Tag Archive for: Future

Is It Time to Reset?

I recently finished reading a new book by Dan Heath entitled Reset.  It is an excellent book, and I would highly recommend it. The book contains a tremendous amount of change management and outlines methods we can use to make huge improvements in our processes.

One area where I hear the most complaints from Clients is “Labor Challenges.” Heath points out that “there is no emergency, only choices.” The key to making improvements on labor or any other issue, he suggests, is to identify “Leverage Points & Restack Resources.”

In one business, for example, the management team was having difficulty with employee motivation. As a result, they shared a questionnaire with employees that asked four questions that they could answer anonymously:

·       What makes a good workday for you?

·       What makes you proud to work here?

·       When we are at our best, what does that look like?

·       What are any impediments to your performance?

Then, in response, the same management team addressed these issues quickly, especially the small ones. For example, the coffee machine did not always work properly. It was relatively low cost and got replaced right away. They leveraged this item (at a reasonably low cost, too).

Additionally, they put three clear, plastic boxes at the place where their employees exited at the end of their workday. One box had orange ping pong balls, one had white ping pong balls, and the third one was empty. As they left work, the employees were asked to put orange ping pong balls into the empty box if they had experienced a difficult or unreasonably challenging day with conditions that needed to improve. If their day was solid, they were requested to place a white ping pong ball into the empty box, likewise giving management some immediate feedback on the day.

If you think about it, this process was very practical and provides a good example of participative management by asking the employees: “What matters to you?” It identified leverage points that were important to the crew and allowed management to “restack resources,” often at very low cost, to create a better outcome.

Give this some consideration in your operation, and if I can assist you with this, please let me know.

“People often say that motivation doesn’t last. Well, neither does bathing – that’s why we recommend it daily.”

Zig Ziglar

Let’s take your business to the Next Level!

Is It Time to Go?

I recently had a conversation with a good friend of mine about having him start a new business. Of course, he was concerned about numerous items – recent events with Ai, continued concerns about inflation and high interest rates.

I suggested that he focus on what he wanted to achieve with his customers and, as the saying goes, not “let the smoke get in your eyes.” While the recent concerns about Ai are relevant, I cannot let that stop me from moving forward with my life and neither can you. In fact, the advent of Ai will likely assist many businesses to streamline their operations and become more efficient. Recent Ai events were probably a “wake up call” for the U.S. tech industry…

Now, regarding inflation and its effect on the Federal Reserve Board raising interest rates to slow down our economy, we have had inflation for a long time. Why do you think the “purchasing power” of the U.S. dollar has decreased so much over the last 50 years?

Instead of worrying about the impact of these forces, I suggested that he spend more time focusing on what he wanted to do for customers. Additionally, consider what he needed to get started. Let’s consider these outside forces and then focus on the positives of what he could offer.

In the book “Start Up Nation” authors Dan Senor and Saul Singer state that “Without start-ups, the average annual net employment growth rate (1980-2005) would actually have been negative. Economist Carl Schramm, president of the Kauffman Foundation, which analyzes entrepreneurial economics, told us that ‘for the United States to survive and continue its economic leadership in the world, we must see entrepreneurship as our central comparative advantage. Nothing else can give us the necessary leverage.’”

So, after shifting my friend’s focus, I suggested he consider the following. If he knew that he could not fail, what would he do? Once identified, that is where he is most likely to succeed.

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:

“The two most important days in your life are the day you were born and the day you find out why.”

Anonymous

Let’s take your business to the Next Level!

What Does Your Future Hold?

Whenever you stay in business for a long time, the day will arrive when you must consider, for many potentially different reasons, whether you wish to stay in the business or leave.

Many agricultural producers are in this situation today. It could be due to their advancing age, a recent lack of profitability, health concerns, high interest rates or a combination of these variables. The lack of available credit from banks is also putting pressure on producers, as most lenders continue to seek the perfect business to lend money to.

If you are faced with this situation, here is what you should do. Literally, get away and THINK. Your next step is a big decision, so you want to make sure you make a wise, well-informed choice. Despite what your first boss told you when you were 15 years old, it really is not a crime to get away and think…

Consider what you would do: 1.) If money was not a limiting factor. 2.) If you could operate your “dream business.” 3.) If you had all the financing and Family support you desired. Then consider if you possess the health, stamina and desire to move forward with your plan. Saying “Yes” or saying “No” are both acceptable answers. Just be certain that saying “No” isn’t just because you were scared to do so.

In the movie “The Art of Racing in the Rain,” the main character was hesitant to enter a car race, and his driving coach stated: “There is no shame in competing and then losing the race. There is only shame in not entering the race because you were afraid you might lose.” That is excellent advice for all of us.

One final point in considering whether you should stay in your current operation is to look at the tax implications with your Accountant or Tax Adviser. Please do not execute your plan without considering the tax implications, especially if you decide to completely exit your industry. Is it better to go now or after December 31st?

Once you know these implications, you can refine your plan for success. Additionally, if you continue your business, consider this thought. If you knew you could not fail, what is the next action you would take? Recognize that there will be obstacles. That’s why so few people run their own businesses. Overcoming hurdles is not something they want to deal with.

Be sure to set some deadlines for action and move forward. Today is an excellent time to establish your plan for the new year!

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:

“Let our advance worrying become advance thinking and planning.”

Winston Churchill

Let’s take your business to the Next Level!

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!