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sustainability

The RISK 2-Step

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Here is a quote I recently read that was attributed to John D. Ingalls in Human Energy:

“The degree to which ambiguity can be tolerated determines the amount of difficulty
the individual can, and is willing to, meet and overcome in coping with the problems of
human life and in taking advantage of the opportunities life has to offer.”

Let’s make a few changes and see how it applies to business:

The degree to which risk can be tolerated determines the amount of variability the
business owner can, and is willing to, accept and manage in coping with the cycles of
business and in taking advantage of the growth opportunities that risk presents.

A good fair portion of any given week has me speaking with some very smart farm business owners,
lenders, and other business advisors. I continue to hear the same message: “guys (farmers) just don’t
understand the risk they are taking when they “

Risk is something every entrepreneur faces. We get paid for taking risks, and the more risk we take, the
higher the expected payday. Of course we all also recognize that the more risk we take, the greater the
potential loss as well.

But isn’t that pretty much what John Ingalls said above (or at least the paragraph I amended?

  • The risk averse cannot tolerate variability, is unwilling to manage cycles, and fails to capitalizeon growth opportunities.
  • The risk ardent embrace variability and cycles as opportunity to grow and expand.

The first step in being rewarded for taking risk is understanding the risk. It cannot be understood until is
acknowledged. Acknowledgement happens either when one steps out of his comfort zone and takes a
good hard look around, or when an outside party brings their perspective to the table, such as a
creditor, who might for example, change the terms of the relationship due to an inappropriately
managed risk.

Acknowledging that a risk exists, and recognizing its potential impact on your business can often be
difficult, scary, or even embarrassing. It can be hard to admit that we don’t know or understand
something that we (society) feel(s) we “should know.”

The second step in this 2-step, once you understand the risk, is to manage the risk. You’ve heard me say
many times “you can’t manage what you don’t measure,” which holds true for risks as well. Managing
the risk takes an understanding of how it could affect your business, measuring that effect and the
opportunities to mitigate the risk (think of it as a projection of best case and worst case scenarios.)

What does this all mean from a practical standpoint? Let’s consider a real world example from 2015.
Many growers were struggling on whether or not to apply fungicide to their durum. They were looking
for ways to reduce costs. The crop wasn’t looking so great (frost in late May and no rain until mid-July.)
The environmental factors that contribute to high fusarium were not as apparent as 2014.

The risk was the potential detriment to crop yield and/or quality from eliminating the fungicide
application to durum in 2015.

To understand and manage the risk, here are some questions that needed to be addressed:

  • How much damage can you withstand before lower quality grading eliminates profit potential?
  • How will lower grading affect ability to sell/deliver? (impact on cash flow)
  • Is there enough crop now growing to pay for the cost of fungicide if grade and yield are 100% protected? (cost/benefit consideration)
  • Is the crop at an even enough maturity to facilitate proper timing of the fungicide application?

Once these, and many other, points have been given appropriate consideration, one can make the best
management decision he/she can. In the case of the 2015 durum fusarium issue, some farmers sprayed
and still had toxic levels of fusarium; others didn’t spray and had manageable levels of fusarium. The
outcome is never guaranteed, but the process empowers you to make the best decisions possible.

Direct Questions

How are you determining which risks to pay attention to, which risks to manage, and which risks to
simply live with?

Even if you can’t dance, The RISK 2-Step does not require fluid movements or talented feet, but may still
require a lesson or two; who is interested in some “dance” lessons?
Are you risk averse or risk ardent? Knowing is important in being able to manage risk.

From the Home Quarter

Don’t kid yourself when answering the 3rd Direct Question above. We all know we need to be able to
handle some risk; my goodness, if we couldn’t, we wouldn’t be able to farm! But deep down at your
core, how do you handle risk? Consider this the “warm up” before stepping onto the dance floor for The
RISK 2-Step: truly acknowledge where your approach to risk lies, and then start the dance.

