Tag Archive for: Planning

What is Your Mission This Year?

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!

Are You a Visionary Entrepreneur?

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!

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 Is Your Next Step?

I recently completed a Keynote Address at the Amelicor Corporation’s DHIA Conference in Las Vegas entitled “The Three Pillars of Financial Success.” It was a great conference.

In my presentation, I reviewed what I feel are the three most essential items to your business success as you move forward:

  • Protect the Balance Sheet – Our primary objective here is to build your Working Capital (Current Assets – Current Liabilities). This can give you lots of options, since it means you have or will have cash on hand. Further, if your Loan to Value %’s are in line (65% Herd Loan, < 100% on your Feed Line & no more than 65% LTV on your Real Estate Loans), you have opportunities, if needed, to restructure your debt obligations.
  • Build Your Banking Relationship – Finding and keeping a strong banking team around you is getting more & more difficult. The best way to do this is to maintain the same banker, and sometimes the best way to achieve this is by making his or her job easier. How can you do this? Provide them with monthly inventories, which is not that difficult if you are using feed programs like Easy Feed, Feed Watch or the many others available to you. Just complete a physical count 2X per year to ensure that your numbers are accurate. Also, share your Year-to-Date monthly Cash Flows with the bank & then verify your results with CPA Prepared Financial Statements to let them know how you are doing and to assist them when you need some help.
  • Guard Your Cash Flow – Why would you want to do this? Let me give you five good reasons. First, you will feel more in control, which is far better than feeling out of control… Second, if you measure it, you will understand it. If you understand it, you can control it better, and if you can control it, you can improve it. Third, if you take this seriously, you will get enthused and start to think “Why ever have a negative cash flow?” Fourth, you can discuss these results with your Team and evaluate what you can do to make results even better, because they want you to succeed. Finally, you can discuss this with your vendors. They, too, want you to succeed. In fact, they need you to succeed.

So, what is next for you?

Do you want to expand your operation? You will need all three of these items to acquire the financing you need. Are you positioning yourself for a sale? Focus on the first one, strengthening your Balance Sheet. Would you like to hold and simply boost your efficiencies? Look at all three pillars and decide what steps you should take to make the improvements you want, going forward.

Regardless of your choice, all three pillars can make the difference between reaching you objectives or falling short of your goal.

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:

“There ought to be ways of reforming a business, other than by merely putting more money into it.”

Winston Churchill

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!

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!

How Do You Spell Relief?

The last few years have been fairly challenging in terms of inflation, the resulting higher interest rates, considerably higher operating costs and only average revenue streams to offset these higher expenses. It’s been a classic “Cash Flow Squeeze.” I imagine that the sales of Rolaids are higher as a result…

While this has been challenging, we need to set a course of action that will be beneficial to you and your business. As prices received start to rebound and some costs begin to decrease, it’s crucial that we put a plan in place. Here are five suggestions:

  • Talk with your vendors about price relief or better payment terms. Remember, they only thrive if you survive. Customers going out of business are of no help to any vendor. Their policies, while they may seem tough, were put in place because of customers who went broke &, hence, left the vendor unpaid. The same policies were not necessarily set up for you, so communicate with your supplier.
  • Build your banking relationship through better reporting, closer monitoring of your cash flows and then communicating with your loan officer, rather than surprising them with unwelcome news at the last moment.
  • Diversify your operations when it makes sense. I know, someone is going to say that they diversified their operation by adding almond & walnut orchards to their dairy, and now they are all hurting. However, you must admit that this scenario is rather unusual. They will bounce back. Methane production may fit your dairy facility, positioning you to take advantage of the growing demand for energy.
  • Is expansion the answer? Greater efficiencies and economies of scale can be positive factors as your industry rebounds.
  • Are you following the advice of your CPA, your Attorney or other Consultants you use? Why pay for their advice and then do nothing? I believe that is the definition of insanity – doing nothing and then expecting different results.

This brief list provides you with several ways 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:

“Everyone who got where he is had to begin where he was.”

Richard L. Evans

Let’s take your business to the Next Level!

,

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!

Are You Caught in the Great Meltdown?

Recently, I was reading a book by my Business Coach Dan Sullivan entitled The Great Meltdown. In it, Dan describes how our entire world is experiencing a “meltdown” in which bad news of high costs of Money, Energy, Labor and Transport (MELT) are wreaking havoc on many operations’ results.

Dan states that “the costs of MELT determine economic growth and progress or decline and collapse. Their combined, interactive costs are one simple, helpful indicator of the direction of economic performance in any market or industry. In short, when the cost of the four MELT factors goes up, progress goes down.”

He goes on to say that “when the MELT costs rise, there’s a dramatic separation between people’s circumstances.”

With that factor in mind, what’s your plan? As bank financing gets tighter (and more expensive, what are your options?

  • If borrowing Money becomes more challenging, can you shift some of your short-term loans onto longer term assets such as real estate? Loans with a longer amortization period can help immensely with your cash flows, by lowering your monthly payments.
  • Energy has become more expensive for all businesses. Part of this has been caused by government restrictions on oil exploration in the U.S., and part of the increase is a result of the transition, successful or not, to new forms of “green energy.”
  • On Labor, we all know that the cost is increasing (just to keep up with inflation), but what about productivity? Are we making gains there? The cost per hour is unlikely to drop in the short term, so unless the “productivity” per hour jumps, we will be faced with some genuine problems…
  • The cost of all Transport has been rising as result of both the Energy & Labor costs climbing. This has become clearer as we require 5 days to simply deliver a letter that used to arrive in two days and as we observe that the time & costs of getting equipment parts has grown considerably.

As you consider these challenges, do you have a plan for overcoming them? This is not a task that can be overcome in one meeting. However, I do believe that if you measure these items, you can better understand them. If you understand them, you can undoubtedly gain more control over them, and if you can start to control them, you will be able to improve them.

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, and please consider the following advice:

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

Winston Churchill

Let’s take your business to the Next Level!