How can I Compete? Getting Ahead in Dairy Industry Date: 9/30/2019 11:37:24 AM Author: Greg Steele Educational Opportunities: Articles Home > Education & Events > September 2019 > How can I Compete? Getting Ahead in Dairy Industry Share: Weather uncertainty, market volatility and increasing operational and capital costs are just a few of the challenges that test even the keenest farm managers in developing a 2020 budget leading to profitability. So what is a dairy farm owner to do? A proven approach is hiring a qualified business consultant. They serve as expert resource to you and your business. Some contend that working with a business consultant is essential -- a key strategy to remain competitive in the dairy industry. Successful managers have come to realize they are sometimes too close to an issue to see things clearly. Seeking the assistance of a qualified and experienced business consultant solves the dilemma, providing an expert on their side with whom they can talk openly and expect candid feedback. The following are some of the key areas that business consultants focus on as they work with a dairy business: Accounting and production systems – Is the information generated adequate? Do the systems improve and support management decisions? Does the accounting system provide the necessary information for tax reporting compliance? Are processes and procedures adequate to provide reliable and accurate information? Budget projections – Are the budget assumptions relevant? Will the cash flow be adequate? How will the necessary capital purchases and improvements be funded? How is financial performance measured? Financial Monitoring – What key performance indicators are recorded, measured and discussed on a routine basis to track financial progress? How are the financial and production systems linked to provide economic analysis of performance? What kind of benchmarking can be used to compare your operation to others in a fashion that can identify opportunities for improvement? Profitability – Where are the bottlenecks limiting profits? What can be done to improve the cost structure? Are capital, management and resources being managed effectively? What improvements in the operational systems needed? Margin management programs – What elements are needed to have a sound marketing plan? Is the cost of production predictable? What are the tools available to implement a marketing program? Which strategies and targets will be most successful to my business? How targets established and what are they? How do you make the best decision with the available information? How often do you evaluate and adjust the plan? Employee management – Where are the opportunities to improve labor efficiency? Are parlor procedures sound? Is the work force organized? Would increasing job specialization improve performance? What additional employee training is needed? Are OSHA and other labor regulations in compliance? Business structure – Is the business structured for long-term success? Are various tax management options available? Are the “buy/sell” agreements adequate? Will the business structure accommodate growth? How will growth be funded? Risk management – Are the plans needed to protect the business from excessive risk in place? Are interest rates fixed? Are input supplies booked? Is milk priced? What are the contingency plans for a crop failure, a disease outbreak or the unexpected? What is the environmental risk to the business and are you prepared for unforeseen events such as manure spills or accidents? Succession Planning – What is the vision for the business and personnel? What are the opportunities for the next generation? How can it be implemented? What is the timeline for the transfer? Don’t be scared off by the fees associated with the use of management or financial consultants. A good decision that improves business revenue or reduces cost will more than pay for the cost many times over. Once financial returns are increased with better management decisions consulting fees are justified and understood as a sound business expense. Simply put, business consulting is an investment into the future performance of your business. Competitive pressures are only going to continue on today’s dairy operations. There’s truth to the old adage, “If you’re not improving your business, you’re falling behind.” The services of a qualified business consultant can be just the tool to help your business compete for the long run. Comments There are no comments. Leave comment Name: Email: Comments: Enter security code: Greg Steele - Senior Dairy Lending Specialist Articles Four Tips for Winter Rural House Hunting Articles Financial Fitness: Top 5 Factors Affecting Your Credit Score Articles Pork Producers Looking for Opportunities Articles Hunting for Recreational Property? Three Things to Know.