Tag Archive for: Future Strategy

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 Perfect Came Along?

I have recently met with a number of bankers about refinancing one of my Clients. One of them said the deal was too big for them to finance alone, another one said the deal was too small for his bank, and a third one said the industry was too challenging for him today.

Wow! I felt like I was trapped in a Twilight Zone sequel to Goldilocks & the Three Bears! You know: the porridge was too hot, too cold; the bed was too hard, too soft… I understand that parts of our economy are quite messed up right now, and I hope we all remember that in November…

However, we need to balance the risk & return equation. As I have said previously, if the proposal is completely risk free, there is normally little or no return. Why would any bank want to finance a deal with no return? I’d suggest that we look at the potential risks and determine if we have enough mitigating factors to offset that same risk.

Otherwise, lenders, looking for the “perfect deal” could end up like the gentlemen who was looking for the “perfect wife.” He searched and searched for years, and at long last, he finally found her. There was just one problem. She wasn’t looking for him… The same could be true in lending relationships.

I believe it would be far better to complete the necessary analysis and due diligence to see if we can find those mitigating factors to offset the potential risks. Some examples include: a.) Hedging on the Client’s selling prices, such as DRP & DMC for dairies. b.) Contracted prices on many of their inputs, such as feed or fuel. c.) Fixed interest rates, when appropriate. d.) Does the borrower have a plan for success? e.) Do they have  a system in place to measure their monthly cash flow results? f.) Are they planning to grow their business in order to become more efficient?

Life goes on, and I will keep searching for the most optimal lender for this Client. Who knows? Maybe I’ll be like Goldilocks and find the one that is “just right.” By the way, if you run a dairy operation and want an easier way to track your cash flows, check out our Success Strategies Advantage™ software today at www.success-strategies.com.

Let’s take your business to the Next Level!

Have You Made This Change Yet?

So many people seem to be on a “treadmill” today. Occasionally, I feel that way, too, especially the last three years. I’d suggest what I believe has directly caused this, but you might accuse me of being “too political.”

Perhaps a better approach might be to follow the advice of the January 24th article in Inc magazine by Marcel Schwantes entitled “Science Says Your Overall Happiness Comes Down to 3 Timeless Strategies.”

The article goes on to say that “Happiness will enhance your health, improve your focus, and improve your job performance.” Sounds good so far…

What are the three strategies the author outlines?

First, “schedule downtime.” In the technology dominated culture we live in, it’s very challenging to “get away.” We are always on call… Schwantes suggests that every 80-120 minutes we should schedule ten minutes of down time i.e. a break. Some even suggest that you leave some “time gaps” in your daily schedule – GASP!!! I used to despise these gaps when they occurred, but then I started to realize that they help me to catch up, compose myself and get better prepared for the next event or meeting.

Next, “reward yourself by giving.” Sounds crazy, doesn’t it? Schwantes states that “the emotional rewards of giving are more significant when giving is connected to others.” If you make an anonymous donation, it will be less fulfilling than giving funds to a “cancer- stricken friend’s GoFundMe Campaign.” This social connection will provide you with a boost of happiness.

Third, “shift your mind toward optimism.” Remember, that it’s always darkest right before the dawn. These are stressful times we are living in, so it’s more essential than ever to be optimistic and set future goals for yourself. Change is always scary, simply because it is unknown. I met with a banker recently about a Client’s financial challenges and had to remind myself that this same loan officer has “predicted 5 of the last 2 recessions…”

No, that was not a typo. He worried about way too many items. He literally would not provide them with the funds they needed today, despite their $1.5 million in profits from 2020-2022. His reasoning? “I’m concerned about 2023 results now.”

In summary, life goes on, and we will figure it out. I’m looking at this as an opportunity to follow these three steps and boost the happiness of both my Client and me. Let’s go out and make it a great year!

Let’s take your business to the Next Level!

Where Does This End?

We are currently facing some real financial challenges in our country and, more specifically, in the dairy industry… It seems as if many economic events are completely out of control.

Inflation has been raging at the highest levels since the early 1980’s, and many suppliers are using this as an excuse to raise prices dramatically, an action they have been unable to do for many years. As a result, it costs $500 just for someone to show up and evaluate what the problem is with your piece of equipment, let alone provide you with a solution.

Will these costs ever go down? This is not likely, as evidenced by the last bout of inflation in the early 1980’s. All of this calamity has been compounded by the Federal Reserve Board raising interest rates extensively the past 24 months, in an effort to reduce the inflationary impact. Since they were relatively “late to the game,” their impact has been one of potential over-correction and has hurt all borrowers. This includes many businesses.

What can you do? If you are running a dairy operation today, you must prepare a Budget and monitor it relentlessly. If you aren’t doing this regularly, you could fall behind.

What if I prepared this budget for you? Would that help? Our Success Strategies Advantage™ software is designed to take the pain out of this process. I would encourage you to look at it at www.success-strategies.com. When you get to the website, just look for the milk can. The program will be right there for you to explore. What can it do for you?

You can run various “What If” scenarios within it in order to figure out what various repayment schemes will work for you (15-, 20- or 25-year amortization periods). For each scenario, it also 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 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. Check it out at www.success-strategies.com.

And wait. I believe the Milk Futures were up again today. There’s hope!

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!

Do You Know Who I Am?

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!

Is This Sustainable?

This is likely a question many folks in the dairy industry are asking these days. In essence, how long can we make this work? Considering the lower milk prices, high feed prices these past 18 months, rising interest rates and our ridiculous rate of inflation, it really is a great question to ask. In fact, it’s an excellent question to be asked on every major decision.

