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!