Tag Archive for: Success Comebacks

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!

Are You Facing Adversity?

Lots of people are facing challenges today. Some of these are financial, and some are managerial. They are asking what they can do & why things do not work – they used to. The challenges of these times are not for the faint of heart.

However, it is time to grasp reality and realize that we are not going back to the “old normal…” On the contrary, things are changing so fast, especially with the recent introduction of Ai, we must learn to respond & act more quickly. As I recall when I became a green belt in Taekwondo in the early 1980’s and started training with black belts, my instructor yelled, “Mr. Ellsworth, you are in with the big boys now. You must kick faster!”

It turned out that this was good advice. The same applies to us today. There is no time to meander. As they said in Alice in Wonderland, “If you don’t know where you are going, any road will get you there.” However, you are better than that. You do know where you want to go. You must simply define it.

Determine what your desired destination will be, because the prize ultimately goes to “the decided.” Take the following steps:

  • Define your goal clearly in your mind & write it down.
  • Now the fun begins – you will face obstacles. My Business Coach Dan Sullivan says these are the raw material for your success. Identify them and discuss them with your Team.
  • Determine how you can overcome them. Again, outline these steps with your Team.
  • Establish dates for their completion.
  • Go forward, adjust course if necessary & win!

If you need assistance, you can reach me at john@success-strategies.com, and consider the following advice:

“Keeping a little ahead of conditions is one of the secrets of business…”

Charles M. Schwab

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!

Where Do We Go from Here?

If you are running a dairy operation this year, your Cash Flows are probably suffering. Most dairies are struggling with cash flow. If you are not, be thankful. You are truly living a charmed life right now.

As we look at this year’s cash flow challenges, I believe it is worth repeating that if you measure something, you can understand it better. If you understand it, you can control it. And, finally, if you can control it, you can improve it. The same is true for cash flow.

After measuring Cash Flow Results for my clients for almost 18 years, we have noted that all costs are higher, but their Revenues are also higher, providing them with almost identical Operating Margin per cwt. How could this have happened?

I believe the most obvious reason is that they have studied the consistently higher costs of operations, and then made a concerted effort to diversify and create additional sources of business revenue. Have I piqued your interest yet?

I hope so, because if you run a dairy of any size, you can improve your cash flow results, even in a year like this, where inflation has had a horrendous impact on costs and feed costs are elevated.

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.

It will also measure your actual results against this budget and illustrate where you should focus to make additional improvements, i.e. the areas where you are “over budget.” It will also provide you with crucial Break-Even levels for production per cow per day, feed costs per cow per day, milk price per cwt, and feed costs per cwt. These items can be crucial in setting your Price Levels in the Dairy Revenue Protection or Dairy Margin Coverage programs. I want to help you improve the Net Cash Flow of your operation.

Please check out the Success Strategies Advantage™ software today at www.success-strategies.com today.

Let’s take your business to the Next Level!

Do You Know Who I Am?

No, I am not Darth Vader, but I really believe this is a good question for each of us to ask ourselves. I recently listened to a speech by Matthew McConaughey, also known as the speech that broke the internet, where he explained that knowing who we are begins with knowing who we are not.

If you haven’t heard that speech, I highly recommend you listen to it. I find it very motivational. However, what does he mean? Please allow me to provide you with a couple examples.

I had a Client several years ago who sold his dairy operation. He had children, but none were interested in running the dairy. One was an outstanding Doctor, and the other child was a very successful Accountant. He was the third generation on the operation and had done very well. Unfortunately, he felt ashamed because he had no children to take over for him. Following extensive discussions, I reminded him of how well he had done, how successful his two sons were, and how he had continued his family’s legacy for a third generation, at a time when dairying was no easy task. In essence, to convince him that he was, indeed, a success story, he needed to recognize what he was not – someone who would live forever – because no one can do that.

I had another Client whose banker convinced him that he should diversify his operations. He was a lifelong dairyman, but he became convinced that he should diversify into almonds, too. On the surface, it sounded good. Almonds were bringing $3/pound. What could possibly go wrong?

Well, over the next five years, development costs soared from $6,000/acre to $12,000/acre. Operating costs skyrocketed and, magically, the $3/pound price dropped to $1.80. Oh, and did I mention that the Federal Reserve Board ratcheted interest rates up by over 5%? His stress levels jumped dramatically. He had done a great job of diversifying, but he was simply tired of the worry associated with the higher debt levels and soft returns.

Effectively, he began to realize identifying whom he was began with recognizing who he was not. He was not one to deal with the stress associated with higher debt levels and lower margins. He divested part of the almond property and got himself back on track.

What items do you need to consider as you recognize who you are by first identifying whom you are not? I wish you well with this crucial process.

