Here’s something every dairy farmer thinks about but few discuss openly: At what point will I need or want to walk away from the business? And with the total unpredictability in Washington added to the spike in feed costs, everyone should be reviewing the books to see what the future may hold.
Oftentimes, however, the emotional lens we apply to anything that we love to do can color our vision.
“Recognizing success is relatively easy, compared to diagnosing failure,” says Les McKeown, author of Predictable Success: Getting Your Organization on the Growth Track — and Keeping It There. “At the heart of the issue is a simple question we've all found ourselves asking: What would happen if we simply gave this initiative more time? Or tweaked it a little? If we persevere, will it succeed eventually?”
McKeown offers these steps to help you see your business clearly and execute a shutdown should that make the most sense:
- Set bail-out parameters ahead of time. It is crucial that all business owners set clear, actionable plug-pulling parameters ahead of time, McKeown notes. “If, going in, you're not very clear on what the precise bail-out points are, then when the pre-success indicators aren't met, instead if having a clear-cut decision to make, you'll find yourself surrounded by a sea of anecdote — and remember, anecdote is not data,” he adds.
- Make tactics modular, not binary. When the going gets tough, many dairy farmers will switch tactics in order to boost their profit margins. But these tactical changes and the results they must net need to be spelled out in advance, McKeown says, so that a business manager can evaluate whether this tactic is working or simply postponing the inevitable. “The point at which it's viable to switch tactics to keep a stalled strategy alive will vary from case to case, but the key is to be clear in advance the precise circumstance under which you'll make that switch, and when you'll pull the plug,” he adds.
- Ask a third party who has no vested interest in the outcome. That’s not the next generation of dairy farmers at the dinner table (assuming you have those), and it’s sure as heck not your banker. But strategic clarity is paramount in cases such as these. “To know clearly when it's time to pull the plug on a strategy, or when it's worth persevering in the hope of achieving success, the biggest favor you can do for yourself — and everyone else involved — is to ask someone who has no vested interest in the outcome,” McKeown says. “You not only deserve that degree of objectivity, you need it.”
Of course, another side of this question has to do with the emotional and physical cost. Business writer Jim Casparie reminds us to check in with ourselves with questions like these:
- “What am I sacrificing, and is it worth it?” (Does your spouse still support and believe in your dream? Are your relationships with your family, relatives and friends still intact? What sacrifices has your family made for your dream, and do they think it's been worth it? What has been the total cost of this project in terms of lost income, savings, loans, missed opportunities and so on? When you add it all up, does it still make sense?)
- “Does it still give me joy?” (Do you ever think of doing something else? When you're being really honest with yourself, have you thought that maybe you're just doing this to prove you can or (worse) because you can't admit you've failed? Are you afraid of disappointing yourself and others who believed in you? Are you afraid to admit it just isn't fun any more?)
- “When you're being really honest with yourself, have you thought that maybe you’re just doing this to prove you can or — worse — because you can't admit you’ve failed?” Casparie says. “In the long run, only you will know if it's time to give up the ghost.”