GFP FI 2

Managed Risk – Part 5: Inaction

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While there could be many more “parts” to the list of topics that would fall under “Managed Risk,” I’ll
end it this week with one that I believe many people, maybe all people, face each day.
The list of reasons (excuses) we provide to support our decision not to act is virtually endless. They can
be found in the 7 Deadly Sins (pride, envy, sloth) or in almost any self-help book (communication issues,
inequality, stress) or even from psychological therapy (apathy, self-esteem issues, narcissism.)
Here are a few of the most monumental farm issues that are affected by inaction:

Business Structure

I recently took a call from a young man looking for guidance on how to manage the complexity of his
current farm arrangement. He farms with his dad and his brother; all three men have their own
corporation and their own land; one brother farms full time with the dad, the other is part time with offfarm
work. Tracking financial contributions and division of labor are a nightmare, and yet both look like
a cakewalk compared to managing “whose inventory is whose?” They are not happy with the increased
efforts needed to deal with these issues, they all know that there is likely a better way, but no one has
taken a step until the day I spoke with one of the brothers.

In this case, the inaction stems from unawareness: none of the men involved in this family farm had the
knowledge of what, if any, options were available, what questions to ask, or who to even ask for help.
It’s also common for inaction to stem from fear – fear of appearing incompetent by asking a “dumb
question,” fear of making the wrong decision, fear of rocking the boat and hurting the family dynamic.

Family Issues

Family issues challenge most intergenerational farms. There are many varieties, and most are worthy of
a book being written on the topic. Elaine Froese wrote Farming’s In-Law Factor. There should be books
written on “How to Fire Your Father” and “Decoding Motivation: How to Translate Boomers, Gen X’ers,
and Millennials.” If only…

The most common reason for inaction on family issues is “I don’t want to blow up the farm.” The
problem is that inaction can blow up the farm with greater odds than if action was taken! Unless the
family member you’re dealing with has truly sinister motivations, the likelihood of a successful dialogue
is quite positive. No one wants to destroy the farm or the family, so with the appropriate approach,
success can be had. The inaction for family issues predominantly stems from fear. Coaching is available
to help families deal with these types of issues.

Transition

Considering the average age of a Canadian prairie farmer today, the volume of farm transitions to take
place over the next 10 years is staggering. The cumulative value of assets that will change ownership
would dwarf the GDP of some small nations. With so much at stake, why does every farm not have a
succession plan already in place (or at least in progress?)
Inaction on this front increases the risk of the following:

  • Future family fighting
  • Colossal tax obligations
  • Destroy the farm business
  • Your legacy lost

Excuses (reasons) for inaction here are unacceptable. It is nothing short of reckless and irresponsible to
leave undone a function with such enormous impact. There is no shame in not having all the answers, or
any answers for that matter. Farm transition is a process, not a result. The process becomes a path of
discovery, but if you insist on keeping your blinders on, don’t be surprised to one day deal with any or all
of the 4 bullet points above.

Direct Questions

What is your main reason for inaction? “No Time” is an excuse. “Fear” is a real reason, but only you can
conquer it.

What have your accountant and lawyer provided you for advice regarding your future transfer (sale) of
assets?

In a family business, inaction increases the probability of irreparable family dysfunction. What is getting
higher priority: family harmony or fear of perceived conflict?

From the Home Quarter

What must happen to make an issue a priority? Is it an immediate tangible loss/damage, like an
equipment breakdown in season? Is it emotional goal, like a new pickup truck? Is it perceived (assumed)
risk, like assuming your employee will quit unless he’s granted a wage increase?

Making an issue a priority is the best way to beat the risk of inaction. The fear of the perceived
outcomes or the fear of not knowing how to proceed gives us permission to keep urgent issues down
low on the priority list. But at what point does reality and rational reasoning take over so that we
recognize that the risk of inaction has more negative potential than that of any perceived outcome?
In retrospect, “inaction” is not so much a managed risk, but an unmanaged risk. Managing our
“inaction” actually reduces, or even eliminates, the risk.

