This list is from INC.Com. Written by David Finkel a professional business coach. Here is a quick list of the simple things you can do to increase your company's gross and operating profit margins.  Speed up your design cycle (Decision Making).  This can allow you to accomplish more tasks in half the time, potentially increasing your profits over 30 percent. The faster you can make a decision the more efficient your team can become. Eliminate tasks and activities that don't add value to the company or customer.  Every dollar you save by eliminating the cost of things that don't add value to your company drops directly to your bottom line. Increase pricing.  If you bill hourly, review your billing rates and push them higher.  If you charge per product, look for ways you can command a higher price.  Could you bundle more value into a package?  Improve your marketing and sales scripting to effectively sell at a higher price?  Or could you just boldly increase your pricing?  Most farms/businesses set their prices when their business was first launched, and since they were so hungry for business, they set pricing levels low. Over time, the business likely only made nominal increases to pricing every few years, but rarely did the owner ever sit down and fundamentally rethink his or her pricing model. Well take a close look at your pricing now. Regularly review your administrative and operational staff levels closely.  Let your revenues grow faster than you’re hiring. If you have underutilized staff create methods of task that can add to your bottom line. Shorten your sales cycle.  How can you close your sale faster?  This will decrease your sales cost per transaction and free up a lot of hidden cash flow that previously was locked up in your sales staff. – biggest ones are early season discounts, interest expenses, and product condition. Increase the dollar value of every sales transaction.  Ask, How can I get each customer transaction to be for a larger dollar amount?"  What upsells, cross sells, or resales could you strategically implement?  What package offers could you test and introduce? Do the trucking yourself Manage quality (in the meat, grains, etc) Deliver to final destination Deliver on their schedule Beware the steep cost of attrition/retention. Customer retention is a strategic expense if spent wisely.  How can you increase your customer retention? Landlords Private Meat Sales Grain Merchandisers Employees Feed your winning sales people more leads (even if that means you starve your lower performing sales people of leads.)  This is not a time to be "fair", but to be strategic.  If every lead you give to John is worth $2,100 and every lead you give to Sarah is worth $3,200, then you've got to take this into account when you divide leads. Be transparent about this and let it be a spark to help John learn how to increase his own dollar value per company lead given to him. Think of this with employees. If one employee is better at a task, give them the option for overtime and send the others home. More worth your money. 9. Strategically map out systems. Look for ways to educate your staff on the ideal use of their time with your product or service. 10. Shift a cost from a fixed to a variable expense to give yourself greater flexibility.  This is a way to protect your cash flow.  It is extremely important for unproven tactics and strategies.  Flex leases, variable rate loans (inverted now), basis contracts. 11. Shift a cost from a variable to a fixed where the value is proven.  Make this shift only when you can negotiate a substantial price savings by doing so. Fertilizer, seed, insurance, interest rates (now) 12. Consistently look for ways to lower your fixed overhead.  Scrutinize your base expenses to eliminate non-strategic expenses that just don't add value to the company or to the customer. 13. Negotiate hard.  Take the time to plan out your negotiation strategically.  Create competition for your dollars.  Create a list of concessions you want, with extras for you to trade off.  Research the market to better understand the best deal you can expect.  Even hire an experienced negotiator to help you make the purchase on the best price and terms you can.  If the asset you're buying for your business is large enough, the ROI on your negotiation work can be immense. 14. Get clear on all the costs of inventory: cost of capital; storage; insurance; etc.  This will help you make informed stocking levels. – placing insurance premium equivalents into a reserve account can add up over the years and create a pool of income generating self-insurance. 15. Set optimal inventory levels and stick to them.  Constantly be on the lookout for ways to safely reduce your inventory levels.  If you have inventory you're unlikely to sell, scrap or donate it so that you can free up the space and write off the inventory.

