Tag Archive for: Goals

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!

Are You at the Top of Your Game?

This has been a challenging year for many people. I understand that our economy has been tough in some respects. Most costs are going through the roof, and you are likely having problems hiring the workers you need to grow your business. Some banks are being difficult to deal with, especially as they have their loan portfolios more closely scrutinized by their auditors.

One thing that we need to remember on these issues is that they are primarily items that we cannot completely control. With that in mind, I suggest that we shift our focus to items that we can control. Here are a few examples:

  • Business Productivity – Is your business running at peak efficiency? I have seen some business people operate their business in a total “cost cutting” mode, hoping that “when things get better, I’ll throttle my way back to full force.” Unfortunately, most businesses cannot turn up the production & efficiency activities overnight. On the contrary, they usually take some time to hit their peak results. Here is a better approach: Keep things running at their peak levels all the time! If you do, you won’t need to spend time playing “catch-up.” When prices go up, costs decrease or labor becomes more available, you will already be poised to seek new levels in your business.
  • Cost Controls – While you cannot possibly maintain 100% control over all your costs, you certainly can strive to keep them in line to a great extent. How? As I have stated many times, if you measure something, you can understand it. If you understand it, you can control it, and if you can control an item, you can certainly improve it. The same is true for your costs. The solution? Monitor them regularly, compare them with industry standards and make improvements where you can.
  • Measurements – Sometimes, I feel like people compare their businesses with neighbors far too often. The problem with this is that you and I really don’t know the specifics of their operation, its finances, or the amount of debt they might be carrying. A better comparison would be: How are you doing compared to last year, or even better yet, in comparison to your last three years? Are you moving forward or not? If not, what do you need to change?
  • Share your results & your future business plans with your banker. Scary thought? It shouldn’t be. I can think of two good reasons to regularly meet with your lender. You will definitely want to be prepared with good information, and it will also lead you to measure your results more often. These are both good things!

In any event, if you stay on your “A game,” you will be better prepared for two scenarios. First, you will likely be ready to play the survival game in a downturn. Additionally, as I mentioned above, in the event of a positive upturn in the economy, you will be poised for a quicker rebound and attain improved results without the need to suddenly “crank things up.”

Either way, be prepared to run your operation at 110%. I think you will be glad you did! Be on the watch for our upcoming Next Level Thinking™ workshops.  Let’s take your business to the Next Level!

Are You Suffering from Fear?

As we look around our society today and review our economy, with its rising interest rates and higher inflation, a lot of people are caught in a trap – one known as FEAR. Actually, it is an acronym for – False Expectations Appearing Real!

I’m sure you can relate, whether it’s the potential threat of your business partner wanting to be bought out during these challenging economic times, your vendors putting extra pressure on you to stay current or your banker commenting that his or her auditors are really scrutinizing their bank advance rates on lines of credit…

We probably all tend to overreact to these types of thoughts or comments, but I believe Author Marilyn Ferguson summed it up best when she stated:

“Ultimately we know deeply that the other side of every fear is freedom.”

So, what can we do when we run into fear? Realize, as my Business Coach Dan Sullivan, co-founder of the Strategic Coach organization, stated, “Obstacles are the raw material for your success.” Instead of running from these items that you fear, do the following:

First, Set Your Objective. Then, define your Why, the reason you absolutely must achieve this goal. Once you know your Why, as I’ve said previously, your How becomes much easier to identify. You can then list all the obstacles and determine ways to overcome them. This process will keep you moving forward toward your ultimate objective.

Please allow me to provide you with my own business start-up as an example. I didn’t make this change just for more money. That was simply one of the rewards for doing a good job with Clients.

I started by asking myself the question, “How can I do this?” Asking that question made the process more difficult. However, when I started focusing on my Why, positive things started to happen. I started by asking Why, and then realized that I wanted to run my own business. I was fatigued with the demands of Corporate America, and realized that if I didn’t start to set my own course, I’d be stranded on someone else’s agenda. I wanted the freedom to travel with my Family.

When I actually identified my Why, positive things started to happen. I landed Clients, found plenty of long, enjoyable work hours (which never hurt anyone), and discovered plenty of new opportunities to consult, speak and write about. Did I have any fears at the beginning? Of course, I did, but overcoming them by realizing that those fears, while possible, didn’t necessarily have to happen.

By identifying my Why, those fears got lost in the “rear view mirror,” and you can do the same exact thing with your fears, too!

Can I assist you with this process? Be on the watch for some upcoming Next Level Thinking™ workshops in the Fall.

Let’s take your business to the Next Level!

Are You Part of the New Cancel Culture?

During the past six months, I have noticed a new trend in the way people try to overcome the challenges they are facing in their businesses. They cancel previously scheduled meetings with their Nutritionist, CPA, Attorney or other Advisors. I think it can best be described as “ignoring the problem, hoping it will go away.” If you ever observe this scenario with a neighbor or your brother-in-law (assuming it never happens at your operation), here are a couple suggestions about how to overcome it.

Suggestion #1 – The challenges you face are not likely to go away if you ignore them. In fact, they could compound and become even more challenging.