If you struggle with inaction…
For a no charge consultation on where you are best to replace “fear” with “priority,” please call or email
me anytime.

grass

Information Management – Healthcare vs Your Farm

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Of all of the places one can imagine, our health care system is the preeminent entity that I believe
should be leaps and bounds ahead of everyone when it comes to managing data.

Over the last year or so, I’ve listened to my father-in-law’s observations about our healthcare system as
he led the charge relating to the changing needs of his disabled sister. He described how one nurse
would come into the hospital room, ask a series of questions, make some observations, take some
notes, and then leave. Shortly afterwards, another nurse would come into the hospital room, ask a
series of similar questions (getting similar answers,) make some observations, take some notes, and
then leave. At some point, a doctor would come into the hospital room, ask a series of similar questions
(and get similar answers,) make some observations, take some notes, and then leave. Usually these
notes where made on a chart that hung outside the hospital room door.

Some thoughts:

  • The cost incurred to have 3 highly paid and very intelligent individuals gathering similar
    information would likely astound me;
  • All of the information gatherers collected similar information, and compiled it into one paper-based record;
    Could anyone walking by a hospital room with malicious intent grab someone’s chart and leave
    that patient’s caregivers without access to critical information? Why isn’t this electronically
    secure yet (it’s only 2015 already!)
  • Patients get tired of answering the same question over and over;
  • Why wouldn’t the health regions equip each caregiver with a tablet computer that brings up a
    patient’s entire health history with the scan of a QR code that could be found on the patient’s
    wrist band?

Why am I writing about this? How is this important to you? First off, our healthcare should be of great
importance to everyone. But specifically as it relates to this blog, consider the
paragraph and bullet points above, but this time let the patient be your farm and the caregivers be your
business advisor, your lender, and your marketing advisor.

Direct Questions

How much better would it be to have all of your critical business information readily available for your
strategic partners to help you more effectively and efficiently manage your business?

How inefficient is it for each party to have to ask you for the same info? Your time is worth something
too, so wouldn’t you be better off not having to run through the same routine 3 times over?

How much risk is your business at if you were to lose, accidentally or maliciously, your historical business
information?

We’re a decade-and-a-half into the 21st century, and technology is awesome. When are we going to start
trusting it and using it to its full potential?

From the Home Quarter

I believe we have the best healthcare system in the western hemisphere, and I am by no means
criticizing any of our hard working health-care providers. But I do question the bureaucracy and
inefficiency that plagues the system (at least in the eyes of this layman.) I think we could do so much
better, which would then allow those on the front lines to spend more time providing healthcare rather
than administering information.

I believe that Western Canadian farmers are of the most efficient producers in the world, and I am by no
means criticizing any of your advancements and dedication to improving your production. But I do
question the lack of urgency and the failure to recognize the importance of having up to date critical
business information readily at your fingertips. You aren’t making the same type of “life and death”
decisions that are made daily by our health-care providers, but the decisions you make for your business
will effectively set in motion the cause and effect that can lead to life or death of your business.

Call to Action – Rate your current information management practices:

1. Can you produce your working capital figure within 2-3 minutes at your computer?

2. Can you advise what your total fertilizer cost per acre is by field? By crop?

3. Can you produce a current list of all farm assets with market values?

4. Do you keep a rolling list of cash requirements for the next 18 months? (i.e. loan payments,
property taxes, insurance premiums, etc.)

5. If you’re not willing to compile this critical information, are you willing (or can you) hire
someone to do it for you?

If you’ve answered YES to at least 4/5, congratulations, you’re ahead of the curve.
If you’ve answered YES to 3/5 or fewer, then please pick up the phone and ask for help.
(Hint: I always return voice mail messages.)

Growing Farm FI

Farm Shows – Is Something Left Off the Table?

