Tag Archive for: Future

Why Aren’t You Dancing in the Rain?

I recently listened to an excellent, brief video completed by Matthew McConaughey entitled “Motivation.” I found it very uplifting and wanted to share its message with you today.

In his video, he shared six truths that you may find helpful:

  • “Life is 100% better when people know less about you.” At first, I thought he may have shared this, following the intrusions of the public life that he has led. However, the more I thought about it, the more I felt this may be true for all of us in business. When we consider the amount of information demanded of us today, from banks & the government, the reporting can seem overwhelming. Thus, I recommend you give them everything they need but limit it to just that.
  • “Never take advice from those who are not where you want to be in life.” Instead, determine your goals, recognize the hurdles, set your standards, outline your steps, take action and don’t necessarily listen to others who say you cannot do that. Often times, they are mistaken.
  • “Eventually, everyone will show you who they are. Just give them time.” I learned this recently when a bank offered a loan proposal to a Client of mine and then reneged on the offer two weeks later.
  • “Be smart enough to create your own opportunities in life.” Don’t wait for them to come to you. Go out and create them yourself. People value ingenuity, and there are items that only you can provide to the world! Lay out your plan & take positive action.
  • “The secret to happiness is freedom. The secret to freedom is courage.” You must act. Remember, no statue was ever erected to an “observer.” They are only built for people who take decisive action. Recognize your role, build a plan & go forward!
  • “We will always have some conflict in our lives.” Learn to deal with it and adjust your perception. As the Boy Scouts of America advise: “Improvise, adapt & overcome.” As Matthew McConaughey states, “You can either cry in the storm or dance in the rain.”

What is next for you?

Please let me know if I can help you. You can reach me at john@success-strategies.com.

Let’s take your business to the Next Level!

What Do I Do Now?

A lot of businesses, especially in the dairy industry, have run into cash flow problems during the past 18 months. Of course, this has also put negative pressure on their working capital position, i.e. the amount of short-term inflows of cash minus their immediate obligations for outgoing disbursements.

Much of this negative financial pressure could have been avoided, but sometimes politicians overlook the “unintended consequences” that can accompany their efforts at “vote buying…” Unfortunately, with the advent of excessive stimulus money, we were rewarded with increased inflation and higher interest rates from the Fed, as they attempted to rein in the effects of inflation.

As a result, most businesses were hit with higher costs, including labor. Of course, workers also need to survive financially, necessitating higher wages. Regardless, this is where we are currently.

So, “what do I do now” is a question many producers are asking today. Should I sell out while asset values are elevated to new highs? Will there ever be a better time to exit?

These are both great questions. However, I believe a better question to ask is this: “Is it sustainable? Can you cash flow, given the current & expected economic variables?”

For example, in the dairy industry of 2023, milk prices were average at best, and feed costs were exorbitant. Add to that the rising costs of supplies, repairs, labor and fuel, and we are in a perfect storm of negative cash flow and weakened working capital, as described earlier.

The problem is that for most businesses, they cannot borrow their way out of this, and even if they could, banks have been unwilling to provide the necessary refinancing needed. Thus, we need to look at the sustainability of these operations. I would invite you to look at the Cash Flow Analysis tools offered at https://success-strategies.com/shop/ to help you in your measurement. There you can run your YTD Cash Flow Analysis & complete some “What If” scenarios. For example, what if I could lower my labor expense by one Full Time Equivalent (FTE)?

If your operation is sustainable, at least at more normal Revenue & Expense levels, is it still something you want to do? Alternatively, do you want to exit and capture the Equity that you have built up over the prior years? Please take the time to truly consider your “Why?”

Believe me, if you know your “Why,” the “How” part becomes more straightforward. Is your “Why” for the family to continue for many more generations, is it to put your children through college or some other reason? This answer is crucial for you to reach.

To recap, to answer the question of “What Do I Do Now?”

  • Consider the business’ sustainability.
  • Really identify your “Why.”
  • Then, if you wish to move forward, study every Revenue source, potential new ones, and opportunities to diversify your operation.
  • Finally, study every cost & ask yourself, if I needed to cut my costs by 5% to reach break-even levels, could I do it? What would I reduce? Your answer will follow this process naturally.

This should provide you with methods to find financial relief for your business. What is the Next Step for you? Please let me know if I can assist you. You can reach me at john@success-strategies.com, and consider the following advice:

” Some men have thousands of reasons why they cannot do what they want to, when all they need is one reason why they can.”

Willis R. Whitney

Let’s take your business to the Next Level!

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How Do You Prefer to Spell It?

I was recently thinking about two words that are quite similar. Those words are Creative and Reactive. They contain the same letters but have different meanings. In business, as in life, they represent vastly different approaches.

