Let’s not call these New Year’s Resolutions. Let’s think of them as things we do just because they make us happy, and more profitable.
1. Pay Yourself a fair wage
If you are like most farmers or ranchers you don’t pay yourself or other family members a regular salary. That’s a mistake and you should take steps to correct it immediately. Determine a fair salary (see the tips in the last newsletter), set up a personal bank account and start issuing regular paychecks to every family member working in the business.
2. Create Savings
You work hard for your money. Make your money work hard for you. Now that you are paying yourself a wage start a disciplined savings/investment program taking at least 10% of your annual income. A disciplined investment program will pave the way to a secure financial future. Consider the following: If you began monthly contributions to a tax deferred savings program of $4,000/year with a modest 6% annual return on your investments, by the time you are 60 your investments would grow to $358,925. At 7.5% they’d grow to $486,830 and with a 10% return (closer to the long term stock market average) the value would grow to $832,838. As a business owner there are special plans available which allow for much higher contributions. In addition to the increase in value, you may realize significant tax savings by making these contributions.
3. Take 20% of your time for Working On Your Business (WOTB)
Apply the 80/20 rule (20% of the things you do produces 80% of the results) to your business. Take 8 hours a week (2 mornings) for WOTB. Why mornings? Most of us are freshest in the morning. As Stan Parsons used to say, “Prime time for prime work.” If two mornings a week is too much, make it 1, but make the focus of your first WOTB session solving the problem that keeps you from being able to devote 2 mornings to WOTB.
4. Revisit Your Vision Statement & Action Plan
If you don’t already have a vision statement, or haven’t revisited it for a year or more, use the ICA process to create personal and business vision statements and an action plan to achieve them. The ICA process asks four questions:
1. What do you want?;
2. What constraints might you face?;
3. What strategies might overcome these constraints to achieve your vision?; and
4. What actions will you take to implement the most promising strategies? In answering this final question you’ll need to ask a few more questions: What specific steps will you take to implement this action? Who is responsible for each step? When will each step be completed?
5. Hold Weekly Working In The Business (WITB) Meetings.
A regular WITB meeting can go a long way toward making sure everyone stays on task and works together. Start the meeting by reviewing the accomplishments of the past week and lay out the tasks in the week ahead. Record the tasks and the person responsible for the result. End the meeting by identifying worry areas. Keep the meeting short and focused.
6. Take or Repeat the Ranching For Profit School.
Take it from Colorado Executive Link Member Steve Oswald: “This school is without question one of the most challenging and thought provoking experiences I’ve had. And sooooo much better the third time around.” Whether it’ll be your first, second or seventh time in class, we’d love to see you. The repeat fee is only $500.
7. Attend a personal growth/communication seminar
Our success in life or business is directly related to the success of our relationships. Most of us would rather learn how to palpate a cow than talk more effectively to one another, but improving our communication and other relationship skills may be the most important step we can take in 2018.
8. Read 6 Books
Read at least one new book every two months. Include a biography, a novel or two and a few books on management and business.
9. Take A Vacation (Going to a bull sale is not a vacation!)
Terry McCosker, my Australian counterpart, tells his Executive Link members “You can do 12 months work in 11 months, but not in 12.” ProfitProbe™ shows that he’s right. Owners and managers of benchmark businesses (the businesses with the highest Return on Assets (ROA)) took more vacation days than operators earning lower ROA. You could argue that because they had a higher ROA they could afford to take more time off, but if you took a close look at these businesses I think you’d find that they were more efficient because they took time to recharge their batteries.
10. Give something back
It’s been said that to achieve a fulfilled life we should pay attention to our physical, intellectual, emotional and spiritual well being. This last aspect of our life may be the one that makes us most distinct from other creatures. It requires that we participate in something bigger than ourselves for a good that will go beyond us and our immediate families. Identify a cause or action you’ll take this year to have an impact beyond your farm or ranch.