Today’s economic environment in agriculture can be stifling and challenging even amongst the most progressive-minded individuals. Often, mainstream media plays on the negative by delivering disturbing headlines and images. While concerning phrases may garner readers and viewers, it can also be inhibitive for many. I encounter individuals every day in travels and seminars with the half-full or half-empty perspective. I recently facilitated a group exercise in which participants had to find a positive, productive way to tackle a tough issue inside the business. In other words, they were required to turn “I can’t and I won’t” into “I can and I will.”
Participants began by talking about the need for a basic business plan. I often heard phrases like, “I can’t develop a business plan!” or “that’s for corporate businesses and academics; all it does is gather dust on my shelf.” But a business plan does not have to be complicated or complex. There is an old adage that says, “if you cannot explain the business plan on a napkin, it’s too complex.”
An “I can” approach to business planning begins with incremental steps. First bring together all major stakeholders in the business and have each write out both short (one year) and long-term (five year) goals. This can be a challenging, but fun exercise to jump-start your planning process.
I also often hear there is too much uncertainty in price, cost, and markets to develop the cash flow component required in a business plan. Some are afraid to put possible scenarios and outcomes on paper, preferring to shoot from the hip and worry about the outcomes later. However, avoidance and denial will never make good business strategies. A good set of cash flow scenario plans with different production, price, and cost estimates can be one of your most valuable business tools. In baseball terminology, attempt to get between first and third base in your first year; get to home base after you refine your skills.
In financial management, another example of the “I can” approach is to monitor results on a monthly and quarterly basis, instead of annually. In larger and more complex businesses, finances can quickly deteriorate. Part of the “I can” approach is to hold your business accountable and make tough decisions throughout the year to maintain profitability.
The great economic super-cycle was like a magnet, attracting both productive and unproductive individuals to the industry. High commodity prices and profits often mask issues of productivity, particularly with family members. In tough family situations, I often hear something like, “I can’t tell a family member the business is going in a different direction without them.” A good way to positively approach this issue is to develop, in writing, the roles and responsibilities of all personnel. Next and most importantly, there must be accountability measures in place for each role. This component will be a differentiator between businesses with the top profitability and those with the lowest.
Another issue where I often encounter the “I can’t and I won’t” approach is business transition. Familiar statements include, “I have an estate plan and it will take care of everything,” or “I have no interest in taking the time to develop a transition plan.” This is a common theme in family businesses, regardless of type or size and many think an estate plan is the same as a transition plan. Others think a transition plan can be completed at one time with minimal time and investment. In actuality, transition plans often take three to five years initially and need to be updated after major events such as expansion, death, or a new partner. If one wants the business legacy to carry on, then the “I can” approach is critical. An outside facilitator can assure the “I can” approach with timelines, assignments, and accountability.
Education is the key component for any “I can and I will” approach. Time is our most valued asset, which makes time management a critical priority. Every year at seminars, I hear comments such as, “he couldn’t get away, so I’m here in his place,” or “they didn’t have time to come.” This generally shows a lack of interest in financial management of the business. There will always be sick cows, crops to maintain, and other reasons not to leave the daily duties of the business, but education is critical in today’s quickly changing environment.
In order to successfully balance the challenges of life, the “I can and I will” approach is most helpful. One of my former professors at Cornell, Dr. George Conneman, once said, “there are the $100, $1000, and $10,000-day decisions.” Those that operate from the “I can’t” approach will worry about the $100-day decision while the “I can” individuals will prioritize decisions and focus on profitability. The “can do” approach is often multiplied because of the natural draw to other “can do” individuals. The best way to benefit from a “can do” approach is to practice one yourself.