Let me provide you with some real-life business examples:

  1. Your bank emails you and suggests that your Inventory Report is late. You react by finally submitting it to them. The creative approach would be to already have submitted the report. Hence, in response to their request, you forward the completed report that you’ve already submitted 2 weeks earlier. Check mate!
  2. In a reactive state, you wait until you have substantial Accounts Payable past due over 120 days and then attempt to figure out how you will ever get them caught up… A more creative approach might be to discuss the tight cash flows with some of your vendors to see if you can get better payment terms or talk this over with your banker, in anticipation of upcoming budgetary challenges. Then, you will be prepared through a credit line increase or a possible real estate refinance.
  3. A reactive borrower waits until interest rates are supposedly at the absolute lowest point, even though the Prime Rate has been at 3-3.5% for 15 years. A creative borrower looks for a fixed rate that he can live with, in terms of his budget, and gets it locked in before rates climb 5.50%, as they have during the past two years.
  4. A reactive person asks, “Why put pricing options in place? Why spend the money for options when prices are so good?” A creative person considers putting a floor under his prices as a form of insurance to protect his margins in good times and in periods of low prices, rather than just in times of calamity.
  5. A reactive businessperson simply calls 911 when a worker gets hit with a heart attack or other serious ailment & hopes for the best. A creative one sets up protocol to not only call 911, but they also have employee meetings where workers can learn about safety issues and even learn CPR.
  6. Going back to fixed rate loans, when rates were lower & times were better, the reactive person suggests they can always fix rates later. The creative borrower watches rates closely, because you never know when an industry can be hit with a downturn, low revenue streams or higher input costs, as we have seen during the past 24 months. He fixes rates when it makes the most sense, not in the middle of  a cash flow squeeze when banks may be reluctant to offer new financing.

As you consider these comparisons, which one best describes you – Reactive or Creative? This is a crucial question for you to address. Your future success depends upon it. Please let me know if you would like some assistance at john@success-strategies.com, and consider the following advice:

“You, too, can determine what you want. You can decide on your major objectives, targets, aims and destination.”

W. Clement Stone

Let’s take your business to the Next Level!

What’s in Your Future?

Today, we hear a lot about the advent of automation in our business operations, especially with the introduction of Artificial Intelligence and other new technology. I find it interesting that Warren Bennis, professor of business at U.S.C., offered the following thought back in the early 1980’s:

“The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”

This sounds like a fully automated system. Are we approaching this point with the introduction of more and more automation & technological advances? Quite possibly.

My first Client to automate a major task was through using a robotic machine to push up feed throughout the day. I believe at the time it cost about $40,000. However, it replaced one full-time employee, paying for itself in less than one year. More significantly, it enabled them to complete a task that was not being completed consistently. As a result, the Client’s milk production per cow has climbed by ten pounds per cow per day, offering an even bigger payback.

Comparing the Labor costs on dairies with robotic milkers vs. conventional milking setups is eye-opening. Our experience is that it is 1/3 of the cost of the conventional setup. Additionally, there is little cost for the robot’s time, there is no overtime pay and they don’t require Worker’s Comp or Benefits coverage. I estimate that the payback on these units is easily within 5-6 years, to say nothing of the improved production, herd health and other benefits.

The point is this. Automation is becoming more and more available. Fortunately, it is surfacing where I hear the most common complaints from Clients – in the challenges of Labor.

My advice? Take positive action today and check out the payback on these automation options. Warren Bennis alluded to their benefits 40 years ago, and now we are there.

Are you prepared for this challenge? Do you have a plan for overcoming its obstacles?

I’d love to visit with you more about my work with other Clients on these areas and how you, too, can achieve an improved outcome. Please let me know if you would like some assistance at john@success-strategies.com.

Let’s take your business to the Next Level!

Are You Playing by the Rules?

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!

What If Your Business Was 10X Greater?

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!

What If Stuff Happens?

There is a process that I like to complete each year with my Clients, usually in the early months of the year. I call it the “Goals & Disaster Agenda” process.

The Goal setting part of the process is fairly self-explanatory. Most of us are familiar with that process. If not, please look back at my prior blog. As entrepreneur and author Grant Cardone stated in his book The 10X Rule, “I suggest that you become obsessed about the things you want; otherwise, you are going to spend a lifetime being obsessed with making up excuses as to why you didn’t get the life you wanted.”  His statement is quite clear.

However, the development of a “Disaster Agenda” is perhaps a new concept for you. In this, we list the three worst things that could happen to our business in the next 12 months. Just in case you think this is overly zealous, consider some possibilities: Your bank gets acquired and the new management team doesn’t want to finance you any longer. You lose a key employee to a competitor. Inflation increases and, hence, interest rates go higher. These are all genuine possibilities.

