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02 Business Basics

Kevin Brown



  • January 13, 2021
    9:30 AM
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Thanks part to Keven Brown. Ok let's go ahead and get started here on module number 2. Module number 2 Ivan titled demystifying the budget this isn't the 1st time I've talked about budgeting and one of the things I've noticed over the years is that there's a certain reaction when I hear the word or when I say the word budgeting that kind of mimics the look on this takes face. If you confess to having that reaction to the budget you don't have to confess it's Ok so this person has just got it. I can't tell if that's his or her but anyways their 1st exposure to what looks like a lime in the hand there and so that's the reaction to the face and I thought it was particularly colorful and thought it might be interesting to share at the beginning of this module so what I'd like to do is tell you a tale of 2 companies both of these companies are companies at which I've worked and they had very different approaches to budgeting so let me tell you the story 1st and then I'll tell you the point of the story the 1st company is Simpson timber company Simpson is located in Shelton Washington. And it was in timber land it had several 1000 acres of timber property that it owned it also had manufacturing plants related to forest and wood products 2000 employees it was a fairly sizable company. Had a 100 year history it was family own but it actually started back in the late 890 s. with the founders all Simpson acquiring timber land property near the current headquarters of Shelton Washington and in Simpson timber company. What they did was they had an annual budget and in addition to the annual budget they had rolling quarterly forecasts which is just a fancy way of seeing a quarterly budget and every month when the financial statements came out all of the division controllers and whoever was responsible to help them with their jobs had to come up with reasons why the actual results varied from the quarterly budget and the annual budget and they had to give updates and so at Simpson timber company there was one person on the corporate staff which was where I worked was in the corporate staff whose entire job was the budget the budget and the rolling quarterly forecast that was a level of investment in budgeting that I had never seen anywhere else it was really intense right there was a lot of commitment to making the budget right and communicating all the right you know numbers and words to explain the numbers and all of that and it took one person full time plus you know the commitments of several of the operating staff in order to maintain that system. Then there was Dell Sun Lumber Company which is where I worked immediately after I was done at Simpson Delta lumber company was also located in the Pacific Northwest just down the road in a lumpia it was a lumber producer much smaller company about $120.00 employees with a single production facility right in the area where they were. It was also family owned it had been a business for I don't remember how long at least 30 years and I can't remember if it had a history beyond that and it was also a family owned the family unit that owned and controlled it was much tighter than the Simpson family because the Simpson had multiple generations and you know how the family trees expand over generations so their group was actually much larger but still it was all family owned at Dulce a lumber company we didn't have a budget. The owner of the company knew his operation he was out in the mill every day and then in the office with us you know numbers types people in the afternoon every day and he didn't think he needed a budget so he just managed the operation by walking around the floor and seeing what was going on in the production facility and then coming back to the office and asking us questions about numbers and and you know should I buy this piece of equipment or whatever and we never had a budget in the 4 years that I worked there so Delfin Lumber Company was kind of on the opposite side of the spectrum so you have no budget and then you have what I call like the most complicated budget nuanced thorough budget I've ever seen in the world that's the tail of my 2 companies for most of us most of the time budgeting that's useful and helpful is going to be somewhere in between those extremes Ok. What I'd like to do now is just draw a point out of that and this is the key point of this whole module remember that budgeting is a process that produces a product so there's both a process that you go through in a product that comes out the other end sometimes you learn more from the process than the actual product that comes out sometimes both are very important but the budgeting process and product are tools. Whose proper use is determined by the present need of its users so the point of all this is that the question you should ask yourself about a budgeting proud about your budgeting practice is not am I doing it right but rather is it helping me to meet my goals there is not some monolithic standard or ideal budget that works across all people in all situations it's a very personal customized tool and so the way to understand it and use it is to understand your business needs your business objectives and then say how can I use a budgeting process or how can I use the budget that results from a budgeting process to help me achieve my goals Ok so in just a minute I'm going to make sure you all had a chance to take shots of the slide looks like everybody has now. I'm going to go through a list of a few things that a budget could be used to do this is not a comprehensive list it's just a few things often a budget is used as a plan that's most of the time what it is it's a plan for the future and as part of that planning process in the budget you will anticipate or provide