Thursday, March 15, 2018

Avoiding the cost cutter's folly

It seems to come down to two prominant business philosophies: Either you are a cost cutter or you are a margin measurer. Never the two shall meet!

I can not profess to know much about margin measuring. Their strategies seem overly complex and rite with pitfalls. They are quite proud of their sophistication though, and proclaim cost cutting is overly simplistic. "Any jackass can be a cheap skate!", is often overheard.

There might be a little bit of truth to that stereotype. It's not that difficult to be a tight wad, but applying the idea successfully is a whole lot tougher than it sounds.

"Penny wise and Dollar stupid" pretty well sums up the typical folly of the cost cutter. Saving a penny today that ends up costing a dollar tomorrow is all too common of an occurance.

"Honey! I saved a lot of money on my last oil change. I just didn't do it!" Preventive maintenance is such an easy target. Why should you waste any money on something that is not broken?

Experience will prove the folly with that kind of short sightedness. Saving money on preventive action usually ends up to cost a lot of money later. But saving money on an oil change is an excellent demonstration of how complex cost cutting can be.

The first and biggest opportunity is with the labor to do an oil change. If you invest in learning how to do that, you will reap the rewards very quickly. Roughly half of the cost of an oil change is for labor. If you supply the labor, you will automatically save half of the cost.

If you take on the next cost, it will be the supplies. You pay for new oil and a new filter. Those are usually marked up by service providers, so you will save a little by buying your own. You can look to save there by shopping around. Be careful not to step on that slippery slope of compromising quality though. Educate yourself on what constitutes acceptable quality before you compare on price.

Just doing those two things will save you a lot of money. Most people are satistfied with reaching that plateau. Is it enough to save on parts and labor? Not for a dedicated cost cutter.

We can apply creativity to develop savings in placed that margin measurers fear to tread. Let's question the timing of that oil change. Who says it has to be done every three months or three thousand miles? That is a general recommendation espoused by the industry that benefits from it. What is the data and reasoning behind those assumptions?

You can go as far as having your own oil analyzed. Laboratory tests have gotten more common and lower in cost. They can tell you detailed chemical properties that you can use to modify your schedule. You will probably discover that it is not necessary to change your oil by the industry standard.  You might discover that the acid neutralizing properties of the additives  are the first to deplete. You can use that kind of information to change the oil, but extend the life of your filter. That is applying data to save money.

These cost-cutting concepts are starting to look more sophisticated than any jackass can do? How about sharpening your pencil and comparing synthetic oil to conventional? Or how could you save by buying supplies in bulk?

You can start coming up with methods rarely thought of. How about using software to plan your routes the way Fed Ex does? Or attending to details like tire pressure, alignment, or weight minimizing to minimize the engine load?

You can continue to go to extremes and discover new paradigms. The only limit to cost-cutting is your own imagination.


Thursday, March 1, 2018

Slogans

What is the meaning behind a slogan? What is the implied promise to the consumer? How much thought was put into it?

You can always tell when a slogan is created without a lot of thought put into it. They are shallow words without much meaning. The sole purpose is to catch your attention. But some slogans are much better than that.

What are some of your favorites? I have several.

One of my tops is "The relentless pursuit of perfection." What a lofty goal! But that company delivers more often than not. It conjures feelings of excellence and pride in production.

"Just do it!" is another exciting one. The time for action! Planning and calculating are boring, at some point you have to go for it. This slogan captures the excitement of that moment and it fits the product.

"Don't bonk!" You might be surprised that I think that was a great slogan? It was simple, rememberable, and meaningful. Unfortunately, it wasn't presented accurately and that led to its demise.

"Just win, baby!" Another shockingly simple slogan. Simple, pointed, and short, but it still says a lot. It's an unapologetic statement of a single minded goal.

"Affordable excellence." What a great slogan? It hits the peak of the market share no matter what you are selling. It implies that you get a lot for your money and that is always a popular concept.

Unfortunately, all of those slogans were taken when I started working on my own ideas. I wanted something short, simple, and meaningful with a promise that I could deliver - usually.

"Smaller bales, bigger value" was the result. It's simple and appeals to the middle of the market.  And it possesses meaning with an implied promise.

What does "bigger value" mean? It is something a little more for your money. It's a simple claim to make, but it is complex to deliver on. How do I begin to deliver on that promise?

Measuring and marketing to start with. I go to great efforts to objectify what is produced. The determination of the level of quality takes scientific testing, as well as sensory scoring of sight, smell, texture, and performance. All of those things can be scaled objectively so you can compare the market.