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Who doesn’t love to attend the farm shows that scatter the prairie? From the latest equipment
advancements to distinctive new tools to cutting-edge technology, the exhibitors’ wares are tantalizing.
This isn’t unique to farmers; it’s human nature. There are tech shows, auto shows, fashion shows…the
list is endless. But I challenge any other industry’s show to match the diversity that you find at a farm
show.

Last week was the 2015 edition of Canada’s Farm Progress Show in Regina. I typically invest time there
and at the Western Canadian Crop Production Show in Saskatoon. Both are elite events. Both generate
millions and millions of dollars in economic benefits from immediate sales and future trade. And both
are primarily focused on production. (This also applies to Farm Tech, Manitoba Ag Days, Agri-Trade, Ag
In Motion, etc.)

What if we held a 3-day show that focused on management of your business:

  • Would we get 50,000 people coming through the turnstiles?
  • Would we see 500 exhibitors?
  • Would attendees mark their calendar a year out to ensure they didn’t miss next year’s show?

I would suggest the answers are: hell no, not even close, and that’s about as likely as a snowman getting
a sun tan. We all know why: management is BORING! Production is sexy! Grain marketing can be a thrill
ride! Managing and evaluating data…? Yuck!

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Business cannot operate without strong management. Lenders will not offer credit to poor managers.
Vendors will become less interested in doing business with poor managers. Employees won’t want to
work for poor managers. Imagine trying to operate your business without those three critical
factors…never mind trying to GROW your business!

Some farm shows have a smattering of business management features in their schedules by offering a
part day to focused speakers and/or topics around management. There are a number of players at these
shows who offer, or specialize in providing, management advisory services to farm businesses.

Direct Questions

Would you attend a farm show that focused primarily on managing your business?
Do you put as much focus on management as you do on production or marketing? If not, why not?

From the Home Quarter

I’m not picking on the farm shows as they are. I’m just using them as an example to contrast between
what is and what isn’t drawing crowds. What I am doing here is challenging the perception of the
players in the industry to increase their interest and their efforts towards management, so that it might
one day get as much attention as production.
If you’d like help planning your farm for business and personal success, then call me or send an email.

assets

Avoiding Assumptions About Assets

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“If you’ve inherited an asset, you should act more like the custodian, not the consumer, of that asset.”
I was having coffee with Bill Allen, a Sun Life advisor and friend of mine that I met through CAFA
(Canadian Association of Farm Advisors; great organization, check them out www.cafanet.com) and as
we were discussing business, he used that statement above to illustrate his personal values as they
relate to estate planning. I asked Bill if I could write my next article around this statement, and he
consented.

The farm land that is expected to change hands over the next decade is projected to be somewhere
north of $50 billion (that’s >$50,000,000,000.) Much of the land will be sold (enter the farm land
ownership fray) but much of it will be handed down to the next generation. To the chagrin of farming
children, some of that land might get passed down to their non-farming siblings (enter the farm
succession fray.)

To those who inherit land, think about Bill’s statement above.

If You’re a Farmer…

There is blood in that land; the blood of your ancestors who risked it all to come west for a chance at a
new life. To think that it’s yours to do with as you please is…well, I’ll let you fill in the blank. Now land
that you acquired on your own with your own business savvy, hard work, and some good luck…you can
have at ‘er! It’s mighty short sighted to mortgage your “heritage” land for “personal wants.” What about
your legacy? What about your kids?

If You’re Not a Farmer…

The expectation of a financial windfall from the passing of your parents is simply unacceptable,
especially if you’ve been bequeathed the land that was passed down for generations. It is not yours to
sell to the highest bidder; it is an heirloom that must be cherished and made available for the next
generation again.

When my grandmother immigrated to Canada as a child, some of her older siblings stayed back in the
old country. Their descendants are distant cousins who we had kept in touch with many years ago. I
recall that the “flat” in which they lived was not owned, but was still passed down through generations.
Ownership of their own home, something which we take for granted in Canada, was not realistic for
them at that time in history. And yet what they had, despite unowned, was bequeathed.

