David Kohl, agribusiness entrepreneur and business coach, offered the following checklist at the Professional Dairy Producers of Wisconsin Annual Business Conference this spring to help you deal with the economic challenges that still swirl throughout the dairy industry:
• You need a good relationship-lender. That means not always choosing the bank with the lowest interest rate, but one that knows the industry and knows your business and will ride with you through thick and thin.
• You must know your cost of production by enterprise.
• Assemble a good advisory team to add objectivity to your decisions.
• Maintain modest amounts of leverage combined with lots of liquidity.
• Have a profit plan. With increased volatility comes increased opportunity. Be sure you know how you’re going to deal with that.
• Conduct business planning. Build plans for one-year, five-year and even 10-year increments, making adjustments over time as circumstances warrant. This exercise helps communication with lenders, as well as with your partners and even yourself.