Landon Friesen @landon707 on Twitter • What is your cost of production? o This isn’t unique to farming. It is important in all types of businesses.  Coors light has to know what they have in each 12 pack otherwise they won’t be around to make more.  Just like in our introduction…..If you aren’t farming for profit you won’t be farming for long o If someone asked you break even how accurate will your answer be?  Your number needs to be flexible and include all expenses supported by the farm. (family living)  It will start off abstract or a wild ass guess • Early predictions will be estimates as all parts can change • Fuel, time, extra passes, interest hikes, sales, hired labor  Change the information as it becomes fact is key. It will seem like less work throughout the year if you make more little changes rather than sitting down for hours. Especially during the busy growing season. Some of the top producers we talk with have scheduled time each week to focus on this part. • After you lock in inputs • After you make field passes • After you make grain sales  Make you more confident in your sales • Early season sales are made to be above the rough target or sell into an overall profit model. • Later in the processes you can be more accurate in recording the margins generated from sales • Again, be careful chasing the peaks in the markets. Remember farmers never go out of business selling for a profit  Will help with acquisition/expansion scenarios • Time to upgrade combines? • Should I rent that extra 160 acres? • Can I buy the land from my land lord?  Effects some of your costs of production • your interest rates – detail pays • Negotiations with land lords and sales people • Summarize o Having the knowledge of what your breakeven is can make you a more confident producer. Livestock to crops one really should know what they can sell the finished product for to cover expenses and make profit. This allows a producer to be more confident in making quick decisions which could result in higher levels of profit. Get detailed and keep it updated throughout the year. Don’t be afraid to share it with others to help catch areas that may be overlooked. • Challenge o Where are you keeping your breakeven information now? Are you prepared to say yes when the crush plant or processing plant calls with a cash bid? How could you make sure your information is more accurate or more detailed? Who else knows what your breakeven is? Take time to focus on the answers to those questions to help drive you to be a more profitable farmer. • Conference Update https://www.farm4profit.com/uploads/8/6/6/6/86663378/farm4profit_farm_business_award.pdf https://www.harvestprofit.com/

https://smallfarmnation.com/rules-for-starting-a-successful-farm-business/ Small Farm Nation – Get Growing They have a podcast and this list is from their 11 Farm Business Rules episode So, it seems that more and more people share the dream of running a sustainable family farm. Now, these guidelines, which they call 11 Business Rules for Starting/Running a Family Farm, Farm Rule #1 – Your Farm is a Business, Not a Hobby Most likely farming is in your DNA and you know it’s a farming business, not a weekend hobby. But, remember if you aren’t farming for profit you won’t be farming for long. If you want a hobby, that’s fine. That’s called a homestead, if anything, and you can look elsewhere for whatever income you want. But here’s the thing. If you want the farm to produce your income, it’s a business. Rule #2 – Nail Down Your Competitive Advantage If the business is easy to get into for you, it’s easy for someone else to do the same. There are a number of ways you can gain an advantage regardless of what specific farming strategy you choose. Then, have a strategic reason for every farm enterprise you operate, and every farm decision you make. If your motive is profit, and it should be because this is a business, right, then you have to assess what the most profitable farm enterprise is for you and your market. If it did nothing positive for our bottom line, think about removing the enterprise Just make sure you can answer this simple question. Are you ready?. Here it comes: my farm’s defensible competitive advantage is ___________________________ Rule #3 – Select the Best “Go to Market” Strategy Before You Start If you have something to sell, there’s a lot of ways to sell it, right? who are you going to sell to and how are you going to reach them? You have to define your go to market plan Rule #4 – Avoid Debt at (Almost) All Costs So, I say almost, because debt can be used intelligently to gain leverage. But that doesn’t mean most people use debt intelligently. Balance sheets are divided into assets and liabilities. Assets-good, liabilities-bad, right? Because that’s something you owe But would I use debt to buy a tractor to make my farm life easier? Because I can’t quantify the income I’ll generate as a result of that purchase to service that debt. So no way. I’ll get that tractor when I can afford to buy it. With cash. There’s enough to worry about in farming. Design your farm business to run without debt so you don’t add that level of stress. Rule #5 – Bridge the Gap Between What the Land Needs and What the Market Needs This is both a business and an ecological rule Rule #6 – Balance Profit With Passion Okay, so we’re talking about a business, right? Not a hobby. So the point is, measure everything that affects profit. You absolutely need to know your cost of production, down to the nickel. What does it cost you, ALL IN, to produce that product Rule #7 – Understand the Full Impact a Farm Business Does Have on Your Family Employees need direction which means someone’s in charge. That means there will inevitably be disputes and disagreements. The point I’m making is that there is no separation between work and home life on the farm. It is ALL farm life. All the time. Rule #8 – Know the Difference Between Profit Margins and Cash Flow If running a business is new to you, this next statement may sound strange. But there are lots of ways a profitable business can go out of business. Or file for bankruptcy. There have been plenty of businesses that had attractive profit MARGINS but poor cash flow management. And they went bankrupt, because they couldn’t come up with the cash to service the debt. And, there have been even more companies that grew too fast, so they went under. CASH IS KING Rule #9 – Protect Your Ass-ets I’m not a CPA or lawyer so I’m not giving legal advice. See your experts for that. But, in any business, you gotta protect your personal assets, especially in this litigious society. And, beyond legal structure, get the right insurance to protect you. Rule #10 – Quit Your Day Job Close the door behind you, burn the bridge and quit your day job. If you want to have a successful farm business—or any business—get rid of your crutches. Go out and do it. Rule #11 – Start Marketing Before You Start Farming I mean, how can you start marketing before you start farming? Start selling part of your (insured) crop before you grow it. Giving yourself 2-3 marketing seasons to catch great sales prices.

