Where Do You Get Your Confidence?

I thought it was a stupid question. However, it did come directly from a finance professional who was a serious worrier, and with him, “the sky was always falling.”

My response was that my confidence came from completing 150-200 Cash Flow Analyses per year for the last 20+ years. In other words, this “wasn’t my first rodeo.” One item that added to my confidence was this Client’s long-term history and their solid Cash Flow performance.

If you complete this type of analysis regularly, it will undoubtedly build your confidence. Whether your Cash Flow results look positive or negative, you will gain a much better grasp of your numbers. The largest benefit of this entire process is that if you measure the Cash Flow of your operation, you will understand it better. If you understand it, you can start to gain control over your Revenue & Expenses. If you can control these items better, guess what? You can improve them, and that is the ultimate benefit of completing this process.

Ray Kroc of the McDonald’s Corporation said, “I didn’t invent the hamburger. I just took it more seriously than anyone else.” Similarly, I didn’t invent the process of Cash Flow Analysis, but I have definitely taken it more seriously than most people! In fact, now I’ve created a system for you to complete your own Cash Flow Analysis. I call it the Success Strategies AdvantageTM . With the input of about 20 numbers related to your loans and feed inventory, it will create a budget, using numbers for your region of the country. Then, after you input about two dozen “Actual” numbers from your QuickBooks or other accounting system, it will provide you with the following items:

  • A Year-to-Date (YTD) Cash Flow Comparison of your operation compared to a budget that is based upon typical numbers for your region of the country.
  • It will show you where you may be over or under budget.
  • It will provide you with Break-Even Levels for Milk Price/cwt, Feed Expense & Production per cow per day, all useful information for reaching higher levels of profitability, as well as setting your price level coverage through the Dairy Revenue Protection (DRP) and Dairy Margin Coverage (DMC) programs.
  • It will also equip you to better understand where you might be over budget and help you to talk with your Team (e.g., Nutritionist, Veterinarian, Financial Consultant & Others) about how to refine your numbers
  • Finally, it will give you solid information to share with your banker, showing how you are currently doing and guiding you about future changes or investments that will help you streamline operations.

I recommend you look at it by visiting www.success-strategies.com to see if it will assist you to be more profitable.

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