Tag Archive for: Success Comebacks

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!

Have You Ever Considered Firing Yourself?

I recall a fantastic book by author Harvey Mackay entitled We Got Fired! – And It’s the Best Thing That Ever Happened to Us back in 2004. While his book focused on celebrities like Baseball Manager Joe Torre, Governor Jesse Ventura, TV Host Larry King and former Notre Dame Football Coach Lou Holtz, I believe there are some applicable lessons for each of us in our businesses.

Each of these individuals had been fired at some point in their careers, but they also were able to “bounce back” and take their leadership roles to new levels. While I’m fairly certain that none of them had immediate financial concerns, I think it’s important that we zero in on what else they had in common with us, in the event that the same thing happened to us.

They all claimed that this event was the best thing that ever happened to them. While they had regrets about losing their jobs and the paychecks that went with them, they also realized that it was not the end of the world if they used this as a learning experience. They focused on three questions:

  • Where did I go wrong?
  • Was I actually “off track?”
  • How can I do better, moving forward?

Now, let’s take this concept one step further. Can you apply these lessons before you got fired?

Let’s pretend you are getting fired from your current role. Kind of a scary thought, isn’t it? Regardless of whether you are operating a dairy, a vineyard, a service business or a bank, what “justification” could your “Board of Directors” find to justify letting you go? What are the areas where you could do better?

Yes, I know it’s “tough out there,” and we all have a million excuses for why our business wasn’t more profitable, but as the saying goes, “When the going gets tough, the tough get going!”

What areas do you need to improve in your business? Is it management of your labor force to boost efficiencies? Remember that employees need some development programs, too. Are you working with them to educate them & boost their efficiency levels? Recall my prior conversation with a bank manager who claimed there was nothing worse than spending money on training people and having them leave for other jobs. I’d assured him there was one worse outcome – that was not training them & having them stay!

Do you need to improve on cost controls? If you measure it, you can understand it. If you understand it, you can control it. If you can control it, you can improve it. This is true for Cash Flow and Cost Controls, too. However, if you look back several lines, you’ll note that the key was to measure it. I’ve been doing that with Clients for 22+ years, and it pays huge dividends!

What about development of your company’s future direction? Many factors are changing, so are you staying on top of these changes? Does additional automation have a place in your operation?

The ultimate key is to turn over as many stones as necessary to make sure you understand the following points. Why do we do a task this way? Is it because it’s the most efficient approach, or is it because we’ve always done it this way? Should we change?

I recommend that you undertake this “thinking process” without the pain of actually experiencing being fired. Take a moment and ask yourself, “If I was being fired, what specific reasons could they use against me?” If you are willing to complete this task, you will have identified the areas upon which you should focus your “improvement programs.” Better yet, you will be headed to higher levels of success, without the pain.

Want to learn more? I’d like to invite you to join me for our upcoming Next Level Thinking™ workshops later this year, within which, I’ll continue to focus on the benefits of this type of proactive thinking. We’ll be doing portions of this process through Zoom Group Sessions, with monthly follow-up calls on an individual basis. Watch our website for more details.