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!

What Makes You Think You Can?

It was a question that caught me off guard… Much as I wanted to respond with a “rapid fire” answer, it caught me by surprise. However, when I thought more about it later that same day, I concluded that it was a great question.

At the risk of catching you off guard or raising your blood pressure, what makes you think you can succeed? Henry Ford stated, “If you think you can or think you can’t, you are correct!” I have found that to be so true during the past 25 years of consulting.

I have been reading an excellent book co-authored by Dan Sullivan of The Strategic Coach and Dr. Benjamin Hardy entitled 10X Is Easier Than 2X. It discusses the process and benefits of growing your business 10X and why it is easier than growing 2X. The primary reason for this is that there are probably 10-12 different ways to grow it 2X. However, there are very few ways to grow it 10X, so you need to maintain total focus. One of the primary forces for achieving this is that you MUST eliminate any tasks that take you away from your primary goal of growing 10X.

It doesn’t necessarily mean that the task(s) do not get completed. It just means that it may need to be done by someone else. In other words, you may need to delegate the task to someone else on your Team. The example they used to explain this was Michelangelo’s creation of a 17-foot Hercules statue early in his career from a large piece of marble. The way he completed this task was by extensively studying the human body and then “chipping away” at all the unnecessary marble.

In your case, it might mean that you need to seek another “Who” to complete the task. I often hear business owners state, “I hate doing this task, so who else would ever want to do it? How could I ask them to do it?” The reality is that someone else on your Team might enjoy it and take great pride in making this happen. This might even align with their “Unique Ability.” Delegating this task will allow you to focus on more important items to help you grow your operation.

As I mentioned in my last blog, I am introducing 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. After you input some “Actual” numbers from your QuickBooks or other accounting system, it 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

Finally, it will give you solid information to share with your banker, showing how you are currently doing and guiding you about future changes or investments that will help you streamline operations. You can check it out on our home page at www.success-strategies.com.

I believe you will find it beneficial, because as Robert Noyce, co-founder of Intel stated, “Knowledge is power. Knowledge shared is power multiplied.”

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!

What to do in Tough Times?

I recently listened to an excellent podcast from motivational speaker Brendon Burchard about how to deal with “tough times.” Life in America has historically been good, but I know many people are concerned about things like inflation, rising interest rates, government decisions and, of course, the rising stress levels associated with all of these challenges.

Here some solid suggestions from Brendon on how to deal with these challenges, especially since we don’t always know when they might arise:

  1. Raise Your Ambition Level – This is a key element of being on your “A” game, essentially “showing up!” I believe that when we actually raise our ambition level, we become more focused and benefit from additional clarity. While your competitors or those providing you with this “challenge” are still developing their game plan, you can be one or two steps ahead of them, already having considered numerous “What If?” scenarios. Many challenges come from bureaucrats, and I have found that they hate nothing more than someone who is “prepared for them…”
  2. Reframe Doubt – Brendon emphasizes that we need to overcome pessimism. As he states, “Doubt is calling you to rise, not stopping you!” Everyone has doubts. This is normal, so take a closer look at the situation and consider how you might handle it differently than just having doubts. For example, if you were having success in this situation, what would have to have happened? Trust me. The more you practice this process, the more it will become natural for you and the more you will meet with greater success levels.
  3. Reset Your Habits – Challenges like we are facing today require us to boost our Daily Focus. Just as I wrote in my prior blog, better habits and increased discipline will take you a long way toward achieving your objectives. Again, the best way to overcome bureaucratic obstacles is to succeed in spite of them. That, my friends, will take you to the Next Level!

What challenges are you facing today? Here are my recommendations:

  1. Rest up, if necessary, and then Show Up! Face the challenges head on. You can overcome them!
  2. Doubts are normal. What to do? Think your game plan through and move forward. That’s what progress is all about.
  3. Focus – As Mr. Miyagi said in “The Karate Kid” movies, “Focus, Daniel son, Focus!” This is always good advice and something we should strive to implement.

You will likely find new solutions, refine your processes and make additional, positive improvements. I’ll look forward to seeing you at the finish line!

Let’s take your business to the Next Level!

Are You Prepared to Not Blink?

In a recent interview before their playoff game with the Kansas City Chiefs, Mike Tomlin, Head Coach of the Pittsburgh Steelers, was adamant about what it would it take to beat the Chiefs at Arrowhead Stadium. He stated:

“Don’t blink. If you’re a blinker, cut your eyelids off. This is not gonna be for the faint of heart. We understand what type of game we’re in. It’s gonna take a ridiculous effort and 60 minutes of it. And we’re excited about it.”