Try to be the dumbest person in the room  What’s working for Ag – listener or farmer feedback  Storing Grain in grain bags with @steveconaway1  You can’t learn much from those you know more than. o It’s a challenging concept, it’s humbling, it’s scary, and it must happen! o In order to generate new ideas and bring new concepts back to the farm you must reach out of your comfort zone. Pairing new or different concepts with your years of experience could take your farm to the next level.  Just because you have years of experience it doesn’t mean you are being the most effective. Think of it as a coffee shop in town has 25 years of experience pouring coffee that tastes awful. They may be great pourers of coffee and never make a mess, but the product they are serving isn’t any good. However, if they meet up with the owner of the across town shop who has high reviews on the quality of coffee they could learn the source of the beans. They now then are great coffee pourers with a great product too just by humbly networking with someone who has been perceived as better at it. o You must approach these conversations and experiences with an open mind. We tend to get defensive about the way we do things and resist admitting they could use improvement. o Doesn’t have to only be with another farmer. Could be a farm manager, an ag industry professional, or salesman. Just look for those who you respect and command the respect of others to learn from. This most commonly happens while joining ag related boards or attending meetings to network. o Remember most of the time we are the most critical of that which we don’t understand. Rather than criticize something be curious and see if you can learn more about it. o Then take the new concept, technique, or idea and learn as much as you can about it. Then it becomes less about what someone else said and more about the research you have done.  A good technique for focusing on a new concept is the 3-2-1 method. Focus a 90 day period of time on the idea and seek out 3 books or articles to read, 2 more people ask about or learn from their experience on the topic, and try to get to 1 class or field day to see it in action.  Example: Someone shares how vertical tillage has been a solution for certain areas of their farm. Find 3 pieces of research, articles, or books to read about the benefits of the practice. Talk to 2 neighbors or network users about their experience, and try and line up a demo or see a tool in action.  Summarize o The goal is to start identifying those in your industry that you view as successful. You may not what your farming operation to look exactly like theirs, but something about their business you see as a step in the right direction. It could be their understanding of finances, mechanical ability, or cleanliness of fields. Then swallow a bit of pride and put yourself in a position to learn from them whether it be through casual conversation or an organized meeting. Once you’ve learned about what helps them achieve the success they have conduct your research and begin implementing profit boosting techniques to your farm. Kaizen is the word the Japanese use for Constant and Never-ending Improvement. Adopting this mentality with help boost your farm’s profitability.  Challenge o Identify 5 techniques, skills, or practices that you see as successful in another operators business. Of those 5 find a way to learn about two of them in the next 30 days. Then begin the 3-2-1 process on each of them and take the steps necessary to implement 1 of the techniques, skills, or practices on your farm to boost productivity or ROI.  Conference Update o  Submit questions and topic suggestions

How to form your advisory team. What’s working for Ag – listener or farmer feedback o [email protected] o @Farm4Profitllc on Twitter  Taking prevent plant with Brian Sampson Forming an Advisory Team You don’t have to face crucial decisions alone. You can get a team of experts to help you with yourfarming decisions. Where do you start? Is an advisory team right for your farm? Could it become a board of directors? Which farms or operations are a fit for an advisory team?  Many of farms are set up perfectly for an advisory team.  The one who aren't are the farmers who go at it only being their way.  For the rest of you it is a fit! How do I form an advisory team?  You start by listing out the people you think would be a good fit for your advisory team.  They maybe people you already call for advice, or they could be people you've wanted to ask before and haven't.  Then, ask them!  This is the key part, the asking.  What we have learned is when you ask, more often than not, the team member feels honored to join.  This results in more attentive listening and invested advice. Who should be on my advisory team?  This will depend on your farming operation.  We suggest starting with agronomists, accountants, bankers, financial advisors, commodities broker, retired farmer, peer farmer, lawyer, land lord, veterinarian and so on.  Each team will be different based on the needs of your farming operation.  Also, think about reaching out to someone outside of the AG industry.  As farms continue to get more complex with various entities and structures including a CEO or CFO from a corporate setting could provide unique insight. How often should we meet?  This will depend on your farming operation again!  Some of the operations we talked to reach out to specific team members with questions throughout the year and host a full team meeting in the Winter.  Depending how complex your farm business is and how formal of a role you want your advisory team to play this may be different.  We have learned of a farming operation who has their advisory team functioning as a board of directors with voting rights, they meet monthly. Do I compensate my advisory team?  The decision to pay your board or team will be your choice.  You will retain team members longer when purchasing their services or compensating for their time.  However, you can also get quality advice from the right personalities for free too!  Summarize o Start by doing self-reflection on your ability to accept criticism. Flight school pilots are separated from good and great by those who can accept criticism the best and own their faults. They are all trained the same but the best are humble. You need to ask the people to be a part of your team, otherwise they may not even have a clue. Think about your weaknesses or areas of challenge and recruit members to fill those gaps. Each farm will be different so figure out what fits best into your schedule for meeting and which way you plan to compensate your team members.  Glen Newcomer (twitter) learned about creating a when I die folder from his advisory team.  Challenge o If you have people you call now for advice, take the next steps to make sure they are considered your advisory team. Then make it a point to have regular and focused conversations about improving your farm. If you already have an advisory team together we challenge you to think outside of the box for an additional team member (CFO, CEO, HR, etc…)  Conference Update o Farm4Profit Farm Business Award – Nomination details to be on the website, awarded to the farm/farmer most running their operation like a business.  Submit questions and topic suggestions o [email protected] o @Farm4Profitllc on Twitter  Remember if you aren’t farming for profit, you won’t be farming for long.