Comparing the market is somewhat difficult. I like to check multiple sources the same as my customers do. What is the USDA report? What is the market in the neighboring State? What is the forecasted demand? How are dairy prices? Beef? Sheeps and goats? What is the demand at the horse stables? What prices are advertised on classifieds and especially Craig's list?

It's always a difficult analysis. You don't really know what quality is actually being advertise without going to see for yourself. I make a significant effort to gather as much data as possible before I "Just do it!" and decide upon an initial pricing.

After I have a pretty good understanding of my quality and what the market is selling it for, I price. I price lower. In short, I sell the same quality of hay at a lower price. That is "Bigger Value".


Wednesday, February 21, 2018

The Unlikely Millionaire

Why did the boss man pick him to go to the town's meeting? There wasn't anything special about him. Maybe the boss man thought he was better than the other shepherds at understanding English? Maybe he was - if he wasn't half drunk?

It was the mid sixties in Idaho. The group of sheep herders rarely got opportunity to go to town. When they did, the liked to let loose and party a little bit.

Our hero was a little tipsy when he was told the boss wanted him to attend a town's meeting. He didn't understand exactly why, but he'd hoped that maybe he'd figure it out while he was there?

The proceedings of the meeting went too fast for him to follow. Things were appearing to be wrapping up and he caught a word that got his attention. It was familiar. Maybe it was what the boss man sent him there for? Quickly, he raised his hand.

It was a day or two after that before somebody explained things to him. He'd inadvertantly volunteered to provide solid waste service for the town. Hauling garbage? What?!

The thought must have occured to him to get out of that commitment. He was drunk, he didn't understand English, he didn't even know why he was at the town meeting to begin with. But he came from a very rigid and demanding culture.

Suffering was to be endured without complaint. Hard work - no matter how demeaning was revered! Every man aspired to be a noble man. Giving your word was a big deal. It had to be honored. So he proceeded with a little bit of reluctance.

The first thing he did was to go to every sheep herder in camp to ask for a loan. He had to get enough money to buy an old pickup truck to haul garbage. Every shepherd contributed to his plight and that was the beginnings of his business.

That smallish Idaho town would thrive in the coming years. Hollywood movie stars would discover the area and buy properties. Tourism took hold and the area flourished. Our hero became a multi-millionaire providing a service that nobody elso wanted anything to do with. He was the right person in the right place at the right time.

Tuesday, January 16, 2018

Our Democrat Cat

It's not at all uncommon for people to abandon cats in the country side. I wasn't surprised to find three kittens abandoned about half a mile from the farm house. As they grew and displayed their personalities, it was uncanny how well they represented our three main political parties.

I couldn't know for sure if the momma cat was dumped with the kittens. I observed them for awhile from a distance, but it wasn't very long before they found their way to the farm house. I could tell from their condition that they had not been fed; I took pity on them with milk and food.

Often times, cats dumped in the country go wild. These were obviously domestic and very friendly, well - except for Scratchy. There were two females and one male. They appeared to be siblings. The male was all grey, one female was white with grey stripes and the other female was orange and white tabby.

We named the grey male "Lost Juevos" after he was neutered. The white female with grey spots would be Nina, and the orange tabby got a name that didn't stick. She quickly earned her real name - Scratchy. We had them all fixed.

Scratchy was very independent, cautious, and unforgiving. She earned her name by refusing anybody trying to pick her up in dedicated violent fashion. It tooks years for me to gain her trust to be the only exception to the holding rule. But still, I had better not press my luck by holding her longer than her alotted time. She would cover vast distances just to accompany me working alone in the field. And sometime, she got in the way of progress.

I once had an order to deliver four tons of hay for twenty miles in the cold beginning of winter. When I began unloading the hay, I discovered that Scratchy had made the journey on the trailer. She was covered in frost, cold, and scared. I cuddled her up and put her in the cab of the pickup.

When we returned, the other farm animals could not believe her tales of the journey to the far away land. No doubt her adventurous spirit contributed to her demise. She was the first to disappear. We suspect she was kidnapped by a bold coyote judging the recent signs in the region of her regular domain.

Nina was not as independent as Scratchy; she was balanced. She was rarely late for feeding time, but there were times that she was too busy off hunting. She was lovable to a certain point. She would never lash out or scratch. She would merely keep a safe distance from suspect or overly affectionate humans. She was the smartest cat and the best hunter during her time. She paid the most taxes since she often brought her catch to the yard; it was often stolen. She disappeared a couple of years after Scratchy under similar circumstances.

Lost Juevos has been through a lot. He took the incidince of neutering like water off of a duck's back. He was always the most affectionate. Our daughter used to carry him upside down and he loved every second. He wasn't choosy who or where he got affection from, it was all good. He never met his cuddle quota. He would take it all in, purring loudly with drool running out of the corners of his mouth.

