The other day, I was conducting a seminar for producers with a former student who now operates several successful small businesses. We conducted a group exercise and asked each table to identify themes and questions that they wanted us to address.
One response was very intriguing, given today’s economic climate with uncertainty and extreme volatility. The question was pointed and blunt! With a coach’s stare that would make any sports referee melt in their shoes, he said, “How the ‘H’ are we supposed to make it?” The following was our response.
First, both of us indicated that now more than ever is the time to get back to the basics, or the “block and tackle” of business strategy and execution. This includes knowing your cost of production and completing an enterprise analysis. Do not give the excuse that it is impossible because of inflation, gyrations in prices, production variables, and everything else under the sun. A good set of spreadsheets with a wide variety of assumptions can provide the guardrails for decision-making to keep you out of the emotionally charged ditch. Spreadsheets can bring reality to clouded, complex decisions so that you can be objective in your decision-making.
Next, place your goals in writing. Then, test your strategies, actions, and values against these underlying goals. Do not be afraid to formulate an advisory team to challenge and confirm your thoughts. As my co-presenter indicated, do not let experience cloud your thinking. Seek people outside the industry or those with a youthful mindset, regardless of your age, to add energy to the decision-making process.
Assess your situation with a good old-fashioned SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Internally examine the strengths of your balance sheet, income statement, and cash flow. Are you operating efficiently? How can you sweat the small stuff for incremental gain to reduce your losses? What aspects of your business need to be eliminated or reduced? This can include land, labor, livestock, machinery, and nonproductive people, even family members.
The group probably was expecting us to identify the “magic silver bullet” or the next big thing to add to the bottom line. However, in many cases, success is a result of doing a number of small things a little bit better. In this type of environment, the small things that you do will ripple through the business, with others, the community, and life in general. While success is often measured in profitability, the significance is what you give back to your community.
Source: 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.