the details to support decision making about limited resources right so when you go through a budget usually you have less money than what you want write every budget I've ever gone through we wish we had more money to spend on certain things so you have to start thinking what's most important That's a capital allocation process where you decide what's most important what's most likely to help you achieve your business objectives that's a use of a budget if it helps you think about that and get those priorities clear in your mind so that when those distractions come throughout the year you will remember why you chose what you did and then you'll have you know that direction and that focus sometimes opportunities come up during the year that are actually more valuable than what you anticipated and you make a change but it's that process of deciding where can I spend my money in the way that it's going to best help me achieve my objections. My objectives objection to something else my objectives right so thinking about what's most likely to get me to the point that I'm headed towards this can also include one nonfinancial stuff right so we talk about budgeting often in the context of money I find honestly that budgeting works very well at potlucks Ok so when I approach a public table one of the 1st things I like to do is walk down the table from the beginning to the end and see what's there otherwise what happens I put in by Play this is sell looks great I pull the whole plate with sell and then I get down to the Donny and there's no room that's not good Ok well I was a little bit of fun but anyways it does work in non-financial settings to. It can be helpful for communicating efficiently and that was one of the reason Simpson had such an elaborate budget right so the management was located up in Seattle they had manufacturing places in Shelton they had one in an outlying part on the Olympic Peninsula and they had some in Northern California so communicating efficiently about the results of each of those places was an important piece of them being able to manage the company so it can actually help with communications in certain settings it can be useful for educating right so sometimes it might be you know educating a family it might be educating a superior might be educating a board in my last job I would use the budgeting process regularly to educate our board about the particular financial dynamics that affected our company and what things they should be paying attention to and my my vision So anyway that's another possibility it can also be used to answer a specific question so sometimes there will be a budget not about the whole company but a budget for a project the ever built a new home there's usually a budget at least the contractor if they're good will have some sort of a budget to support that or any number of things so it can be you know narrower in scope and just answer a specific question Ok So again we'll follow that same pattern I'm going to give you a little bit of case history on better together farms just so you have something in real life that can guide your discussion about a question the following about knowing the score in your own situation so as you remember. From the last module the record keeping that the family had had been spotty and had mixed records it was similar in the farm until about 2018 when as Vivian shared earlier they made a commitment to more contemporaneously recording their transactions they adopted Quick Books for farm operations in 20182019 in 200-1000 they achieved breakeven operations at about. $40000.00 plus or minus a little bit in sales so that gives you a little bit of a a sense for the scope of the operation there had been up to that point no written budget no specific concrete financial plan for the farm Ok so that's kind of the case history that we had with them up to that point the 1st family budget was produced in April of 2020 you heard about the out just before the break from Vivian So here's the question that I want to pose for you to discuss in your groups and then we'll follow that with a little bit of large group discussion and then it's going to come up and tell us what actually happened in the case of better together farm with respect to this whole conversation here's a question how well do you know the score for your farms finances Ok so if you are on a farm or if you are contemplating seriously considering being in a farm what you should answer what you should think about is my farm financial records my budget whatever it is is set up so that I know where I'm at I know where I need to be and I have relatively quick information about whether or not I'm achieving those goals that's what I mean by the score Ok And so if you think about a contest of any sort you know a soccer game or a basketball game or whatever if you know what the score is and you know how much time is left in the game it changes your strategy right. If I'm behind by 3 goals and there's a minute left I might take some more risks than if there's 30 minutes left right that's the kind of thing I'm talking about you know enough so that it can guide your strategy your decision making that's the whole point of having these financial records and budget in place so how well do you know the score for your firm's finances again a scale of one to 10 want to have no idea 10 it's very clear and then some of these follow up questions if it's a one on the lower end of the scale what could you do to make it more clear what would be useful in your situation and if it's pretty high on the scale 89 or 10 you know what are some of the the choices the investment she made to get to that point and as before if you have a situation that makes sense for you to answer this from your own lens do that if not put yourself in the shoes of better together farm in where they're at and what you're learning about their system and think about how they would answer this so