The key is not to “dwell” on these concerns, but rather to consider what may occur. More significantly, give some thought to what you would do in response. The best reason for doing this is, of course, if it actually happens, you will be better prepared. Likewise, if something similar takes place, you have already given consideration to your potential action steps.

As a result, you will definitely be better prepared and less likely to get caught off guard. In the infamous words of Yoda in the movie Star Wars: The Empire Strikes Back:

“Named must your fear be before banish you can.”

I hope you find this process helpful, as you plan for greater success this year!

Please check out the Success Strategies Advantage™ software today at www.success-strategies.com today.

Let’s take your business to the Next Level!

Have You Built Your Gameplan Yet?

Wow! It’s the start of a new year, and we all get to start with a blank slate. Effectively, the score is 0-0. Regardless of what last year brought, the most important question is “What will you do this year?”

Some people call this Goal Setting. I prefer to call it “Future Setting.” My reasoning behind this is that your entire future can be built upon the foundational steps that you take now!

At the risk of sounding redundant, there are some crucial steps to follow:

First, decide what you want to accomplish. While this may seem obvious to you, many people are unable to clearly define what they do want. Oh, they can tell you what they don’t want out of life. However, stating exactly what they do want can be more challenging.

So, step #1 is to define your objective and define it clearly in your mind & on paper.

Next, it is only natural that our minds will present all the obstacles to this goal. That’s okay for two reasons. To begin, you must consider whether or not this task is actually achievable. This is a good “check point” for us to consider.

Beyond that, however, it leads us to consider what steps we need to take in order to overcome these challenges. Can we complete these tasks? Just as significantly, who will lead the process and by when will the various tasks be done?

This is crucial, because we can otherwise end up like the four characters named Everybody, Anybody, Somebody and Nobody. After their committee meeting, Everybody thought the task should be completed, Anybody could have done it, Somebody certainly should have, but in the end, Nobody really followed through.

To avoid this challenge, define the task clearly, consider the challenges you may face, and what steps you need to take. Then, take action, measure your results and fine tune your plan as you move forward.

Remember, getting results requires making a plan, outlining the necessary steps and then taking action. However, as St. Jean Baptiste stated:

“On this path, it is only the first step that counts.”

What’s your first step?

Was This the Perfect Storm?

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!

Are You Paying Attention?

In a recent article by Joshua Becker entitled “Controlling Your Attention: The Most Important Skill of the 21st Century and How to Do It,” he points out that we are all constantly being distracted by both big and small items.

However, he explains that our attention is “the driving force that shapes our lives. It is what creates wisdom from our past experiences and helps us to make the most out of the skills we’ve developed, the education we’ve experienced, and the talents we’ve accumulated. It is our attention that puts these assets to work, allowing us to make the most of our potential.”

Controlling our attention sounds simple, doesn’t it? Not really. Many of us, myself included, are thinking about work tasks when we are with our family and then worrying about family matters when we are busy at work. Here is what Joshua Becker suggests:

First, “Simplify Your Environment.” Remove the clutter around you, and I’d suggest – focus only on the Top Three Tasks you want to achieve each day. You may also complete some smaller added tasks, but make those Top 3 your primary focus.

Second, he suggests “Practice Mindfulness.” Clear out the distractions. As martial arts expert Bruce Lee said, “Bring the mind into sharp focus and make it alert so that it can immediately intuit truth, which is everywhere. The mind must be emancipated from old habits, prejudices, restrictive thought processes and even ordinary thought itself.”

Next, “Notice When Distractions Are Getting Your Attention.” If this happens, it is crucial that we refocus and get back on track.

Fourth, “Understand Both Big and Small Distractions.” Both can impact our focus. Small ones might be online distractions such as Facebook or unimportant emails. Bigger ones might be constantly worrying about items that most likely won’t even happen. Mark Twain described this as “Paying interest on a debt you never owed.”

Fifth, “Prioritize Time.” In other words, determine or set your intention for the day. If you don’t do this every day, you can potentially be trapped in someone else’s agenda…

“Set Clear Goals.” He points out that “Clear goals channel our attention.” And, I might add, they help us to fulfill our real destiny in business and in life.

Finally, “Take Regular Breaks.” It’s not a competition, and as the author explains, “Rest is different than distraction – especially when we are intentional about it. Rest is not the enemy of productivity. It is a requirement for it.”

He goes on to say, “Controlling your attention may be the greatest skill of the 21st Century. And that’s good news. Because anyone can do it.”

I contend that Focus is the key to all Success & Fulfillment! Be on the watch for our upcoming Next Level Thinking™ workshops.  

Let’s take your business to the Next Level!