Top 5 common ‘business’ issues for agri-business owners in 2017
For most, the holidays have ended or are coming to an end, and we’re all looking to hit the ground running in 2018.
Our work with agri-business owners in 2017 yielded a few common issues across the board in relation to growing or running their agri-businesses. Therefore, we thought what better way to start 2018 than by reviewing these, and giving some tips on how to manage the issues.
Here’s 5 of the most common issues (there’s plenty more) we came across:
1. Feeling somewhat alone, and unsure where to go to get advice
These days, we have more information available to us than ever before. But, for some reason it seems harder to find good information, which actually leads to change. And because there is so much of it, trying to sift through, process, then act on it, all gets a bit much. It becomes overwhelming, and things go into the ‘too hard basket’.
And similarly in rural settings, it’s easy to feel isolated. Heck, just dealing with the challenges raised when trying to build a business are confronting, and often you just don’t know who to talk to, that might make things a bit easier…
Find and maximise the use of trusted advisers. If you only talk to your accountant once a year at tax time, it’s time to get a new accountant. If you don’t have a business adviser, you should find one, and a good business adviser will make you far more money than they will cost.
Also, consider the use of a business coach / mentor. In the same way an elite athlete has a coach by their side, if you’re trying to create a profitable, high performing business, a coach can be integral in this process. And, try seeking a group of likeminded people going through the same process as you. You’ll find that maybe you actually aren’t that unique, or alone, as you face these challenges.
And, don’t forget the power of groups on social media. These can provide a great forum for connection with others who are in a similar boat to you, or where you want to be.
2. Difficulty getting everyone on the same page
Often in businesses (particularly family businesses), people are not always on the same page, or aligned in their thinking, about where the business is going. It’s very difficult to grow a business successfully, if everyone is not heading in the same direction.
This applies if there are 2 in the business, or 10 in the business. Everyone must have signed up to the plan or Vision, because if they haven’t, things are likely to get derailed. This will result in wasted time, effort and money, with diluted focus and attention.
Focus on and spend the time required to get clear on where the business is going (the Vision). All key decision makers must have input to this process, and ultimately must have ownership over that Vision.
Then, to maintain alignment as the business changes and grows, make sure everyone meets routinely, in a formal manner e.g. a board meeting, to keep everyone engaged and the communication lines open.
3. Financial education
Financial management is one of these areas that many may consider to be ‘Double Dutch’. You might be great at producing a quality product, or you might be a ‘people person’ and staff management and customer engagement comes naturally, however making sense of financial information, and using it effectively, is just one area you can’t master.
You’re not alone, and this is extremely common.
There isn’t really an easy fix for this, because having a fundamental understanding of financial management is vital when running a business, and it often takes time to build up your knowledge base in this area if you don’t have previous experience. However, you can make the process (relatively) foolproof, as long as you are proactive.
Fundamentally it is about looking forward (budget and forecasting) and then measuring progress (monitoring financial performance). Educate yourself on the financial fundamentals, then engage a trusted advisor such as an accountant to make sure both your financial management and financial strategy are under control. Then develop systems, checks and balances, such as routine performance reviews (monthly at a minimum) and regular meetings with your accountant / adviser (we recommend quarterly) to make sure things are up-to-date and on track.
It is likely no surprise that succession continues to feature as a top issue facing those in agriculture. It is a tough one to get right, but this is usually due to the fact that succession is often expected to be difficult, because everyone has those ‘train wreck’ stories in the back of the mind.
Some truths: there is no one size fits all approach, it won’t happen overnight, and you should expect to have some difficult conversations. However, the whole process will be much easier if:
- You engage an external party to manage the process. This helps take the emotion out of it.
- The process is begun as early as possible. The longer it is left, the more likely it will head towards the dreaded ‘train wreck’.
- You are prepared to have open and honest conversations, where everyone gets to air their thoughts, without fear of judgement etc.
The upsides: Succession (or ‘business growth and transition’ as we like to call it) is an excellent opportunity to actually grow and fine-tune the business, by bringing in funds, new skills, more resources, and transitioning out those that are either not on the same page, or those that have done their time and now deserve to sit back and enjoy the fruits of their labour.
5. Finding the time to work ON the business, not in it.
One of the most common things we hear is “I can’t find the time to do the really important things that will grow the business, because I’m too busy running around doing the daily tasks”. Taking the time to step back, objectively review things, and do some higher level planning, is critical to creating a high performing business. It must happen, otherwise you will be forever stuck in the cycle of reacting, without ever really getting ahead.
In many industries, professional development (i.e. workshops, programs etc.) is just part and parcel of being in business, to make sure you are at the top of your game. Professional development is a fixed cost in the business, not something that happens when you find the time.
Professional development is much more valuable than simply what you learn. It’s a chance to get out of your daily environment, be exposed to new ways of thinking, and get your mind into a different gear. More ideas are here.
With that in mind, please take some time to reflect on your 2017, and start thinking about how you can make 2018 even more positive and profitable.
The ABDI Team