What If You Could?

Recently, I was thinking about a Client with whom I have worked for several years and, as I reviewed their financial results, I was thankful for the positive progress they had made.

When I first met with them, they were quite disappointed that their results were not very solid. In fact, their banker had already put them on notice that they were close to being shipped off to the bank’s infamous “Workout Group.” That is a department you definitely don’t want to end up in. While some may think that it’s a place where you work out your financial challenges, I assure you that it typically is a department where the participants “work your loans out of the bank,” and it is usually high pressure.

Regardless, this Client was not very profitable, and, due to their losses, they were approaching a level of debt leverage that would make them unable to acquire additional financing…” Thus, I asked them the following question: “What if I could guide you to become more profitable and lower your debt/cow? Would you be interested?”

Their first thought caught me a little off guard. They asked if my assistance would be free. After assuring them that I was not with the Red Cross, we started serious discussions about how we could achieve these goals. My first task was to establish what they specifically wanted to accomplish and then, after evaluating what their current position was, start building a plan to move them forward.

Part of the process included a restructuring of their debt load. Of their total debt, far too much was on short term loans, and way too little was against their real estate, which was quite highly valued. Following the restructure, we got them involved in positive budgeting. After developing their budget, we tracked their actual results against it every month. As I have said before, if you measure it, you will better understand it. If you understand it, you can control it, and, of course, if you can control it, you can improve it. This is true with any item, including Cash Flow.

Once we had this process moving forward, we initiated a program with the help of their Nutritionist to boost their milk produced per cow. With the optimal nutrition in place, they started milking fresh cows 4X/day, at the beginning & end of each milking shift. With more cwts of milk produced, we lowered their cost/cwt, always a good thing to do.

Finally, I convinced them that with their higher production and improved herd health, they might want to expand. Making more total cwts, just as with their higher milk per cow, helped them to spread fixed costs out very nicely. Incidentally, the milkers still got their shift done in the same amount of time, even with the 150 added cows.

Voila! Just like magic, all these changes assisted this Client to succeed at a higher level. So, if you are having some challenges in your business, consider “What If I Could…?” I would be happy to assist you with the process!

“Let our advance worrying become advance thinking and planning.” ~ Winston Churchill

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