As I've been traveling this winter to many different meetings across the country, I've had the pleasure to meet some outstanding producers! I started making some notes on individual strengths that I observed in many of these producers operations. Based on these observations, I discovered there were five factors or traits that these very successful producers have in common.
The first trait is Entrepreneurship. These producers are constantly pursuing new opportunities. They have clearly defined written business plans supported by a definite mission. They tend to be doers, the minute a plan is designed the implementation process begins. They think “out-of-the-box” and are not afraid to invest time and money into new ways of doing things.
The second trait is Innovation. These producers seem to constantly be asking the question, “how can we do things better?” They tend to be focused on profitability rather than just an accumulation of acres or size. For example, their focus tends to be on continuous improvements for every portion of the operation in order to maximize profit margins. They generally do their own on farm product comparisons to determine which options provide their operation the most value. As challenges arise these producers are equipped to develop timely solutions.
The third trait is Capital Management. These producers are businesspeople who just happen to be farmers. This group makes decisions based on calculated economic information rather than what feels right or by emotion. For example, they use computerized information management tools to develop, manage, and measure results as a standard business procedure. In addition to having a firm understanding of cash flows and balance sheets, they tend to have outstanding working relationships with capital partners, lenders, and suppliers.
The fourth trait is People Management. Of the five traits listed this may be the most important component. Communication ultimately can be the single process to make or break an operation. The most successful operations I've observed consider the people to be their most important form of capital. These operations have a workforce that consists of quality “management level people” rather than just hired help. Many of these operations provide opportunities for people to partner, profit share, or even buy their way in to the existing business over time. Generally, these operations have little if any personnel turnover.
The fifth trait is Technology Management. These producers adapt rapidly to new equipment, products, and technologies. They are early adapters to technology. These operations benefit immediately to technological opportunities because they have the resources within their operations to use it. They have the innovation, the capital, and most importantly the people to implement new technologies. Another noticeable priority of these producers is their high value of continuing education. These producers understand that rapid changes in agriculture require a strong commitment to ongoing education to ensure success.
Reflect on these five factors or traits within your individual operation. Ask yourself, which of these areas do we excel? What areas could we improve?
Managing margins is no longer just about being a good producer or a good marketer, but rather it's about being a good Business Manager!