the honeymoon's over
Farmer Jon here, I happened across an article the other day called Top 10 reasons small businesses fail. I thought it would be a good refresher of things not to do. Instead it was a wake up call. I felt like we, to some extent, were guilty of probably six to eight of those ten! I'm no expert but I don't think that's good. The good news is, I'm fairly confident we will still succeed but only if we fix some of the things mentioned in the article.
The biggest problem, in our case, was emotion. We were too emotionally attached to everything, which led to poor business decisions based solely on emotion. I think being emotionally invested in your business is very important (especially if you are a farmer) but I think we were TOO invested. Or at the very least, we were just focusing that emotion in the wrong areas. I've already delved into this topic on multiple occasions: balance & rocky mountain oysters. But I feel like I've officially made the change in mindset. It's not a drastic change but it is a different way of thinking that needed to happen. "So what does that mean?", you might ask. Well, I'll tell you:
1. We continue with what we've started in regards to putting together a good inventory and accounting system that we can stick to and that we can quickly and easily extrapolate valuable information that we can use in making business decisions. For instance, right now I can't tell you exactly how much we'd need to make off of each hog to break even. How am I supposed to make money if I don't know what my break even point is on something? I can't.
2. Once we have those systems in place, we need to evaluate each enterprise and determine which offer the most profit for the amount of time and resources spent. If they all make sense to keep, that's fine, but if not, it needs to be eliminated from our operation or changes need to be made to make it profitable.
3. Re-evaluate our goals based on the conclusions of 1 & 2.
The rest will come with time, as we follow through with the changes mentioned above. It's funny how they all tie together. Our "poor accounting" is inhibiting our ability to determine whether "the math works" and/or what our "operational inefficiencies" are. I also think that our "out of control growth" led to a lack of a "cash cushion" and "operational mediocrity" due to being spread to thin. All of which link directly to "dysfunctional management" and the root cause for all of this stems back to some poor decisions based on our emotions which I think qualifies as "owners who cannot get out of their own way".
