In a recent webcast, interactive polling allowed me to assess the biggest weakness of business IQ from the eyes of the lender. Agricultural lenders are wrapping up renewal season where they have analyzed and reviewed thousands of financial statements as well as conducted inspections and interacted with customers across all age groups and revenue demographics. What was the number one weakness that the lenders were observing?
Over one-third of the lenders indicated the greatest weakness was in the area of finances including the ability to put together financial statements, complete projections, and understand and interpret financial statements. High grain prices coupled with Uncle Sam's generous stimulus payments have led some producers to take the foot off the financial pedal and is a topic of conversation amongst many agricultural lenders. With inflating expenses, little or no action on trade policy, and extreme weather, one can quickly see how these results were enumerated in the polls by agricultural lenders.
Next on the list was operational efficiency, which includes knowing the cost of production and breakeven points. Having key performance indicators (KPIs) to monitor results were mentioned by the lenders as a tool to direct management energy in the business.
One big surprise from the poll was a lack of interpersonal skills. Some agricultural lenders comment that a producer has “gone silent,'' that they did not have time for interaction with the lender, or that they needed the money yesterday. Many lenders are indicating that there is a direct relationship between individual interpersonal skills, whether working within the business or with suppliers, and overall bottom-line success.
The decade of the 2020s will be one of interdependence rather than independence. The ability to work with productive people will be critical.
Source: Dr. David Kohl, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
Finally, you guessed it, marketing. A lack of marketing skills or a plan is perhaps the largest area of weakness. Again, squeezed margins and extreme volatility without government support payments will be the name of the game over the next few years.