Tag Archive for: Business Success

I recently reread Tim Ferriss’ first book entitled The 4-Hour Workweek and noted a special recommendation that he made. It was based upon an old Chinese Proverb, which advised us to always know what we are getting involved in ahead of time and went something like this:

  • Always know the Rules of the Game.
  • Know the Prize for which you are competing.
  • Know when the Game Ends.

As I read those words, I started thinking about how they also apply to business dealings.

For example, before you enter any loan agreement with your bank or another institution, it’s critical that you know what the “Rules of the Game” are. What is expected of you in maintaining a satisfactory loan relationship? What are the loan covenants? What can happen if you don’t fulfill all of the covenants? Is there a reasonable remedy that you can provide if this occurs? I would expect that after last year’s challenging financial results, there will undoubtedly be some covenant violations…

Knowing what the prize is at the end of the “game” can be helpful, especially if you are being faced with profitability and covenant challenges. Sometimes, borrowers can let their pride get ahead of the potential prize at the end of the game. Often, this can lead to getting over-extended on loans in terms of Debt Service Coverage. Hence, the need for accurate Cash Flow projections & ongoing measurement (https://success-strategies.com/).

Finally, know when the game ends. When has your objective been reached? Perhaps, more importantly, know when enough is enough… Obviously, the game ends when you pay the loan off in full, but what happens if you run into problems before the loan is paid in full? Will your banker work with you to resolve the challenge you are facing? This is always good to know ahead of time, because, as some borrowers are facing today, their bank’s workout group has become more of a “kick-out group.” While it is admirable to get refinanced elsewhere, the current lender does not need to make it a painful process or one lacking support.

On the contrary, let’s put strategies in place to assist the borrower to make the necessary changes, possibly sell some assets and get themselves back on track financially. This is never an easy process and as George Bernad Shaw suggests below, it may not even seem reasonable, but it is definitely worth pursuing:

“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.” George Bernard Shaw

Let’s take your business to the Next Level!



Recently, I read an article by Joshua Becker entitled
“The Seven Laws of Success.”

In it, he stated:

“Success, in my opinion, is
controlling what I can (my actions) and dedicating my life to the right things.
If I can do that, I’ll be pleased with how I choose to live. And I will
consider my life a success – regardless of the results.”



To accomplish that objective, the author lists his Seven
Laws of Success:



·      
“Choosing Our Own
Values – Rather than chasing the latest fads in life or in business, let’s
focus on what is most important now. Former Notre Dame football Coach Lou Holtz
calls these WIN’s – i.e. “What’s Important Now.”



·      
Aligning Resources
with those Values – This process will guide us to always focus on what really
matters. It will assist us to stay on course and target the items that are essential
to our life and business success.



·      
Not Measuring Life
with Someone Else’s Ruler – This is essential when we make business
comparisons. While it may be helpful to compare your business with others in
your industry, it is even more crucial that you compare yourself with how you
have done historically. This will help propel you to higher levels of success
& avoid the “trap” of comparing yourself, unrealistically, to other
operations that may be far larger or newer than yours.



·      
Committing to
Continuous Growth – This is applicable to our businesses & our lives. We
can always strive to be better. It is what Tony Robbins refers to as CANI,
Constant & Never-Ending Improvement.



·      
Controlling Your
Attention – It is so easy for us to get distracted by outside variables.
However, it is imperative that we focus on what really matters and, more
significantly, on the items we can control.



·      
Living for Others –
Here, he is referring to being selfless and striving to help others. For
example, build your business to serve your Family, your Church or your
Community.



·      
 Doing the Next Right Thing the Best Way We
Know How – As Theodore Roosevelt stated, ‘Do what you can, with what you’ve
got, where you are.’” This will undoubtedly lead to success. Lou Holtz added
that you should always “Do what’s right. Do the best you can. And treat others
the way you want to be treated.” That sounds like a real success plan to me!



Let’s take your business to the Next Level!

I was recently reading an article by Charles Hugh Smith entitled “Five Themes Will Decide This Decade.” Frankly, it was scary to read these themes, but he may be correct.

