Ask a Margins Expert
Have a margins question? Through this blog, you will gain insight into improving your bottom line, as a margins expert answers questions and provides farm business advice.
Jul 05, 2011
We all have unique farming operations with different opportunities. One of the primary keys to operating a successful business is determining how to prioritize our time, energy, and resources. I've had the opportunity to work with some successful business people in the past several years. One primary observation I've made is that the best business managers have a knack for prioritizing their time. They have the ability to recognize their own weaknesses. They are quick to replace themselves with people who are experts. They still make all of the final decisions for their business; however, they have better information with a much smaller time investment. Consider your operation; whether it's agronomy, equipment, marketing, or accounting. With the complexities of the world we live in today it's virtually impossible to be an expert in every area.
If you buy into the idea that the world is complex and it's difficult to be an expert in every area, there seems to be a solution that has worked for many businesses. This process is relatively simple but it takes discipline, communication, and follow through in order to achieve the best results. The structure involves the following process.
Develop an overall mission for your business. I have spoken of this topic in previous blogs. Basically, you need to know where you're going before you can get there.
Set a Specific Goal for each profit center within your business. Identify a specific yield level, price level, or production level. Basically structure a statement which defines the specific level of achievement.
Establish specific objectives to achieve your goals. In order to achieve any goal there needs to be a process which identifies and measures results.
1. Determine the individuals responsible for decisions
2. Develop the process
3. Establish timelines and deadlines
4. Identify desired results
5. Review results, analyze productivity, and efficiency
6. Establish improvement plans and corrections procedures
If you are personally good at developing plans and measuring results this would be a great area to invest additional time. Conversely, if you are somewhat unorganized or short on time, this may be an area where an external consultant could help you to improve your results.
Once you have established the above process, the structure could be replicated across each specific profit center of your business. The key to its success still comes down to the basic components of time, discipline, follow through, and (most importantly) the ability to recognize the need of assistance. For example, if you constantly struggle with discipline in marketing or are unable to put together an effective plan it may be time to hire a professional marketing analyst. Keep in mind, there are no silver bullets and every aspect of your business is complicated. Therefore, by sharing your work load and focusing on your individual strengths you can empower your business by the strengths of additional business partners. Increasing the size and knowledge of your business management team will allow you to structure your goals and achieve the results you desire.
If you have specific questions regarding consultants, or other business partners please send your questions. Determining what assistance may be most beneficial sometimes just takes a general conversation about your business which can put a spotlight on some specific needs.