthy of consideration every year.

I hope you find Richard Branson’s three-step process helpful in your business. If I can assist you with this process, please contact me. It’s a process that I use with my Clients on a regular basis. If you want to check out Peter Diamandis’ writing further, please visit www.abundance360.com.

Please allow me to leave you with this: Are you being passionate about your business?

Let’s take your business to the Next Level!

Are You Currently Caught in a Comparison Trap?

It is a fairly common practice to compare your operation with others in your industry to check “how you compare with others.” This is a good idea, but it also has some limitations that we all need to keep in mind. Is your business identical in absolutely every respect to the others being used in the Comparison Summary? I doubt it.

With this factor in mind, please feel free to review these comparisons, but then let’s take this process even further. My Business Coach Dan Sullivan stated that “Amateurs compare, but professionals measure.” What does he mean?

Given that your operation is not identical to every other one used in the industry comparison, I think we need to be careful. For example, if you are milking in a double-12 herringbone parlor, it will be tough for you to compete with a 50-stall rotary barn for labor costs. If you have 12 employees, but a similar size operation has robotic milkers and only six employees, will that be a fair comparison? Probably not. If you are farming 200 acres vs. someone with 2,000 acres (& probably bigger, better equipment), will you look competitive? Not likely…

May I suggest an even better approach? Look at these industry comparisons, and then go one step further. Look at how you performed in your most recent year compared to the prior three years. From this, you will acquire a more beneficial comparison, because you will be comparing “apples to apples.” This is looking at your business from year to year and will tell you where you are making progress, as well as what areas you probably need to seek improvement on.

You will recall that I’ve suggested that if you measure something, you can better understand it. If you understand the measure, you can then control it, and if you can control a variable, you can improve it. That principle works here, too. If you see some cost in your operation rising (for reasons other than short term supply issues, e.g., with fuel), you can then focus on ways to improve this area, using the year-to-year comparison you have made with your own operation.

Of course, there’s nothing wrong with aspiring to remain competitive with the top tier of your industry, but you need to be sure to keep this in perspective. Otherwise, you can get caught in a trap of what Dan Sullivan describes at the Gap and the Gain. For example, if you walk toward the horizon for 30 minutes and then look toward the horizon, you will feel like you’ve made no progress at all (the Gap). However, if you look back and see how far you’ve progressed in comparison to where you started, you will experience what he calls the Gain. The same principle holds true in your business!

Consider looking at your operation vs. others, but don’t overlook the progress you have been achieving within your own operation. That way, you’ll benefit more fully from the comparisons, and if I can assist you in measuring your progress, please let me know.

So, think about this question: Have you been caught in a Comparison Trap?

Let’s take your business to the Next Level!

Are You Prepared for the Great Resignation?

I recently read an article that discussed a trend in the U.S. I don’t know if it will actually come to fruition, but I certainly think it’s worth consideration. What the article suggested was that we will all be facing a trend called “the Great Resignation.”

I feel we are already seeing it, to some extent, these past two years with increased employee turnover at many businesses. Unfortunately, it’s being compounded by COVID-19 and government handouts, also known as “subsidies.” Early and mid-career workers are starting to look at their jobs and ask: “Is this what I want and how I want to work?”

If this trend continues, we are going to witness a lot of turnover, upward pressure on wages, and a movement toward shorter hours & greater benefits. If you need an example, just look at these current trends in California. They have already started…

Most importantly, what can you do? I see three potential options.

  1. Train your workers better. Why do we assume that every new employee knows how to do every task and that it’s “cost prohibitive” to teach people how to do even better at their tasks? I remember talking to a manager who stated that margins were tight, and that there was nothing worse than training people and then having them “leave for the competition.” I suggested that there was one thing that was worse, and that’s not training them & having them stay!
  2. Introduce more automation. We are seeing this more with robotic milkers, automated feed pushers, and “catch pens” used in conjunction with collars on dairy operations. These may look expensive, but what is the alternative, shutting down due to an insufficient labor force?
  3. Prepare for more turnover. This option isn’t very attractive, and, frankly, can give most of us serious heartburn… Remember, it may look like the least expensive route, and initially it may be so, but there are many hidden costs to this approach, such as the cost of regularly having to hire new people, constant training for the same jobs over & over, the cost of taxing your managers, and these are only IF you can find replacement employees. What if you can’t?

Finally, why participate in the “Great Resignation?” You may have to pay more, but why not invest in your best people and help them to grow and succeed in their roles? Bear in mind that turnover of employees is costly. Let’s be proactive and side-step this destructive trend.

So, think about this question: Are you prepared to overcome this Great Resignation?

Let’s take your business to the Next Level!

Are You Prepared to Not Blink?

In a recent interview before their playoff game with the Kansas City Chiefs, Mike Tomlin, Head Coach of the Pittsburgh Steelers, was adamant about what it would it take to beat the Chiefs at Arrowhead Stadium. He stated:

“Don’t blink. If you’re a blinker, cut your eyelids off. This is not gonna be for the faint of heart. We understand what type of game we’re in. It’s gonna take a ridiculous effort and 60 minutes of it. And we’re excited about it.”

As a Chiefs fan, I’m happy that the Chiefs won the game very handily, but the main point is this. Aren’t you and I in the same position in our respective industries? We cannot afford to blink today, can we?

If you are running a dairy operation, your feed costs are higher at present. If you are a grower who is selling these higher priced feeds, your year may seem “easier,” but you have to be thinking way ahead about upcoming taxes and other challenges. All businesses today are being slammed with higher costs, simply due to inflation and the recent supply chain challenges. My goodness. It practically costs $200 just to have someone look at a simple repair anymore, that is if you can find someone to look at your necessary repair(s)…

If you are buying or selling assets, decide what you want to pay or are willing to take, in the case of a potential sale, and then don’t look back. Don’t blink!

If you are negotiating with a bank, never blink. Instead, have a well laid out plan, know your pluses & minuses (what’s fairly sure & what’s uncertain), and then act accordingly to implement your plan. If I ever blinked with a bank, I’d never be able to complete “business turnarounds” successfully. I can think of two specific cases in the last three years where the bankers were insistent that my Clients should start selling assets. I totally disagreed.

In both cases, I was proven correct over time. Did it happen overnight? No. However, it did not take long before my projections came to fruition. Yet, I had to hold the course, just like Gimli in the Lord of the Rings movies, who said, “Certainty of death, small chance of success. What are we waiting for?” There was no “blinking” allowed.

In both cases, these Clients are now well positioned for added success. Yes, they had “dug a financial hole,” but they were also very willing to change course. Of course, the best way to get out of any hole is to stop digging! To their credit, these operations are now both on track with sound cash flows, rising prices they are receiving, outstanding productivity and finally some diversification plans in place. They have a bright future.

So, think about the question above: Are you prepared to not blink?

Let’s take your business to the Next Level!