As a Chiefs fan, I’m happy that the Chiefs won the game very handily, but the main point is this. Aren’t you and I in the same position in our respective industries? We cannot afford to blink today, can we?

If you are running a dairy operation, your feed costs are higher at present. If you are a grower who is selling these higher priced feeds, your year may seem “easier,” but you have to be thinking way ahead about upcoming taxes and other challenges. All businesses today are being slammed with higher costs, simply due to inflation and the recent supply chain challenges. My goodness. It practically costs $200 just to have someone look at a simple repair anymore, that is if you can find someone to look at your necessary repair(s)…

If you are buying or selling assets, decide what you want to pay or are willing to take, in the case of a potential sale, and then don’t look back. Don’t blink!

If you are negotiating with a bank, never blink. Instead, have a well laid out plan, know your pluses & minuses (what’s fairly sure & what’s uncertain), and then act accordingly to implement your plan. If I ever blinked with a bank, I’d never be able to complete “business turnarounds” successfully. I can think of two specific cases in the last three years where the bankers were insistent that my Clients should start selling assets. I totally disagreed.

In both cases, I was proven correct over time. Did it happen overnight? No. However, it did not take long before my projections came to fruition. Yet, I had to hold the course, just like Gimli in the Lord of the Rings movies, who said, “Certainty of death, small chance of success. What are we waiting for?” There was no “blinking” allowed.

In both cases, these Clients are now well positioned for added success. Yes, they had “dug a financial hole,” but they were also very willing to change course. Of course, the best way to get out of any hole is to stop digging! To their credit, these operations are now both on track with sound cash flows, rising prices they are receiving, outstanding productivity and finally some diversification plans in place. They have a bright future.

So, think about the question above: Are you prepared to not blink?

Let’s take your business to the Next Level!

Are You Drowning or Climbing Out?

During the last 23 years of my consulting work, there have been times when my life has seemed like a cross between two of my favorite movies, Catch Me If You Can and Up In The Air. Here’s a quote from the Actor Christopher Walken in Catch Me If You Can that I believe you will find appropriate for our discussion that follows:

  • “Two little mice fell in a bucket of cream. The first mouse quickly gave up and drowned. The second mouse, wouldn’t quit. He struggled so hard that eventually he churned that cream into butter and crawled out. Gentlemen, as of this moment, I am that second mouse.”

My question for you is this: As you face industry challenges or ones that are specific to your operation, which one are you?

I’ve been called crazy for doing some of the work that I’ve completed these past 23 years, but you know what? I love doing this work. Is it challenging and occasionally frustrating? Yes. Can it be difficult at times? Yes, but if it was easy, everyone would be doing it and take all of the profit out of the process.

How do I do this? I recently reviewed my records and discovered that I’ve completed 73 financial turnarounds with Clients since 1999. That’s a lot of change! Some of these rescue missions have taken 1-2 years; others have taken 5 years or more. Some of them, following their financial recovery, decided it was time to exit their industry. The great thing on these was that they were positioned to sell out and walk away with sufficient proceeds to live the rest of their lives successfully. That news helps me to sleep at night.

So where are you in your current operation? Many industries, especially on dairies today, are facing some dire outlooks, but it doesn’t have to be that way. As the saying goes, “The best time to plant an oak tree was 20 years ago.” However, the next best time is today.

Here are some thoughts for you as you think about this question of what should happen next:

  1. Begin with what I call the Discovery Process. Where do you want to go and Why? If you can answer these two questions, step #2 is easier.
  2. Complete an analysis of where you are today, in terms of assets, debts and overall cash flows. This information provides the building blocks for your success plan.
  3. Outline and discuss the challenges that you will face in your next steps. My next blog will be focusing on just that topic.
  4. Evaluate what Cash Flows will be required to make it all happen successfully.
  5. Talk to your banker. Please don’t tell me this is too tough… I’ve faced off with large banks where the Client owed $6 million and had almost no collateral. What could we do? We simply built a repayment plan and worked through it successfully. The one thing I knew going in was that there was a solution. They just hadn’t identified it. If they had, my input wouldn’t have been needed. My saying that I was sure there was a solution may sound arrogant to you, but trust me. After you’ve completed 73 of these turnarounds, you start to understand that the answer, indeed, is out there. We just have to dig it up!
  6. Once you determine your plan of action, track your Cash Flows and always know where you are throughout the year. I treat CF Analysis the same as MacDonald’s founder Ray Kroc did the hamburger. Recall what he said? “I didn’t invent the hamburger. I just took it more seriously than anyone else.” It’s the same for me with Cash Flow Analysis!

Once again, are you drowning or climbing out of the bucket of cream? If I can assist you, please let me know. I’m happy to help.

Let’s take your business to the Next Level!