Only you can define the outcome of your business. Generations ago, farmers said, “I can’t control the markets and the weather.” Rolling the dice is not good enough today.
The first hurdle of success is a mental one: you cannot control things but you can manage them. This mentality is as important as the technology of your business. Success has wiped out the lessons and discipline of 20 years’ experience and education. You can anticipate patterns without having to accurately predict the correct time, price and place an event will occur.
That’s your job: to anticipate patterns.
Discipline and wishes
Discipline. Success is a matter of being smart, and at the same time, it’s also a question of discipline. Sometimes you’re successful from doing deals; other times it’s from not doing deals.
Define 15-20% of your time for strategic planning. Only you can shape the best future returns for your family business.
And since smart people don’t give away their talents and experience for free, consider purchasing quality management advice as an input. Ask yourself what is the marginal value of buying tax consulting or financial strategic financial consulting? You probably need it, although you will not see a straight-line benefit as you do buying additional fertilizer for an underperforming field. Good advice begins by removing you from the “group think” coffee shop environment and applying proven management principles to your operation.
Be careful what you wish for. Today’s high crop prices stimulate competitors’ productions which will come back to haunt us. Markets always get ahead of themselves. The ethanol, fertilizer, hog and broiler industries are suffering or have suffered from added capacity motivated by high prices. Once added capacity is in place, there is a death match as others compete on operating cost. Eventually they compete on marginal cost, go bankrupt and then finally compete on more normal basis.
Don’t underestimate global response to high prices. These are patterns that we can anticipate.
The growth rate of grain production from 1985 to 2007 was pretty weak because prices were low; there was no incentive for more capacity to come online. These questions and suggestions may feel like Mom telling you to eat your spinach. The bottom line, beyond “success,” is passing on a sound business, just as previous generations did for you.