Tag Archive for: Goals

What is the Secret to More Positive Cash Flow?

After eight years in the banking industry and 26 years of consulting on finance & strategy with Success Strategies, Inc., I have concluded that achieving positive cash flows in your business revolves around several key items.

First, I absolutely believe that if you measure it, you will understand your cash flow far better. If you understand it, you can manage to get better control over it. Undoubtedly, if you gain better control over it, you will be positioned to improve it. While this set of principles may sound simple, it can be rather evasive at times. Additionally, you are constantly being faced with changing variables or factors that, sometimes, you were not expecting.

Regardless, all success in this arena begins with measuring your cash flow. We have a software tool for the dairy industry called the Success Strategies Advantage™. It will measure your financial results and provide you with a budget that is based upon your region of the country, i.e., the “Averages” of various Revenue sources & Costs per 100 pounds of milk. In a moment, I will explain what other tasks it can fulfill for you.

Second, you must know your Break-Even levels. In other words, what could you change on your multiple Revenues or Costs, while all other variables remain the same, and still not lose money. This is extremely valuable information to have at your fingertips. Why?

Well, if you are losing money, your Break-Even numbers will tell you what you need to change in order to stop losing money. Another approach would be to ask yourself, “What are potential items I can increase (on the Revenue side) or decrease (on the Expense side) to achieve a Break-Even level and, better yet, start making money!

I have had Client situations where we have literally boosted revenue and/or cut their costs $1.00-2.00/cwt, and the program clearly showed us where they were spending too much money, in comparison to other producers in their region of the country. Would that help your operation to be more profitable? Absolutely! It would in most businesses.

Using the program, you can also run some “What If” scenarios to measure the potential impact of adding more cows in your dairy herd, boosting their production per cow or adding new equipment or automation tools that can lead to lower costs. This knowledge can assist you to make better decisions. If you have a more solid grasp of what you are investing in and the potential impact of that item or variable, you can feel more confident about the choices you are making.

Hopefully this overview has been helpful to you. I would urge you to check out the Success Strategies Advantage™ software at www.success-strategies.com and start a free trial. It’s on our Home Page – just look for the Milk Cans.

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:

“Success… seems to be connected with action. Successful men keep moving. They make mistakes, but they don’t quit.”

Conrad Hilton, Entrepreneur

Let’s take your business to the Next Level!

How Can I Decide?

Ah, the art of decision making. It can be a genuine challenge today for several reasons. Sometimes, we have too much information. Often, we are afraid we might make a mistake (Oh, heavens…). In both cases, we can simply become overwhelmed and keep people from making much-needed decisions.

Here is my suggestion to you: Don’t delay! Realize that you have 9-10 other decisions to make today, and there will be more tomorrow. Having stated that fact, here is a process I like to use:

  • Determine the objective, i.e. where do I want to go?
  • Identify the challenges as much as possible.
  • How can I overcome these hurdles, knowing what we know today?
  • Consider what the best & worst outcomes could potentially be & can you live with them?
  • Choose your best option and “pull the trigger.”

Realize, of course, that none of us gets every decision correct, but as I said previously, you probably have 9-10 other decisions to make today. Deferring action to another day can often have other implications. Please allow me to share an example with you.

Six months ago, I had a dairy client who was completing an expansion of his operation. He had just added another free stall barn and needed to buy more cows to complete his growth process. Young cows were then $2,000 each, and he said “That’s ridiculous. I could have bought those last year for $1,500. I think I will wait.” Fast forward six months, and they are now at least $3,000, if you can even find any to buy… In hindsight, he could have bought them for $2,000 per head and then sold their calves for $600 each, netting his cost at $1,400 apiece, essentially less than ½ of today’s cost. He would also now be selling their milk at $22-23/cwt, rather than being short on his overall milk sales.

This is just one simple example, but it is a good one to illustrate why we cannot delay decisions. Everything keeps moving at such a rapid pace. How do you decide? Look at your goal, consider potential challenges, select what you believe is the best option (based on some market research, not just your neighbor’s opinion), and then pull the trigger!

Ultimately, have a plan, study your options and make it happen. No one ever built a statue for anyone who didn’t take action! 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’s go invent tomorrow rather than worrying about what happened yesterday.”

Steve Jobs, Apple Co-Founder

Let’s take your business to the Next Level!

How Would They Know?

In a recent interview in www.golf.com, Michael Phelps, the U.S. swimmer who won 23 Gold Medals, offered some great advice for business success. He said that one of his keys to success involved having one big goal and then breaking it into smaller steps. He feels it is important to establish this process & work through it consistently.

He also suggested that we need to avoid “over-thinking” this process. The best way to accomplish that is to only focus on the items that you can control. Another key benefit of this focus is that the key employees in your operation would be provided with their “next steps.”

If you died or were totally paralyzed in an accident tomorrow, would your Team know what to do next? My approach with Clients is to establish an Objectives & Challenges chart to clearly outline two items:

  • Your Top 3 Objectives this year.
  • Your 3 Biggest Challenges to overcome.

Once you’ve identified your Top 3 Objectives, work with your Team to identify the most prominent obstacles to each one, potential strategies, who will work on this and a deadline for its achievement. Then track your progress regularly. Are you getting closer to the goal? If yes, fantastic! If not, what needs to change?

On the 3 Biggest Challenges side of the equation, list the most optimal strategic response to these issues, who is best suited to implement those steps, and then establish a deadline for doing so.

If you would like a copy of the Objectives & Challenges format that I use with Clients, just email me a brief request for O&C Form. You can reach me at john@success-strategies.com.

Whether you use my format or one of your own, your results will undoubtedly be improved vs. simply going with the flow of life. As Carl Frederick stated:

“Knowing where you’re going is all you need to get there.”

Let’s take your business to the Next Level!

Are You Familiar with the Seven Laws of Success?



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!

What If We Changed Our Approach?

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!

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!

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!

Why Does It Take So Much Time?

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!