Written by Scott Schaumburg, Vice President, West Plains Office
As we get to the end of the year, here are three actions you can take to help get your new year started moving forward with momentum.
1. Importance of knowing your “numbers”
Get to know your “numbers,” but more importantly what your profit means based on income and expenses. In my career, there have been instances where I have encountered customers or prospective customers who felt their “numbers” were good or not so good, but they weren’t sure where they stood. Knowing your “numbers” enables you to make timely decisions from one end of the spectrum to the other. For instance, one operation may need to make decisions to minimize income tax burdens while another may need to decide against a purchase that could significantly jeopardize its survival. Only by knowing your numbers and what your numbers mean can you make good financial decisions.
2. Deal with the hard things
You know those things on your to-do list that you need to do but don’t want to do. Some of these items might include:
- Meeting with a professional to assist with estate planning or the future of the farm,
- Meeting with a provider to help mitigate risk through crop insurance, livestock risk protection (LRP) or pasture, rangeland and forage (PRF) insurance, or
- Finding an accountant to assist with the farm accounting because your size and income has grown beyond basic accounting principles.
Identify one or two things on your to-do list that you’ve been putting off or avoiding. Put together a plan with dates to tackle these items as they are often the ones that need the most attention. Many times you find the things you’ve been avoiding or delaying dealing with are not nearly as challenging or unpleasant as you thought once you decide you are going to handle them and make a plan to complete them within a certain timeframe. Make these items a top priority. The feeling of progress or completion of these types of items can create a strong momentum in your operation and/or personal life as a weight is removed from your shoulders.
3. Plan for the future
Take some time to focus on the future. What can you and are you going to do to ensure the next generation has the skills needed to continue the operation? Are you encouraging education, development, and decision making or are you holding tight to the reins and treating the next generation like contract laborers? Whether the next generation is family or someone you see as having more potential than just earning a paycheck, you need to be sure you are not acting as a dream killer. Instead, encourage new ideas and thoughts.
A new idea or change might seem crazy at the time but as we saw during the Covid pandemic, businesses that took new ideas and implemented them fared much better than those that didn’t. Implementing new ideas or changes doesn’t have to completely upend your operation. You can start small, but you must start. Then give the new idea time to prove its worth. Not every new idea or change will be a success, and that is okay. If a new idea or change doesn’t succeed, it shouldn’t be a negative reflection on the person who came up with it. Instead, it should be an opportunity for everyone to learn and work together to come up with other ideas or changes.
Implementing an idea can be empowering for those who came up with it. Oftentimes, you see improvement in the operation whether it’s increased revenue, decreased expenses, or an improved work/life balance. As W. Edward Denny said, “It is not necessary to change. Survival is not mandatory.”
Take an opportunity to step back and reflect on this year’s successes. Remember and reward those who helped make the successes possible including yourself and take action towards improving the future.
Scott Schaumburg is a Vice President in the FCS Financial West Plains office and a cattle producer. With more than 20 years at FCS Financial, Scott enjoys helping Missouri farmers achieve their goals and living in rural Missouri. If you’re looking for an ag lender who understands the ups and downs of Missouri agriculture, reach out to an FCS Financial loan officer today.
