Financial Advice for Optimal Farm Management

Timestamps & Summary1:30Tell us more on your journey in creating success strategies. How did you get there, and what you found along the way?Dr. John EllsworthI’m happy to share. Success Strategies is actually based upon a business plan that I wrote with a team of fellow students at Duke University when I was working on my MBA, and in which I finished in 1989. Great program. I had a really good team of people around me that worked with me on developing this entrepreneurship business plan. It took me 10 years to get it off the ground. 10 years of fantastic learning in corporate America. And what it really helped to do was position me to understand both sides of the equation: The borrower, the dairyman, whom I was very familiar with from prior career roles, but also from a lender's perspective.4:43When it comes to financial management, what are some of the challenges that you see when working with your clients that are fairly common?Dr. John EllsworthOne of the biggest is literally understanding your cost of production. Not just as an accounting function, but rather being able to anticipate future trends. It's thinking about things before they happen, because the reality is things change, and we need to move forward.Along that same line, knowing your breakeven levels for milk production, feed costs and milk price are crucial.Setting objectives for your business driving forward with a plan that we are pretty certain will work.Working closely with your banker to get the intended objectives and keeping them in the loop, keeping them informed.7:24You wrote a paper about the top 10 Things Every business person should know. And one of those points was knowing what your banker is thinking. Could you tell us more?Dr. John EllsworthIt's required that we keep the banker in the loop at all times, about three items in particular:First of all, what you're planning to do, how you're going to do it, the steps you must take, the plans you have, and when you hope to complete it.Second, you need to come to grips with your banker. What you need in terms of financing, and does it make sense for your operation.What are the costs versus the potential benefits of this change?9:41What would be the key take home messages about working with a bank relationship and enhancing that, that you'd like to leave with our audience today?Dr. John EllsworthNumber one: As a former bank manager wisely advised me, if it were easy, everyone would be doing it.Number two: It really doesn't matter where you start, what matters is where you finish.Number three: I would say use your advisors wisely.