When I began farming I promised my dad, who was a recent widower at the time, that I would never
allow the original land to be jeopardized for expansion or otherwise. Now that I’m no longer actively
farming, I can only hope that my siblings who are carrying on will stick to that.

There is a way to minimize the risk of inherited land being sold off: complete a succession plan.
Call it whatever you like: transition plan, continuity plan, longevity plan, whatever! No matter what you
call it, just get started. Getting started is the hardest part, and there is help available to get you started.
You will eventually secede from the farm, and the activity of planning for it will force you to talk to your
family about what they want.

Direct Questions

Does your entire family know what happens to the farm if you were to pass away tomorrow? Ask them.
If their answer doesn’t match yours, then you haven’t done a good job of this.

Do your non-farming children even want to own land? If they don’t, why burden them with it? If your
assumption is “Why wouldn’t they want land,” then talk to them…now.

Can you afford to hand down the land without needing the food bank in retirement?

From the Home Quarter

When I was a kid, the standing joke was “I can’t give my kids the farm; I’ll get charged with child abuse!”
Today, land is a hot and sensitive topic. Over a century of blood, sweat, and tears is awash in homestead
land and to trade it for a fat cheque seems an indescribable tragedy when something as simple as a
conversation with family could circumvent such heartbreak.

Succession isn’t easy. It forces us to consider a future that we may not be ready to face. But ready or
not, the future is near, so it’s best to be prepared.

Whoever said it, this rightly applies: “We do not inherit the earth from our ancestors; we borrow it from
our children.” Sounds like they were having coffee with Bill too.

If you’d like help planning your farm for business and personal success, then call me or send an email.

planning

Decision Making with Incomplete Information

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“We rob ourselves when we make decisions in the moment with no thought of how those decisions will
impact our futures.” – Andy Stanley

It’s easy to look back at decisions we have made and say we could have done better. Are you ready to
head down “Metaphor Avenue”? Hind-sight is 20/20, so don’t beat yourself up; next time you’ll knock it
out of the park!

Why can you say that you could have done better in making past decisions? It is likely because you were
working with incomplete information. However, considering the vast availability of information today
let’s also suggest that too much information contributes greatly to incomplete information. There is a lot
of noise out there, and sorting through it all can be overwhelming.

So how does one make better decisions when working with incomplete information? It’s difficult, and
risky, especially considering the financial repercussions each decision can hold. Yet these decisions get
made regularly often based on emotion, a hunch, or some gossip.

Stick with your Strategic Plan

The strategy you have established for your business should rule when attempting to make decisions
with incomplete information. Any option that leads you to deviate from your strategy should be quickly
discarded. If a decision takes you away from your original strategy then either there are extenuating
circumstances or business has changed and your strategy wasn’t changed with it. Either way, you’ve got
some more work to do.

Follow your Tactical Plan

Strategy is what you want to accomplish and why. Tactics are how you will get it done. These 2 plans
should be closely aligned. Don’t get caught using justification that is “tactical” in nature to permit a
decision that goes against your strategic plan. To paraphrase the quote above, how will this decision
affect your future?

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Get Advice from Trusted Sources

Ideally, a trusted source has no vested interest in one decisive outcome over another. Although, a
trusted source can be someone who may have a vested interest, but whose integrity is above any
question you may have about his/her judgement. When information is incomplete or confusing, seek
out someone who has expertise and knowledge to help you sort through the noise and clear your focus.
A naturopath will always have a miracle product that can cure anything that ails you; a surgeon’s advice
will always insist that surgery is the best option. Vested interests….get a second (or third) opinion.

Direct Questions

Do you make business decisions without adequate information, basing your choice on emotion, a hunch,
or gossip?

Do your major decisions reflect your strategic plan? (Do you have a strategic plan?)

Do you have trusted advisors who you can call on for help?