For the earlier years of his life, he was a card carrying democrat. He never did any more work than he had to. He was a fixture on the back porch, waiting for a handout, feeding time, or the chance to be pet.

He didn't go hunting very often, but one fateful day, on a rare hunting trip, he suffered a severe injury. Somehow, he'd broken a bone in his right front leg. I felt the break and considered trying to splint it, but it was straight and he was a good patient. He layed around a lot anyway and he would just lay around more than usual as he was healing.

He eventually made a full recovery. The experience had surpising lasting effect on him. He started going off hunting more! I would have expected the opposite, but his hunting career really took off after his injury. His specialty has become catching gophers. I have seen him consuming the better parts of gophers three days in a row.

We can still count on him at regular feeding time. And he still spends a lot of time on the back porch, mostly looking for affection. But he has progressed to pulling more than his own weight on the farm. Go figure?




Thursday, January 11, 2018

Some ABC's for U and I

A is for Ability.
"Ability is a poor man's wealth." Matthew Wren
B is for Business.
"Always tell yourself: The difference between running a business and ruining a business is i." Frank Tyger
C is for Chance.
"There are no chances so unlucky from which clever people are not able to reap some advantage; and none so lucky that the foolish are not able to turn them to their own disadvantage." Francois De La Rochefoucauld
D is for Desire.
"We should aim rather at leveling down our desires than leveling up our means." Aristotle
E is for Effort.
"Whatever your work is, dignify it with your best thought and effort." Esther Baldwin York
F is for Freedom.
"The basic test of freedom is perhaps less in what we are free to do than in what we are free not to do." Eric Hoffer
G is for Giving.
"No one would remember the Good Samaritan if he'd only had good intentions; he had money too." Margaret Thatcher
H is for Health.
"Health is the vital principle of bliss." James Thomson
I is for Industry.
"The way to wealth is as plain as the way to market. It depends chiefly on two words: industry and frugality; that is, waste neither time nor money, but make the best use of both." Benjamin Franklin
J is for Joy.
"Real happiness is cheap enough, yet how dearly we pay for its counterfeit." Hosea Ballou
K is for Kindness.
"In nature there's no blemish but the mind; none can be called deformed but the unkind." William Shakespeare
L is for Living.
"To live is not to learn, but to apply." Legouve'
M is for Money.
"The safest way to double your money is to fold it over and put it in your pocket." Kin Hubbard
N is for Nature.
"In nature there are neither rewards nor punishments; there are consequences." Robert G. Ingersoll
O is for Opportunity.
"An optimist sees an opportunity in every calamity; a pessimist sees a calamity in every opportunity." Winston Churchill
P is for Prosperity.
"That some should be rich shows that others may become rich and, hence, is just encouragement to industry and enterprise." Abraham Lincoln
Q is for Quality.
"People forget how fast you did a job - but they remember how well you did it." Howard W. Newton
R is for Respect.
"Reverence for life demands for all that they should sacrifice a portion of their own lives for others." Albert Schweitzer
S is for Spirit.
"I am only one, but I am still one. I cannot do everything, but still I can do something. I will not refuse to do the something I can do." Helen Keller
T is for Talent.
"Shun no toil to make yourself remarkable by some one talent." Seneca
U is for Usefulness.
"The function of man is not to attain an object, but to fulfill a purpose; not to accomplish, but to be accomplished." S.E. Stanton
V is for Virtue.
"Sincerity and truth are the basis of every virtue." Confucius
W is for Wealth.
"Wealth, like happiness, is never attained when sought after directly. It comes as a by-product of providing a useful service." Henry Ford
X is for eXample.
"Few things are harder to put up with than the annoyance of a good example." Mark Twain
Y is for Yahoos.
"It is the peculiar quality of a fool to percieve the faults of others and to forget his own." Cicero
Z is for Zingers.
"In laughter there is always a kind of joyousness that is incompatible with contempt or indignation." Voltaire

Monday, January 1, 2018

A Competitive Edge

Boy, does it take a lot of effort to best the competition? Talent and hard work get pushed to extremes, just to get a small step up.  The typical difference between the best and the runner up is only ten percent.

How do you capitalize on a ten percent advantage? That takes salemanship. It's a difficult balancing act. If you overstate your ten percent advantage, there can be misunderstanding. Your honesty can come into question and you could be branded a bragger. Understating your edge will not get you noticed. You will fall into the crowd of the also ran, despite all your extra effort to achieve a higher position.