In the article, he listed the five themes as Sclerosis, Dysfunction, Debt Saturation, Power Asymmetry and Nobody Trusts Anyone. He describes Sclerosis as a power grab by a few people in our society, regardless of its impact on the rest of us. He suggests that this problem cannot be solved, but I believe it can be cured at the polls.

His second theme was Dysfunction, a state where nothing works, and there appears to be no self-correcting systems. Have you mailed anything recently? This is being compounded by the third theme, Debt Saturation. No matter how much money we throw at a problem, things do not seem to improve. Are we headed there with our current government borrowing?

His fourth theme revolves around Power Asymmetry, where we start to feel like we have little control over anything. That is challenging, but the saddest theme he included is a society where Nobody Trusts Anyone. This has been partly created by the Covid pandemic and the way it was handled. However, as he points out, the ultimate problem with low trust is that it can create a stagnant economy, which may be happening right now, accompanied by inflation. This combination is known as “Stagflation.”

My suggestion? Let’s change our approach to each of these themes:

  • On Sclerosis, let’s be more entrepreneurial. That is what made this country great, and what will move us forward again. As an entrepreneur, I feel much more in control of my destiny, and you will, too.
  • Likewise, when your future depends on making things work, rather than just levying more taxes, being more entrepreneurial is the best approach to becoming more functional.
  • On Debt Saturation, let’s start borrowing less. That is how it works for all of us with our home budgets, and it works very well.
  • To obtain more power over our decisions, it pays to be more entrepreneurial. I can attest that I feel more “in control” today than I ever did when I was working for banks…
  • Finally, if we want to build more trust, I suggest that we follow the advice of my Business Coach Dan Sullivan of the Strategic Coach organization. He offers his best “Referability Habits” as follows:

“Referability, in all places and at all times, depends upon four crucial habits:

  • Show up on time.
  • Do what you say.
  • Finish what you start.
  • Say please and thank you.

 Although these seem like common sense, a surprising number of people in this world, including entrepreneurs, do not practice these four habits.”

I think you will agree that we need a new approach to our current challenges.

Let’s take your business to the Next Level!

Recently, I was talking with a friend of mine about the possibilities of growing our respective businesses ten times. Many people would say’ “No way! That will only increase my stress levels…”

On the contrary, business coach Dan Sullivan, co-founder of The Strategic Coach organization, offers the following:

“The most stressful thing any entrepreneur can do in the 21st century is to try to stay where they are and hold onto what they already have. Stop where you are, and things will only get more confusing, isolating, and frustrating.”

I imagine that many of us have experienced that feeling, as we have faced the combined challenges of industry stagnation, inflationary cost increases and higher interest rates. However, Dan, who has been my business coach since 2003, suggests that there is a way to break out of this. Adopt a 10X mindset, allowing you to become the cause of change in the world, not the target of it.

Before you write this concept off as being ridiculous, stating that you don’t want to grow your business to 10X its current size, please consider the following idea. What if you grew it by 5 times with half of your current labor or other inputs? I have done that during the past 10 years.

Would you like to know how? I hope you do! Technology has been the answer for me. We have automated so many tasks that we can get more work done in less time than we had previously completed. What technologies should you consider using to boost your efficiencies?

Author and speaker Grant Cardone is adamant about one point on 10X growth. He stated that there are likely numerous ways to double the size of your business, but there are only one or two ways to grow 10X. The good news is that you won’t waste time studying items that don’t really produce big results! Instead, you can focus on the few concepts that really do produce greater success, yielding much faster progress!

To conclude, here are three questions from Dan Sullivan to consider:

  • “What 10X improvement will simplify everything else in your company the most? How and why?” Is it automation, robotics, or other possibilities?
  • “What new 10X capability will free you most from being commoditized? How and why?” In other words, what could differentiate your company?
  • “What’s the one 10X breakthrough you can achieve that no one else in your industry would ever think about? Why?” Think about this concept, and I’ll see you at the finish line.

Let’s take your business to the Next Level!

