Financial success is aplenty if you look for it. From an early age, I have been cognizant of learning from seemingly unlikely sources. Business philoshophies and strategies have always peaked my interest. So with my parabolic reciever aimed in that direction, I have gotten a lot of repeat strong signals leading me to believe there is some truth to the matters.
"First, we find a way to make money, and then we just do that over and over again." It is a local rancher's recipe for good business. Seemingly simple, the first part can prove a lot more difficult than it sounds. Especially in agriculture when it can be like hitting a moving target.
You can be profitable one year, do the same thing and lose money in consecutive years. The lesson in that realization is to expand the definition by finding something that works more often than not.
The second part of that strategy is just as challenging. Controlling all of the variables to ensure a repeat performance can be very difficult if not impossible. I think the key is in stocking away a surplus to help you make it through times when forces out of your control are against you.
It might be stated in other more modern words: "Follow the money." If you have found a profitable business, say in selling beef, don't modify your whole operation to start selling hay. It sounds like simple common sense, but this mistake is made in all levels.
Remeber when Coke changed their original recipe? They had an established winner, but thought they could do better with "New Coke". The resulting fiasco caused a significant loss in market share and a prompt retreat back to what was working.
"First we ask how can we make it better. Second, is how can we make it cheaper." This was the simple guiding principle of a NW food manufacturing equipment manufacturer. I fell in love with it's simplicity, but it is very difficult in application. Especially in the high tech business they compete in. Nevertheless, it focusses on two important business goals: quality and cost.
The competitive nature of business requires improvement. How can you do it or make it better? Creative thinking and engineering really pays off here. But do not forget about the second part!
Anything in the world can be improved if money was no object. In business, money is the objective - so making it better economically is what's important. Making it better for less than the competition is a fundamental advantage.
"Now you boys always remember this: It's not how hard you tamp a post, it's how many times." That old cowboy at my very first paying job was referring to more than building fence. Henry Ford implementing mass production as we know it comes to mind. Quality gets so much press, but quantity is just as economically important.
Many higher profits can be attributed to mass production. High yields and big numbers can cover up a lot of little problems. The bigger your production numbers the lower the cost per unit. Don't try to do things in one big effort. It's the sustained effort that is going to add up.
"The more junk you've got, the more headaches you've got!" I heard this repeated from the same local rancher many times. It illustrates the importance of simplicity of design. The fewer moving parts in your operation, the more robust it becomes.
Accountants value this as return on assets (ROA). The more efficient you are with utilization, the easier it is to be profitable. It's not what you've got that counts as much as what you do with what you've got. Make the most of what you have before you go out to upgrade your "assets".
"Grease is still cheaper than metal, last time I checked." I saved this bit of wisdom spoken by another local rancher as my favorite for last. My whole professional career was based on this premise.
The more sophisticated and better that I became at preventing problems, the greater my worth was realized. "An ounce of prevention is worth a pound of cure." is another way of saying it. It's about working pro-actively to attend to small details before they multiply or grow into major events.
Grease is cheaper than metal and so is paint. Wax is cheaper than paint. Armor-all is cheaper than vinyl and molded plastic. Do you feel like you are vainly wasting your time by waxing paint or armor-alling seats and dashboards?
Why not change a hydraulic hose before it blows? Waiting for failure is going to still cost the hose plus the oil spewed at $12/ gallon and worse it could cost you a new hydraulic pump if it runs dry long enough!
To summarize all these tidbits: Attend to details so you can fully utilize a few assets to mass produce a better product or service at a competitive price that you can usually make money at. That's all you need to know to make a living in the intermountain northwest!
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