Creating a better future

Ken Solly, Ken Solly Business Services

Dealing with the business

Many farmers are heavily focused on their farming operations, yet they tend to neglect their own personal needs. Ensuring you have your priorities right is the first step toward a successful business and a happy personal and family life.

Your own physical and mental health must always be number one, your success is so dependent on it. Family comes number 2, business is number 3, followed by your personal priorities, friendships and community in that order. Get these out of step and problems will appear.

When it comes to the business, people are always the number one consideration. A lack of profit is not a production problem; it is a people problem – get the people right and the production and profit will follow. Building a good business needs to be centred on a good mindset (attitude), well developed structures (developed systems), excellent plans (strategy and tactics), first rate chemistry (good relationships) and a well develop culture (agreed values).

The starting point is to always ‘begin with the end in mind’, which means well developed goals and strategy are required in the 5 core plans that are essential for a good business.

The 5 plans are:

• Business Plan
• Family & Personal Plans
• Succession Plan
• Estate Plan
• Retirement Plans

In the absence of any of these plans, then a dot point list for each may be a good starting point. The main thing is to ensure that all parties involved are in agreement and “singing from the same hymn sheet” when it comes to implementation.

Strategy is an old war term where every step of the game plan has been meticulously studied in the pursuit of the best possible plan of attack. When initiating strategy for a new enterprise and/or business, the following steps can be useful to ensure a thorough process has been followed:

• Clear goals and objectives: Direction – begin with the end in mind
• Critical success factors: Key elements of success identified and understood
• Capability: Skills and mindset required
• Capacity: Financial, marketing, staff and time
• Sustainability: Will it survive the rigours of time
• Data: Record-keeping and benchmarks
• Information: What is the data telling us
• Knowledge: How can what we already know help the decision
• Research: Access and synthesise the best available
• Risk analysis: Volatility and Impacts
• Intuition: Does it feel right
• Experience: Past influencing the future
• Wisdom: The collective – best possible decision

The final blueprint must always be accompanied by financial verification.

The challenge of inflation

In volatile times inflation can be a sleeping giant eating into profits. Industry pundits have predicted inflation this year to be around 5%. If this is to materialise then managers need to show how they will offset inflation through better management. You must not go into a year in the hope that the markets and season will sustain and increase your margin. That is out of your control and a risky option.

If your enterprise and overhead costs total $1,000,000, then 5% inflation means an additional $50,000 will need to be generated just to maintain the status quo. This is an additional 250 lambs at $200/hd or 5,000 kg of carcase weight at $10 per kilogram or 10,000 kg of liveweight. Offsetting inflation is a long game because short-term gains are quite often hard to come by. You must be chipping away at improving productivity all the time.

Managing yourself better

Attitude is everything and this is your choice; some self-talk can help here. If times are tough avoid the victim mentality. If you see yourself as a victim there is a fair chance you will remain one, climb out of those shoes and pull on a winner’s hat. Sometimes you have to fake it until you make it, and you will make it, keep believing in yourself. Always acknowledge the good things in your life and try to build on them.

Don’t let anyone or anything consume or offend you – if you do then you have given it permission. Don’t take on other people’s problems when you have plenty of your own. When you get involved in others’ issues, most of the time the line in the sand keeps moving in the wrong direction and you find yourself out of your depth. Most importantly make sure you keep doing the things that sustain you.

Always be sceptical of your own beliefs; this triggers new learning. When dealing with others make sure you get in the other person’s shoes. I constantly remind myself of one of author Steven Covey’s 7 habits of highly effective people – ‘First seek to understand then to be understood’. If I understand the other person, then I can package my message better. Leaving the door open for constructive feedback is not practised anywhere near enough. Continuous improvement is the essence of ongoing success. Ensure at all times that you are dealing with the cold hard facts of every situation.

The rural industry has many ‘snake oil salespeople’ in it. If a new product is heralded as a solution to a problem, ask yourself 2 questions: who says it is good? and who are they? Trust and credibility need to come to the fore when deciding. Fallback positions are always recommended and ensure that the head not the heart is making your decisions. Some heart must be in every decision, but ensure the head is the dominant force.

The 80/20 rule runs true in your life

Twenty per cent of your time gives you 80% results. Good communication should be 80% listening and 20% speaking and 20% planning/organising and 80% implementation as a common yard stick. On the community front, if you are on a committee, 20% of the members usually do 80% of the work. On a personal level, most of us wear 20% of our clothes 80% of the time. This highlights the importance of time management and how it underpins success.

Work on your people skills

Improving the livestock genetics, pastures, animal health and nutrition are front and centre for most sheep operators yet the people skills are just as vital to your success. Communication, problem solving, negotiation, stress management, conflict resolution, leadership, emotional intelligence and resilience training are on very few farmers’ to-do list. Farming systems groups need to take the lead in providing training in these areas.