Let’s consider the possibilities. If you are a dairy producer or almond grower (and they are not the only ones facing greater financial pressures…), you have been faced with lower prices this year. At the same time, your costs of operation have grown substantially, particularly in the areas of Labor, Fuel, Fertilizer, Feed and most other operating expenses.

Did I mention the higher cost of interest? In its efforts to stave off inflation, most of which was created by political geniuses spending money like a drunken sailor these past several years, the Federal Reserve Board has raised interest rates 5.50%, creating a lot of pressure on producers with any debt. What can we do?

One option is to worry, but I’ve never seen a case where that really helped. Mark Twain described worry as “paying interest on a debt you never owed…”

Another potential approach is to just complain, but no one really wants to hear that. As former President Teddy Roosevelt suggested, “Complaining about a problem without providing a solution is called whining.” What else is available to us?

Why not “Take Action?” Be cognizant of the previously mentioned challenges and then take steps to offset them.

Decide which variable you want to tackle first. Define the outcome you want as clearly as possible. Set a date for its achievement.

Recognize that there will, indeed, be obstacles for you to overcome. Yes, there are always plenty of them. Next, based upon what you currently know (and we never have complete information), decide what steps you can take. Discuss it with your Team and determine who will lead the project & its required steps. Finally, set your Action Plan, based upon the outcome you want and move forward.

Here’s a recent case I experienced with a client. He needed additional funds to buy more cows & fill a new free stall barn. Even though his Loan to Value % (LTV), after borrowing for the new cows, would only be 60% or less, his bank did not want to provide the necessary funds. Our solution? He offered an additional 20-acre parcel as collateral, and they provided him with a 20-year Real Estate Loan. Now, the LTV % on the cows was around 40% (which provided us with future borrowing capacity, if needed). The bank was happy because of the lower LTV % on the herd loan, and they had more collateral. The Client was pleased because he could add the needed cows, and his Cash Flow was improved due to the extra milk sales & a 20-year amortization on the RE loan vs. 7 years on a cow loan. Problem solved.

If you run a dairy of any size, I have recently introduced a system to allow you to measure your dairy operation’s cash flow results. I call it the Success Strategies AdvantageTM, and it is designed to create a budget for your dairy operation, using numbers for your region of the country, measure your actual results against this, and provide you with crucial Break-Even numbers. Check it out at www.success-strategies.com today.

Let’s take your business to the Next Level!

No, I am not Darth Vader, but I really believe this is a good question for each of us to ask ourselves. I recently listened to a speech by Matthew McConaughey, also known as the speech that broke the internet, where he explained that knowing who we are begins with knowing who we are not.

If you haven’t heard that speech, I highly recommend you listen to it. I find it very motivational. However, what does he mean? Please allow me to provide you with a couple examples.

I had a Client several years ago who sold his dairy operation. He had children, but none were interested in running the dairy. One was an outstanding Doctor, and the other child was a very successful Accountant. He was the third generation on the operation and had done very well. Unfortunately, he felt ashamed because he had no children to take over for him. Following extensive discussions, I reminded him of how well he had done, how successful his two sons were, and how he had continued his family’s legacy for a third generation, at a time when dairying was no easy task. In essence, to convince him that he was, indeed, a success story, he needed to recognize what he was not – someone who would live forever – because no one can do that.

I had another Client whose banker convinced him that he should diversify his operations. He was a lifelong dairyman, but he became convinced that he should diversify into almonds, too. On the surface, it sounded good. Almonds were bringing $3/pound. What could possibly go wrong?

Well, over the next five years, development costs soared from $6,000/acre to $12,000/acre. Operating costs skyrocketed and, magically, the $3/pound price dropped to $1.80. Oh, and did I mention that the Federal Reserve Board ratcheted interest rates up by over 5%? His stress levels jumped dramatically. He had done a great job of diversifying, but he was simply tired of the worry associated with the higher debt levels and soft returns.

Effectively, he began to realize identifying whom he was began with recognizing who he was not. He was not one to deal with the stress associated with higher debt levels and lower margins. He divested part of the almond property and got himself back on track.