The more competitive the enviroment, the more things can get stretched to capture attention.  Authors have to be edgy, speakers have to say something controversial, entertainers must display pizazz! The audience has a short attention span.  People are busy and don't like to waste time with the trivial ordinary.  It takes something abnormal to catch their attention.

It's got to be a red hot spark to ignite the fuel in a high compression environment. If you can get their engine started, they will spend another five seconds looking closer.  You have to risk being edgy in order to publicize your edge.

There are few experts in the world. Most of us have a broad knowledge of several subjects. Not many run very deep on any particular thing. Generalists are going to have trouble differentiating ten percent in most subject matter. To the casual observer, there is no apparent difference. What incentive do they have to choose the better option, if they can't tell the difference?

I love Amazon for this reason. They have found a way to make it so easy to compare products. I feel like an informed consumer for nearly every purchase I make. They have a quick visual rating system for the busy bodies, and you can read reviews for more detailed information. I am mostly ignorant of the variety of goods that I want to purchase. They found ways to make learning easy and quick.

When learning is not so easy and quick, it takes a commitment of time to the subject. Sometimes salesmanship is best directed at that objective: getting the customer interested in learning more. If you have the superior product and your customer arrives at that conclusion on their own, it is far more impactful than giving them the raw data up front.

Salesmanship is educational. How can you help your subjects to learn? Many people are resistant to learning. They are too busy and have higher priorities. When I detect that situation, I suggest that they make the simple comparison on price.

Price is a relatively easy comparison to make. Establish an even quantifiable measure and compare how much you get for the same dollar. It could be mass, weight, or pieces that you get in return. All other factors deemed equal, why not try to stretch your dollar? We all want the most for the money.

In the case of matching prices, we have a dilemna. We have to compare the next value contributing factor: Quality. This is often a little more difficult. Sometimes it takes a little expert knowledge to discern a ten percent difference in quality.

Most people don't have the capacity to become experts in every subject that they shop. Educational salesmanship takes a lot of added effort. Is it worth it?

It took extraordinary effort, sometimes extreme effort to achieve a competitive edge. Why not make the extra effort it takes to commmunicate that?

Saturday, December 9, 2017

How much Hay to feed?

"The more, the better!" My enthusiastic, capitalist spirit immediately responds. "I'll make more of it!"

But, seriously, in the small bales business, you meet a lot of new people. A few of those people are green and learning.  How much hay to feed is a very common concern.

The first consideration is the quality of hay.  It stands to reason that the better the Relative Feed Value and the higher the percentage of Total Digestive Nutrients, the lesser the quantity is needed.  Hay quality can vary widely from farmers to farmers, field to field, and cutting to cutting. There are scientific methods for measuring quality, but most people are just looking for general guidelines.  I have over a decade worth of experience feeding cattle, horses, and sheeps.

Horse nutrition is the most complex and intimidating.  There are volumes of books on the subject. Mistakes are expensive. I will only share the most basic observations of horse feeding and recommend further study on the subject.

I have more confidence with sharing tips on feeding cows, sheeps, and goats.  The starting point that I recommend is 5% of bodyweight.  It's easy math and gets you in the ballpark.  Take a 100# ewe for example. 10% is 10#, just move the decimal then split it in half.  So, 5# would be my daily ration to start with.

I recommend feeding twice a day, so you would feed half of the daily ration in the morning and the other half in the evening. The reduction of waste over feeding once a day is significant enough to warrant the extra effort.

When herbivores are fed a large quantity, they pick through it to get their full of the sweetest stuff.  When they come back later to eat again, a lot of the good feed left is soiled and they will not eat it.  In those instances, their fiber intake suffers and you have to feed more to make up for the waste.

I stress 5% as a good start, because of all the other variables.  The weather, the animal health, alternative food stuff, supplements, and hay quality are all factors.  The good news is that you can observe your animals' behaviors as indicators to offer more hay or taper back.

What is the interest at feeding time?  Are they overly enthusiastic?  Are their feeders empty?  Do they stay in one feeding spot or hunt around?  All of those observations can tell you about how much you are feeding. Horses, however, are unique in this aspect.

A horse's favorite pastime is eating.  They will eat all day, every day out of boredom.  Left alone in a sufficient pasture, they will eventually turn it into a nuclear waste land.  1) Don't mistake a horse's enthusiasm as hunger. 2) Don't judge their clean feeder as insufficient. 3) Volume by body weight and body conditioning are probably your best indicators.

Cows, sheeps, and goats won't eat all day long.  They stop when they are satiated and will lay down, chew cud, and meditate. It typically takes about four hours out of the day for them to get their full.  If you are feeding twice a day, you should see them losing interest after a couple of hours each time. If they are taking longer, that should be considered with other indicators that you may not be feeding enough.