Honestly, when I heard about sustainability in the past, my mind was immediately directed toward the environment and related issues. For example, if I heard about someone discharging material into a waterway, I knew that was not at all sustainable for others downstream.

However, it’s so much more today. If we add another 400-cow free stall barn at a cost of $700,000, that represents $1,750/cow of additional debt. Not a big deal. However, if I also need to go buy the 400 cows at $2,250 each, then we are adding $4,000 per cow of debt. That level can quickly become tenuous. Is that sustainable? Probably not, unless your pre-expansion operation was extremely low on debt.

What’s the solution? You just need to build a sound plan. Can you buy heifers ahead of time and feed them until they enter the milking herd? Can you build your herd numbers internally, using sexed semen on your existing herd? All of these decisions need to be considered several years ahead of the free stall construction.

We really need a plan on everything we do. You can start today by setting your objectives, determining your overall project cost, researching if you can finance it, and also figure out, as in our example above, how you can fill the barn with the 400 additional cows. Ultimately, however, you will need to project if it will cash flow.

To assist you with your 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. You can run various “What If” scenarios within it in order to figure out what various repayment schemes will work for you (15-, 20- or 25-year amortization periods). For each scenario, it also 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.

Check it out on our Home Page at www.success-strategies.com. Use it to build a sustainable plan and to streamline your operations. As I always say, “If you measure something, you can understand it. If you understand it, you will be better positioned to control it, and if you can control it, you can definitely improve it.

Let’s take your business to the Next Level!

What Makes You Think You Can?

It was a question that caught me off guard… Much as I wanted to respond with a “rapid fire” answer, it caught me by surprise. However, when I thought more about it later that same day, I concluded that it was a great question.

At the risk of catching you off guard or raising your blood pressure, what makes you think you can succeed? Henry Ford stated, “If you think you can or think you can’t, you are correct!” I have found that to be so true during the past 25 years of consulting.

I have been reading an excellent book co-authored by Dan Sullivan of The Strategic Coach and Dr. Benjamin Hardy entitled 10X Is Easier Than 2X. It discusses the process and benefits of growing your business 10X and why it is easier than growing 2X. The primary reason for this is that there are probably 10-12 different ways to grow it 2X. However, there are very few ways to grow it 10X, so you need to maintain total focus. One of the primary forces for achieving this is that you MUST eliminate any tasks that take you away from your primary goal of growing 10X.

It doesn’t necessarily mean that the task(s) do not get completed. It just means that it may need to be done by someone else. In other words, you may need to delegate the task to someone else on your Team. The example they used to explain this was Michelangelo’s creation of a 17-foot Hercules statue early in his career from a large piece of marble. The way he completed this task was by extensively studying the human body and then “chipping away” at all the unnecessary marble.

In your case, it might mean that you need to seek another “Who” to complete the task. I often hear business owners state, “I hate doing this task, so who else would ever want to do it? How could I ask them to do it?” The reality is that someone else on your Team might enjoy it and take great pride in making this happen. This might even align with their “Unique Ability.” Delegating this task will allow you to focus on more important items to help you grow your operation.

As I mentioned in my last blog, I am introducing 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 some “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. You can check it out on our home page at www.success-strategies.com.

I believe you will find it beneficial, because as Robert Noyce, co-founder of Intel stated, “Knowledge is power. Knowledge shared is power multiplied.”

Let’s take your business to the Next Level!

How Are You Handling Difficulty?

Are we facing some challenging times? Yes, of course. Are they impossible? No. I recently listened to a short video done by Kara Lawson, the Duke University Women’s Basketball Coach, during which she talked about handling the challenges of life. It’s entitled “Handle Hard Better” and does a great job of outlining what we must do to overcome the hurdles of life & business.

I believed she played for the late Pat Summit at the University of Tennessee during their long period of outstanding runs at the National Championship level. She understands the challenges of being a success. One approach she pointed out was that when obstacles arise, we can wait for things to just get easier. The problem is that they never get easier.

Often people will say, “If I can just get through this problem, everything will get easier.” However, as she explains, it doesn’t typically get easier, so a better approach will be for us to “handle hard better.”

In business, I hear people claim that after this economic downturn, this price adjustment or this bout of high inflation, life will get easier. No. What happens is that you learn to handle hard better through experience, training and hard work!

In her presentation, Lawson points out that we must complete several tasks:

  • We must make a “Mental Shift” and get past hard challenges. They are simply part of the game. Welcome to life!
  • As far as preparing for the future, she stated, “Any meaningful pursuit in life goes to people who handle hard well.”
  • A lot of people who want things to be less challenging can be seen waiting at the “Bus Stop for the Easy Bus to come.” The problem, as she points out, is that the “Easy Bus never comes!”
  • Finally, she encourages us to not get discouraged. Instead, accept the challenge of life success and “Handle Hard Better.” Great advice for all of us today & for the long term.

I hope you find this helpful and encouraging. If you want to listen to Kara Lawson’s three minute video, you can find it at:  

Handle Hard Better: https://now.strategiccoach.com/e/126981/channel-DukeWomen27sBasketball/4v2x1b/899141121?h=i4AavUmtpa2W_d0WuGZ9JiLJFCDGyZ_Zlxzsb7Xn_IY

I think you’ll be glad you did. Also, be on the watch for our upcoming Next Level Thinking™ workshops.  Let’s take your business to the Next Level!