Challenging financial situations have created anxiety and confusion over the past five years for most U.S. producers. Low commodity prices have been one of the primary culprits, even though productivity and efficiency continue to improve. Why is it some operations have been profitable, yet others struggle to break even?
Strategic Resource Teams
One common denominator of those who are the most successful correlates with the best human resources surrounding them. Not only do they have the best connections, they have comprehensive communication as well. Conversely, a strategic resource team helps you to focus on your business where the critical decisions are made; identifying the people as the most important resource.
Create your own strategic resource team to reset your business’ trajectory. Alternative growth strategies, risk mitigation, new markets, a new profit center, access to capital, collaborative opportunities, generational transition, new land rental opportunities, agronomic improvements, herd health improvements, lower interest rates and better value propositions are just some of the basics that can come from your newly identified strategic resource team. Maybe you're already working with a great team, but are you maximizing your, and their, potential? What gaps do you have in your current resource team, and how might that be negatively affecting your business?
Typically, communication is the biggest hurdle, and lack of transparency can derail a great team. Your strategic team can’t completely help without a total understanding of your financial condition. In 99% of cases, the more information you give, the more they can help. Ultimately your success leads to their success, so why hide any financial details? Statements including cash flow, cost of production details, income statements, profit center P&L, balance sheets, trend analysis and pertinent financial ratios should be on the table for your strategic resource team.
CANDIDATES FOR YOUR STRATEGIC RESOURCE TEAM
1. Family: actively engaged, owners, eventual owners, spouses.
2. Advisory Board: family, key employees, trusted mentors.
3. Financial/Production Consultants: strategic planning, coaching, education.
4. Lender: access to capital, interest rates, education.
5. CPA: should understand your market value position.
6. Attorney: business structure, succession/transition planning.
7. Investment Partners: landowners, peers, family, others.
8. Insurance Agents: risk management, production, property, liability.
9. Marketing Advisers: brokers, end-users, market analyst, education.
10. Peer Advisory Board: similar farmers not in direct competition.
Chris Barron is director of operations and president of Carson and Barron Farms in Rowley, Iowa. He is also a national financial consultant for Ag View Solutions.