Are you contributing to incomplete information from your own habits of improper data management?

From the Home Quarter

If we waited for perfect information before making every decision, we’d never make any decision. We
have always had to proceed with the best information we had at the time. And the fact is information is
never perfect. But don’t let that fact be an excuse to allow yourself to not manage your own business
information adequately. You have a responsibility to ensure that you provide yourself with information
that is as complete as you can make it. Business moves at the speed of the internet, so we must be in a
constant state of information management. Advisors can bring immeasurable benefit to your decision
making by either removing emotion or by providing insight from a position of unique expertise. And at
the end of the day, your best allies in decision making are planning and discipline.

If you’d like help planning your farm for business and personal success, then call me or send an email.

trees

Always Growing…Growing All Ways

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“Think of your business like a tree. What is a tree doing all the time? It’s growing. And if it’s not growing,
what is it doing? It’s dying. Your business is the same: if it’s not growing, it’s dying.”

I made this statement to a <2,000ac farmer at Canada’s Farm Progress Show in June 2014. He gave his
head a quarter turn with the slight tilt that indicated he thought I was nuts. Remember, this was still in
the period where Main Street of many small towns looked like a drag strip when word got out that there
was land for sale. Farm trucks from all over the area were burning rubber to get to the banker as fast
they could to get the loan and make the deal before anyone else. It was a period of “growth at all costs.”
His reply was, “I don’t want to grow. I’m happy with my land base as it is. My debts are almost gone,
why would I want to get back into debt? Then I’ve got to buy more equipment, hire some help!”

So I quantified my statement. “Growth doesn’t have to mean acres. There are many ways a business can
grow. If a farm can increase gross margins from better marketing, isn’t that growth? If a farm can
increase profits from better awareness of cost control and management of those costs, isn’t that
growth?” Reluctantly, he agreed.

Ever since the boom in ag took hold in 2007, farmers have increased acres and increased equipment
lines faster than ever. The truth of that statement can be read in the smile of every farm realtor and
farm equipment salesperson on the prairie. But why when we think of “growth” do we limit the scope of
our thinking to “size?”

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Increase Operational Efficiency

This is purely process management. How can you make improvements to processes on your farm that
will increase overall efficiency? For example, on our farm we run a single shoot drill. In order to apply
the volumes of fertilizer that our agronomic plan requires, we need to cover the entire farm twice: once
with a fertilizer blend in a band, and a second pass with seed & the fertilizer blend for the seed row.
Increasing operational efficiency for us could be trading up for a double shoot drill (although I’d prefer a
triple shoot), using a larger cart to reduce the frequency of stopping to fill, add a liquid kit to the existing
drill, or even utilize the high clearance sprayer to apply liquid fertilizer later in the growing season. There
are more options, but you get the drift. Naturally, each option has pros & cons and must be evaluated
from a management perspective to measure cost versus benefit.

Increase Size and Scale

Bigger is better, right? Not always. Are you confident that your net profit per acre is linear? What I mean
by that is, if you currently enjoy a net profit of $75/ac on your 3,000ac, will your net profit per acre
change if you increase to 6,000ac? 7,500ac? 10,000ac? The answer is Yes, it will change. Net profit per
acre is not linear and if you haven’t created realistic and honest projections when considering scaling up
your farm size, you might be surprised at the end of the year.

I often get asked by people who grew up on small farms in the 60’s and 70’s about farm size and just
“how big is too big” when it comes to farming in current environment. Is it 5,000ac, 10,000ac, more? I
always answer the same way, “I can tell you exactly when a farm is too big. It’s the moment that a farm
has expanded beyond the owner’s management capability. For some that’s 400ac, for others that
40,000ac. It depends.”