Suggestion #2 – Cancelling one of these sessions, especially at the last minute, can throw your professional’s schedule off. My biggest concern is that if you urgently need them later, will they be in a position to step in, particularly on short notice? Will they even be motivated to do so?

As I suggested in my last blog, let’s focus instead on the Solutions, not just the problems. Along that same line, we should always remain open to meet, to learn, to develop new objectives and adjust our course as needed, because no one is immune to items changing.

This is all part of what I call “Working on the Business, Not Just in the Business!” It will lead us to complete the following tasks:

  • Answer the question of “What will your business look like in 10 years?”
  • Will you personally be fulfilling the same role or doing different tasks?
  • Who will your competitors be in the future? Sound silly? Consider the impact that products such as Almond Milk or Oat Milk may be having on dairy supplies. Will it become even greater in its future impact?
  • What obstacles do you see in the short term or over longer time periods? What’s the impact of higher inflation, rising interest rates, or increased industry regulations?
  • Keeping these factors in mind, have you begun developing a roadmap for overcoming these hurdles?
  • Are you pursuing your objectives or those of your banker, your industry or someone else? These are all key points to consider.

Can I assist you with this same process? If so, be on the watch for some upcoming Next Level Thinking™ workshops.

Let’s take your business to the Next Level!

Who Is This Guy?

As we wrap up the year, which has been a difficult one, I wanted to share with you a story of Howard Hill, perhaps the greatest archery performer ever. They say that, not only could he split an apple on the top of someone’s head successfully. He could split those halves a second time, and thank you, but “No, I’m not really interested in holding the apple…

I only tell you the story because as you wrap up you year, I want you set some, as Jim Collins calls them, BHAG’s, i.e. Big Hairy Audacious Goals!!! Make them big and challenging. The bigger the better!

  1. Define it clearly.
  2. Lay out the steps to get there.
  3. Determine who will be involved.
  4. Set a deadline for the completion of these steps.
  5. If you hit snags (Welcome to life…), adjust your course, as needed.
  6. Then, go forward, and “take no prisoners!”

As you prepare for next year, I want to state that you can hit your target better than Howard Hill. I’d just have to blind fold him & spin him around until he was dizzy & could barely see. I know what you are thinking. You’re saying, John, that just wouldn’t be fair. No one hit a target they cannot see…

And, you know what? You’d be absolutely correct. The same holds true for you. You cannot hit a goal that you cannot see! You have to literally “Go for it!” You may recall what I suggested in my last blog:

  1. Determine what you want to pursue now. Define it clearly in your mind. If you don’t, guess what. Another year could go by, and you’ll still fall short of that objective!
  2. What steps do YOU need to take? What is your first one?
  3. Who else can assist you with this process? Are they already on your Team, or is it someone from outside? Forget about “saving your way to prosperity.” The right person on some of these tasks will pay for themselves 5-10X over. Ask anyone who has ever been saved from the brink of financial disaster. They never considered the cost, just the potential benefit.
  4. When do you want to achieve this result?
  5. What will the “drivers” of this challenge need?

If I can assist you with this process, please contact me at john@success-strategies.com or 209-988-8960. Best Wishes for a joyous Holiday Season and continued prosperity in the coming year!

What Would You Do?

Put yourself in this situation. It’s been a tough year, accompanied by lower sales & a small financial loss. I know – some of you are thinking – like normal… I know it can be painful. In fact, when I worked in the banking industry, we had a term for that. It was called a SNAFU, which stood for “Situation Normal, All Fouled Up…” I have a suggestion for you.

As you wrap up 2020, perhaps it’s time for a serious review of your accomplishments, e.g. what went well, what could have been better, and, perhaps most significantly, where can we improve?

First, what went right? What steps did you take & why do you feel it went so positively? When you know the answer to these questions, you have established the foundation for even greater success. How can you build upon it? Is it something that you will be able to repeat? If not, why not? Are you sure of this? If it worked in 2020, it could very well work going forward. Maybe you just need to make some adjustments & make it happen!

Next, what are the areas within which you fell short, and, once again, why? Was it due to the COVID pandemic, the economy or other items beyond your control? Was it due to poor or limited planning? Was it planned okay, but poorly executed? Please don’t take the answers to these questions lightly. Your future success might be dependent upon these very answers…

Finally, what are the areas that you feel you can do better on? More importantly, how? Here are some steps you can take to reach your objective(s):

  1. Determine what you want to pursue now. Define it clearly in your mind. If you don’t, guess what. Another year could go by, and you’ll still fall short of that objective!
  2. What steps do YOU need to take? What is your first one?
  3. Who else can assist you with this process? Are they already on your Team, or is it someone from outside? Forget about “saving your way to prosperity.” The right person on some of these tasks will pay for themselves 5-10X over. Ask anyone who has ever been saved from the brink of financial disaster. They never considered the cost, just the potential benefit.
  4. When do you want to achieve this result?
  5. What will the “drivers” of this challenge need?

If you can truthfully answer these five questions, you will undoubtedly position yourself for a stronger finish. If you take the time to complete this process, I’ll look forward to seeing you at the “Finish Line!” If I can assist you with this process, please contact me at john@success-strategies.com or 209-988-8960. Best Wishes for a joyous Holiday Season and continued prosperity in the coming year!