What items do you need to consider as you recognize who you are by first identifying whom you are not? I wish you well with this crucial process.

If you run a dairy of any size, I have recently introduced a system to allow you to measure your dairy operation’s cash flow results. I call it the Success Strategies AdvantageTM, and it is designed to create a budget for your dairy operation, using numbers for your region of the country, measure your actual results against this, and provide you with crucial Break-Even numbers. Check it out at www.success-strategies.com today.

Let’s take your business to the Next Level!

It has been interesting to observe recent delays on loan approvals with several of my Clients. Frustrating, yet interesting, since the delays seem to occur for no real good reason.

I understand that all parties, particularly the bank, need to have sufficient, current information to make a good loan decision, but once they have it, why does the approval process take 3-4 weeks? No one’s analysis should take that much time…

Does the borrower benefit from this extended approval process? Not likely, especially when they have vendors who are dealing with uncertainty. This uncertainty will probably not lead to any cost savings. Similarly, it can jeopardize a borrower’s operation by generating doubt about their future.

What if interest rates go up in the interim period, as they have been for the last 18 months? It ends up costing the borrower even more.

At the same time, does the bank benefit if the rates increase? Probably not, because their “cost of funds” will also increase, leaving them with a similar margin. Additionally, whenever a borrower’s operation is negatively impacted, the risk level also increases for the lender.

Finally, if vendors decide to charge higher prices for their products, as we have seen with inflation’s impact these past two years, an operator can be hurt even more on the margin front. The air of uncertainty that is created is never beneficial for anyone. As Winston Churchill stated, “The ultimate sum of the maybe’s is always no.”

So, what are we waiting for? Let’s move forward and make a reasonably sound decision, if you have the information you need, whether it’s a Yes or a No.  Loan decisions are not like fine wines. They don’t get better with age. Instead, let’s follow the sage advice of Churchill who also said, “Let our advance worrying become advance thinking and planning.” Let’s move forward, for we have no time to waste.

To assist you with your own financial analysis, I have recently introduced a system to allow you to measure your dairy operation’s cash flow results. I call it the Success Strategies AdvantageTM.  It is designed to create a budget for your dairy operation, using numbers for your region of the country. 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.

Let’s take your business to the Next Level!

Often, Clients will ask “Why does this improvement process take so much time?” I often respond with a thought from my business coach Dan Sullivan of The Strategic Coach organization who said, “Reaching your goals doesn’t take a lot of time. It’s not reaching your goals that takes a lot of time.”

What does he mean?

First, goals can be elusive and sometimes difficult to achieve. However, they should provide you with a source of motivation, not frustration.

How, you ask. They can provide you with motivation, because if, for example, you set a goal to boost your revenue by 20% next year, what exactly must happen? You have to start thinking of ways to make this occur. Are you going to expand? Can you simply become more efficient? Can you raise revenue levels while possibly streamlining your cost structure? Do you need to make some personnel changes? The point is that setting new objectives will lead you to take steps to achieve it, because we all know that goals will not just naturally happen on their own…

The key here is to pursue constant and never-ending improvement. Don’t allow this to become a source of frustration. As Dan Sullivan stated, what takes so much time is not reaching your goals. Why? The reason is that you can become frustrated when you are not achieving your goals. Unfortunately, you can even get to the point of ignoring them, simply because you are disappointed and no longer want to think about them…

It is far better to set new, challenging goals, because it is the only way you will likely achieve them. It is possible to reach some levels of achievement without establishing specific goals, but if you don’t set some objectives, how will you even know when you have reached them? I suggest that you clearly define your goals, outline specific steps for hitting them and then focus on attaining them. If you do, your odds of seeing success will jump dramatically!

Be on the watch for our upcoming Next Level Thinking™ workshops.  Let’s take your business to the Next Level!

This has been a challenging year for many people. I understand that our economy has been tough in some respects. Most costs are going through the roof, and you are likely having problems hiring the workers you need to grow your business. Some banks are being difficult to deal with, especially as they have their loan portfolios more closely scrutinized by their auditors.