Increase Gross Margin

This one is easy to identify, but not always easy to do. Easy to identify because this is where profitability
on your farm begins. Not always easy to do because there are many factors out of your control. But as
you’ll recall from Growing Farm Profits Weekly Issue #2, I won’t dwell on what we can’t control.
Focusing on what we can’t control is passive and it concedes that outcomes are beyond our control.
Plus, it’s total BS.
Increase your gross margin by doing one, or all, of the following:

  • Increase your yields and/or quality
  • Reduce the costs of your direct inputs (seed, chemical, fertilizer)
  • Increase realized prices for your crop

Reduce Costs

Beyond the direct inputs as described above, cost control is a major issue on a lot of farms today. It
begins first and foremost with knowing your costs. How much are you spending on equipment, hired
help, fuel, parts & repairs, interest, etc? These are all controllable costs, and if you haven’t had a handle
on them to date, the current environment of narrow margins dictate you better get on it soon.
Now I’m not suggesting that you eliminate these costs, because you can’t if you want to keep farming.
But knowing where you can “trim the fat” is critical, and it also relates to operational efficiencies.

Direct Questions

Have you limited your view of growth to only “size and scale?”

How many different growth metrics can you identify on your farm?

What is the threshold of your management ability? Have you exceeded it, or do you still have capacity to
expand?

If you reduced each of your controllable expenses by a mere 5%, how much would your net profit
change?

From the Home Quarter

Growth as it relates to business does not purely mean “get bigger.” Remember that the purpose of your
business is to increase wealth, and size does not have a direct correlation to wealth. Size is one factor,
but we must not ignore all the others. I believe in the mantra that “better is better before bigger is
better.” Growth can manifest itself many ways, and we must examine all ways to grow if we want to
always grow.

horizon

Planning With a RESULTS Mindset

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I was listening to a local radio station the other night and heard an interview with the hockey coach of
the local junior team. What caught my attention was the comment “every game matters now, every
shift matters now as we try to make our way into the playoffs.”

So did every game and every shift matter less early in the season? Why would the team accept
mediocrity at the beginning of the season only to urgently try to find excellence at the tail end in a mad
dash to make the playoffs and maintain fan support?

It sounds to me like they didn’t have a plan when they opened Game 1 of the current campaign. If their
plan at the beginning of the season was to actually make the playoffs, then every shift and every game
would have mattered all season! Granted, that would not have guaranteed entry into the post-season,
but it’s about mindset. Did they have winning as a frame of mind all season? That is what I question.
How does this apply to your business? Simple: examine honestly and critically what is your frame of
mind going into the growing season.

Believe it or not, mindset will ultimately create your results.

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For example, a mindset of “don’t lose any money” will create an attitude of risk aversion, and a that would likely prevent you from forward pricing any new crop before it’s in the bin. The results would be lost pricing opportunities and likely lower profitability.

But if you are planning, I mean really putting effort into planning, the whole scheme changes.

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The essence of planning puts the focus on results. If you focus on results and therefore create a “results
mindset,” your attitude and your actions will reflect as such.

I contest that if that junior hockey team began this season with a results mindset, then every game and
every shift would matter right from the beginning of training camp. They’ll have about as much success
making the playoffs with a sub-.500 record in February as your farm will have in trying to turn an
average crop into a bumper in August.

Direct Questions

You are crop planning. Hopefully you’re market planning as well. Are you “business” planning?
Are you prepared to get dirty with some ground level business planning in 2015?

From the Home Quarter

In a recent issue of the blog, you were asked to think about how you define wealth,
because it would provide clarity in how you run your business. This week, you’ve been challenged to
think about your mindset at the beginning of this crop season. Intention sets direction. Clear goals set
the roadmap. As the CEO, you are the captain of your ship. Are you using any guidance tools, still
holding on to the compass and sextant, or consulting the GPS?

Over the next few weeks of Growing Farm Profits Weekly, we’ll dig deeper, and get a little dirty
regarding business planning. It can be messy, but it’s still cleaner than trying to deal with the unforeseen
when we’re not prepared.

Think about this: every enterprise that you do business with has a business plan.