Many of them are trying to save money, and understandably so, but if they continue to fall behind on Accounts Payable or loan balances, what have they gained? If you find yourself at this cross-road, it is important that you stop and face reality. Don’t fall prey to the false notion that everything will suddenly turn around and be rosy. It typically takes some time to turn around, and, as the saying goes, “The best way to get out of a hole is to stop digging!”
As the financial returns of the industry get better, as they eventually may, will you be able to not only pay your current bills, but also catch up old Accounts Payable? That is a tough process to handle. It’s crucial that you don’t become complacent with this, because, while it may be challenging to handle, not doing so can cause irreversible damage to your finances. If you get too far behind, you may find yourself without adequate resources or the energy to overcome the necessary hurdles.
- Get it together financially. This requires that you measure where you currently are in your business. What are your strengths? What areas do you need help with? All progress begins with telling the truth. It will be the foundation for any sound transformation.
- Get the necessary help. With very few exceptions, I have found that lenders will be willing to help you reach your objectives if you know what they are. Even where they were unable or unwilling to participate long term, banks have usually worked with us long enough to acquire financing elsewhere.
- However, they need to know the plan you have in mind. So, build your plan! Know what you want to accomplish, what you’ll need to change to get there and where you might need assistance financially.
- Once you start to move forward with the plan of action, be sure to measure your results. This is the only way you’ll know if you are still on track or if you must adjust your plan. Just be sure to give the plan a chance to work, assuming it is built upon a solid foundation. Remember that “Rome was not built in one day!”
- Keep your lenders informed with regard to your progress. Often, your lender may have a situation where you have as much as a “65% Loan to Value.” That simply means that your Equity position is about ½ of what their loan position is. With this in mind, it is imperative that you keep them informed about your level of progress.
- I hope you’ve found this brief synopsis helpful. Remember to be sure you know where you are starting, what changes you’ll need to make, what your plan is to get to the next level, what your ultimate objective is, what your ongoing results are at all times, and that you are keeping your lender informed. Each of these factors will be essential to your future success. To see more on this, simply visit the video below.
If you need assistance with this task, please e-mail me at [email protected] or check out our website for many useful tools for your ongoing business evaluation at www.success-strategies.com. I wish you the best of success this year!
John Ellsworth of Success Strategies offers financial consulting to dairy and farming enterprises across the U.S. He may be contacted by email at [email protected] or by phone 209.988.8960. More information is available at www.success-strategies.com