Tag Archive for: Goals
Peter Drucker once stated, “In cost control, an ounce of prevention is worth a pound of cure.” This has never been more true than it is today.
Since the joyous period of Covid and the intense & the extensive damage that it inflicted upon us, costs for many businesses have simply been out of control. How could this have happened?
Well, I would suggest that the damage stemmed from well-intentioned interventions. It suddenly came into vogue for our government to throw money at the challenge to keep our economy going. Initially, this helped as businesses struggled to keep their doors open (or add a drive through window…).
Unfortunately, their last $10 Trillion infusion pushed us over the edge, financially. The result was severe levels of inflation. While we have now been able to get this under control, as the saying goes, “the damage is already done.” Typically, once the price of various items goes up, they tend to not come back down. Who pays for this?
The end user or consumer, and it becomes a difficult cycle to manage. While you may already have solid cost controls in place within your business, we cannot afford to take our eyes off the goal.
Drucker cited a pharmaceutical company which, during a highly inflationary period from 1965-1995, grew almost eightfold, adjusted for inflation. They simultaneously held their cost increases to a fixed percentage of their increase in revenues. They controlled their costs by limiting the rise in costs to 6% for every 10% increase in revenues. After several years, they also strove to make sure that their costs went down in the same proportion as their sales decreased in any down periods.
Not to oversimplify this process, but begin by asking yourself the following question: “If my sales were to decrease by 10% this year, where can I decrease my costs to offset this, without impacting the productivity of my operation?”
It is only a start, but it can be the beginning point for vastly improved profits. If you need assistance with this process, please let me know.
“I am not a product of my circumstances. I am a product of my decisions.”
Stephen Covey
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
As you begin a new year with your dairy operation, this is a new game where the score is 0-0. You haven’t won yet, but I’d like to remind you – you haven’t lost either. However, consider the following. Many people are busy doing very proactive tasks on their dairy, but do they really know if these steps are working?
To know this, you need a scoreboard. That scoreboard is a Financial Statement. Your CPA can produce a masterpiece Financial Statement once, twice or even four times per year, but a lot can happen between those periods. That is why you need to track your results every month. Allow me to introduce the Success Strategies Advantage™ software.
- Do you know how you did financially last year? This program can tell you.
- How did your results compare with others in your region? It will compare your results with your region’s averages.
- Have you developed a Budget for this year yet? The program can assist you with this process, too.
- Do you know your Break-Even levels for Milk Price, Production/Cow/Day & Feed Costs?
If not, it is time to get the advantage, more specifically, the Success Strategies Advantage™! Regardless of where you are located in the U.S., the system will create a budget for you, and after you type in about 20 Revenue & Cost numbers, it will give a Financial Comparison and point out where you may need to make some adjustments in your business.
It will also, as I said above, generate your Break-Even levels to guide you in making changes that result in better profits. One other benefit of this program lies with its ability to run “What If” scenarios. For example, if you want to automate some tasks on your dairy, you need to know if it will pay off. To learn this, you would simply add the monthly payment for that new equipment into the program and then change other expenses, such as labor savings, that you would expect to achieve with this new automation. This will then give you a good idea of whether the investment will pay off for you and avoid the process of buying equipment and then being disappointed on its payback…
What is the Next Step for you? I would suggest you check it out at www.success-strategies.com and look for the Milk Cans & the video right below them. You can even get a free 30-day trial. Consider the following advice:
“Change can be tough. But the only alternative is eventual obsolescence.”
Michael Hyatt
Let’s take your business to the Next Level!
As we begin a new year, I believe it is crucial that we identify what our primary objectives are for the coming 12 months. I understand that the challenges of inflation, higher interest rates and general over-regulation of most industries today have helped to create a sense of malaise.
However, in the words of Greco-Roman Philosopher Epictetus:
“The more we value things outside our control, the less control we have.”
In other words, focusing on these items can create a sense of helplessness. This is a myth. You have more control over your outcomes than you give yourself credit for. While all of these variables can impact your results to some extent, you have the ability to boost your outcome.
You can control your results, and it helps to have a plan. Can you control every step? Of course not, but once you have set your objective, decide what your first step will be.
And isn’t this a great time of year to start outlining your objectives for the year?
Along with your first step, identify the potential challenges you will face and what your response will be to each one. Be sure to get your Team involved as you lay out the plan. Their support will be instrumental to your success.
Then, as you move forward, start to identify each of your next steps and refine your plan accordingly. Ultimately, the combination of your belief and a sound planning process will assist you to “Make It Happen!”
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:
“A good plan is like a roadmap: it shows the final destination and usually marks the best way to get there…”
H. Stanley Judd
Let’s take your business to the Next Level!
What are the qualities of a Visionary Entrepreneur? This was the leading question asked at my most recent Strategic Coach workshop. It is actually an interesting and thought-provoking question.
Some of the answers that participants offered were “the ability to see future opportunities, an ability to plan the future, and using your imagination to think about the future.” These are all great answers. The Oxford Dictionaries describes visionary as “the ability to think or plan the future with imagination or wisdom.”
As we start a new year, what ideas do you have in mind to dramatically improve your current operation? Are there areas in your current operation that should be boosted? If so, what will be required to achieve this level of improvement? Does it require an investment in people, equipment or other items? Start by listing these necessities and then consider their level of payback. Does the required investment make sense for you?
On the other hand, would you be better off designing a completely new vision for the future? In either case, you need to see it, build it and articulate it to your Team and your Lender. Their feedback and support will prove invaluable to you.
As I have stated many times before, being visionary will require you to:
- Identify what, specifically, you want to achieve.
- Develop an outline of how you can best accomplish the desired result.
- Recognize the potential challenges you will face, and yes, there will be some.
- Formulate your strategy to overcome these challenges.
- Move forward with the first step and develop a system to track your progress.
- Adjust your course, as needed.
All of us are visionary, to some extent. The key to your success is developing your ideas, maintaining a system to measure your results and then adjusting your course as new challenges arise.
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 only limit to our realization of tomorrow will be our doubts of today.”
Franklin D. Roosevelt
Let’s take your business to the Next Level!
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!
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!
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!
Recently, I read an article by Joshua Becker entitled
“The Seven Laws of Success.”
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!
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