Revisit your business plan
Given current economic conditions, now is a great time to re-examine your business plan. This aligns with our comment above — that taking the time to revisit your goals gives you a chance to look at your feed and grain business’s strengths and weaknesses and align or re-align what you are doing with your goals. Can you cut margins on one or two products and increase volume and market share (thus helping to maintain profitability) — while publicizing this as your company’s show of support for customers facing tough times (a number of firms are doing this with some sort of price roll-back)?
Look for opportunities that parallel your goals. Some competitors may disappear, providing a chance for increasing your market share. You may be able to forge new relationships with other firms which are looking for ways to maintain or generate new revenue. Resist the urge to cut back expenditures on marketing and advertising, as these dollars will have more efficacy as competitors spend less in this area. People are looking for better ways to do business. If you have established strong customer satisfaction, this is the time to get the message out.
Raise productivity/increase efficiency
Our Manager’s Notebook column has always been all about improving your “bottom line,” and providing feed and grain industry managers with new ideas, tools and resources for you to use. Our current economic situation provides even more impetus for looking for ways to increase efficiencies in your firm. One way to raise productivity is to increase your reporting cycles. Consider generating these reports on a more frequent basis — quarterlies become monthly reports, monthlies become weeklies and weeklies become dailies. Information is thus available more quickly, and you can make better, faster decisions to improve your firm’s performance. More frequent reporting also leads to greater awareness of potential problems as well as possible opportunities.
Productivity boosts also come from better utilization of assets and things like conserving energy and using less fuel. Talk to your employees about making sure that lights are turned off in unused areas of your elevator or feed plant (yes, we know — sounds too much like a cranky parent — but the message bears repeating). If you have unused areas in your facility, only provide enough heat to protect anything in the room and then close it down.
Watch out for light bulb sizes that can drink electricity like water. Or better yet, replace your incandescent lights with the new style compact fluorescent lights — if you can afford to make the investment. As an example, with electricity at 11 cents/kilowatt hour (average 2008 U.S. electricity cost according to the U.S. Department of Energy), replacing fifty 100-watt incandescent bulbs with compact fluorescents will save approximately $1,200/year - $100/month! (See http://www.easywebcalculators.com/cf.htm)
Another key area where you can reduce energy use is in heating and cooling. If you are closed at night, turn your thermostat down. If you can find it in your budget, buy and install a computer-operated thermostat with a “setback” to lower temperatures when no one will be in the building. Again, at the risk of sounding too “parentlike,” consider lowering your thermostat 2 to 4 degrees in the winter, and encourage your office personnel to wear sweaters and other warmer clothes. Use the same common sense with the air conditioning — use it when it is needed, but turn it off when it is not.
Make sure that your drivers are doing everything they can to reduce fuel use when making feed deliveries or hauling grain. Depending on the size of your fleet, considerations here might be something like a GPS tracking system offered by Fleetmatics or Trimble among others (see www.fleetmatics.com or www.trimble.com).