Planning and budgeting – goal setting (Episode #2) Calving Story What’s working for Ag – listener or farmer feedback Cheap beer (focusing on family living expenses) costs from outside of farming expenses that still need to be carried by farm profitability Cutting the cable or using streaming entertainment services. monthly reoccurring charges for memberships/subscriptions that aren’t used any more Consulting with service providers for reduced rates, packages, or alternatives. (Energy, insurance, 5% changes) future podcasts Find us on twitter @Farm4ProfitLLC Individually on Twitter @IowaBankerman - Tanner @IowaLandGuy - David Send us an email [email protected] Connect through our website www.farm4profit.com Leave us a voicemail at 515.207.9640 Connect on Facebook @Farm4Profit Building an Instagram at Farm4Profit Planning and budgeting – goal setting Most often this is where it starts, just having a plan is progress even if it’s in your head. In today’s world with competition at its peak you can’t afford to not have a plan. Better yet, Write it down, type it up, enter it into a program Services available all over: https://farmlogs.com/ https://conservis.ag/ https://granular.ag/ https://www.harvestprofit.com/ https://www.extension.iastate.edu/agdm/decisionaids.html https://quickbooks.intuit.com/online/ https://www.card.iastate.edu/ Share it with others – welcome feedback Family Team members (Banker, broker, accountant) Peers Example of what sharing with your peers can gain for you. An individual living in a suburb made a resolution to exercise more and chose CrossFit as a form of exercising to do that. The closest gym to him offering this style of workout was a 30 minute commute & in the opposite direction of where he worked. After working out for 3 months he built relationships with other members of the class & shared he may need to discontinue the class because the time commitment was too long. As soon as he shared this he had an option for a route that shaved 12 minutes off the drive time and the knowledge of a new gym closer to his work. Just by sharing his plan he gained from the perspective of others. Get detailed Over all is great, but dividing down to a field by field, acre by acre, or animal by animal basis will provide insight more insight Using unit by unit strategies could result in letting a farm go, searching for my ground or genetics like your highest profit characteristics, or searching for cost reduction strategies with a more focused effort. Company from prior conference was Ag Solver https://agsolver.com/ If you can’t do it get help Or you don’t enjoy it Pay for help or get it for free (future) There will be more material in future episodes about how to form an advisory team to help with this. Also future episodes on how to get more of this service from your bankers, salesmen, and tools for free. Review it Periodically Monthly or after seasonal swings and big market movements (trade deals and crop reports and planting progress) Huge tool in considering prevented plant or crop choices Make in season adjustments Compare at the end of the year/season Keep your original plan/budget and then compare. Learn from the factors that changed and why. Summarize Start with a plan, basic. Work through the details and then share your plan with others. This will help keep you accountable and maybe share insights you were missing. Make adjustments throughout the year and revisit it frequently to make sure you are on track. At the end reflect on how it turned out and what needs to be done differently next time. Challenge What does you budget look like now? Not talking if it’s in the green or red, but does one exists. If you do have one are there ways you get add more detail or more accurate information to it? DO you know someone with more skills than you have to add insight? If you don’t have one start now to take the steps to get started on paper. Write it down. Conference Update What’s working for Ag section to be featured on 12/6/2019. Sharing the most profitable actions from farmers from all areas. Submit questions and topic suggestions Find us on twitter @Farm4ProfitLLC Individually on Twitter @IowaBankerman - Tanner @IowaLandGuy - David Send us an email [email protected] Connect through our website www.farm4profit.com Leave us a voicemail at 515.207.9640 Connect on Facebook @Farm4Profit Building an Instagram at Farm4Profit