One thing that we need to remember on these issues is that they are primarily items that we cannot completely control. With that in mind, I suggest that we shift our focus to items that we can control. Here are a few examples:

  • Business Productivity – Is your business running at peak efficiency? I have seen some business people operate their business in a total “cost cutting” mode, hoping that “when things get better, I’ll throttle my way back to full force.” Unfortunately, most businesses cannot turn up the production & efficiency activities overnight. On the contrary, they usually take some time to hit their peak results. Here is a better approach: Keep things running at their peak levels all the time! If you do, you won’t need to spend time playing “catch-up.” When prices go up, costs decrease or labor becomes more available, you will already be poised to seek new levels in your business.
  • Cost Controls – While you cannot possibly maintain 100% control over all your costs, you certainly can strive to keep them in line to a great extent. How? As I have stated many times, if you measure something, you can understand it. If you understand it, you can control it, and if you can control an item, you can certainly improve it. The same is true for your costs. The solution? Monitor them regularly, compare them with industry standards and make improvements where you can.
  • Measurements – Sometimes, I feel like people compare their businesses with neighbors far too often. The problem with this is that you and I really don’t know the specifics of their operation, its finances, or the amount of debt they might be carrying. A better comparison would be: How are you doing compared to last year, or even better yet, in comparison to your last three years? Are you moving forward or not? If not, what do you need to change?
  • Share your results & your future business plans with your banker. Scary thought? It shouldn’t be. I can think of two good reasons to regularly meet with your lender. You will definitely want to be prepared with good information, and it will also lead you to measure your results more often. These are both good things!

In any event, if you stay on your “A game,” you will be better prepared for two scenarios. First, you will likely be ready to play the survival game in a downturn. Additionally, as I mentioned above, in the event of a positive upturn in the economy, you will be poised for a quicker rebound and attain improved results without the need to suddenly “crank things up.”

Either way, be prepared to run your operation at 110%. I think you will be glad you did! Be on the watch for our upcoming Next Level Thinking™ workshops.  Let’s take your business to the Next Level!

Vilfredo Pareto was an Italian economist who made numerous contributions to economics, particularly in the area of income distribution and people’s choices. He is best known, though, for his observation that 20% of the population owned 80% of the property in Italy, which, of course, was later generalized into the Pareto Principle and eventually into what we now know as the Pareto Distribution.

Given the current turmoil in our economy, this is a great time to identify the 20% of your activities that drive 80% of your results, and, yes, some of these may seem like small, trivial tasks, but they can drive big results!

“But, John, I just don’t seem to be able to find the time for these high priority items…” This is a line that I hear often. Take a deep breath and realize that you may find the time if you do less of the other 80% of your tasks…

One suggestion for you is to make sure that you are not “micro-managing” your Team, because it takes so much time. Instead, help your employees grow in their roles. Most people don’t come to work with the intent of doing a bad job. Rather, they want to help you succeed. Give them the opportunity to do just that.

One of the best and, frankly, most effective bosses I have ever had did three things. He explained the goal or end objective, made a few suggestions, and then simply oversaw our process. However, he did not micro-manage us. Your employees may occasionally fall short, but that is exactly how they grow, and as long as it is not catastrophic, you will be fine.

So, what are the areas where 80% of your results can come from 20% of your efforts? Take some time today to think this through, and please don’t get discouraged if your results don’t exactly match up at 80/20. You may achieve 70/30 or even 60/40 on some items. That’s okay. You’ll still be better off than getting only 20% of your results from 80% of your efforts!

It’s not necessarily a perfect science, so enjoy the process. And remember, this is not a one-time task. It can pay huge dividends if you complete the process on a regular basis. As new technologies and ideas surface, your 80/20’s may start to come into greater focus. When they do, you’ll be able to start enjoying the process.

That, my friends, is why we call them the “Top 20%.” Be on the watch for our upcoming Next Level Thinking™ workshops.  Let’s take your business to the Next Level!