yourself if you've got the if it's a good fit if not answer in light of a case study it will take about 5 minutes to share in your group so let's go ahead break and your groups and do that now Ok folks let's go and draw those conversations to a close and get ready to reengage with a large group. So we'll take just a little bit of time to have maybe one or 2 people. Share and then we need to press on otherwise we're going to get behind in our agenda so any volunteers or anybody that you want to volunteer and I actually recruited one Go ahead Rick you've got somebody right there. Excellent thank you for sharing that and let me just underscore that point I've invited Robert right in front of you there Rick to share next on this and make a comment then one by Robert to share keeping the score isn't the same as winning the game right if I know the score but I'm still losing I still have to go play the game I think maybe that's a fair restatement of the point you were making excellent point so bunching is just one of the tools but it's not the answer to the big picture and I think it's very appropriate to keep that in perspective Go ahead Robert Thank you excellent Robert I appreciate that Ok I'm going to invite Aubrey to come up now and tell you a little bit about what actually happened on better together farm with respect to this topic. Farm budget so well like you've heard about a little over a year ago I took over for a moment I want to bring in kind of a team project and then when she started taking over the family finances and getting that organized I asked if I could just take over from writing in. So that's how I got involved just a little background on me sort of personally I was training in video production and I probably by nature and much more in question. So for those of you my in the listening and they're concerned about you know I'm not really I'm not a person I'm not really known as the person I was I'm right I was right where you are. Through with you my good very good friend who is an accountant and kind of launched moment. To you that I have become much more of a numbers person and I learned to get excited about digits. And so they were in the business of so Mr q. and a celebrates that he has. Transformed he transformed into more of a creative mind into more of a. Not really no no no. That's just a little bit of my history so if you're there there is hope for you this is talking to you and he can actually afford to fight I have actually come to enjoy a long ramble a lot more of the good deeds that I nineteen's when it comes to keeping track of the finances so what I have on the screen here if this is. A part of our budget. The question was. Those are even posed to us at the beginning of last year was you know how do you know you have a shot at making and making this farm go so the 1st step to figuring that out was figuring out what did we need to live on which my mom spearheaded and figured out with those big expenses what we need with the 2nd thing that we'd figure out was what are our farm expenses what are we what are we going to be looking out forecasting as far as what we need for 2020 to meet the farm so fortunately. 2018 I had done the record keeping and we had really great record of our expenses for 2000 acres. So what we did was simply. Take our take our expenses from the opening scene and then we did this property that we had had several months worth of expenses that we could then use for what our budget would be for 2020 and we went through that for all what you're seeing a year or consumables of their severance sections of our farm expenses that we just went through and we just based off of last year and where we were thinking of going this year we had 4 months into the year when everything we get and that landed us. With the number that you see you're all right so in community are told one of them says we're going to 4 dollars 44 dollars and 50 cents a week for half or 2020 that we spend 40 $3855.00 That's what we give ourselves like it was so in order to figure out what we needed to be made on the farm. We took our ball for our expenses project for expenses while those are the only living expenses and that was $6605.00 that we needed to make as a farm in order to be sustainable in 2020. So. Total farm expenses plus total living expenses equals or grow old make sure we're not going to be. In trouble at the end of 2020. So we've got that established we know how much we need and 2020 now the question is how do we figure out if the farm has a shot at being able to cover those expenses how do you do that you know how much you need to make how do you know if what you're given going to grow gives you the potential of being able to make that progress. And. So I'm going to show you how we got to that answer ourselves and I simplified our spreadsheet then be used to give you an idea of how this works. And we did that for every single right of who are leaving. To go over the top one 1st the bottom is the exact same just with a different crop so. When we were sleeping around was how much one bag of beads would heal approximately and you can get this information. Use this is based on the. Us. And we have that information you can contact my brother afterwards if you want to know how to get you can probably Google it quite a bit so already the. Words are bad and there is a little bit of math that you need to do we are farmers very standardized we were very intentional as we started to get serious about this to make sure that everything we grew was standard nice it would be really easy to do now because fortunately we have the unfinished business we grip that we grow your situation might be a little bit different your beds might be different lengths different shapes different sizes something to consider if. There are over 100 feet long and so we knew by a little bit of math that for. $5.51 pounds of beans from back that is the yield hours now. And you have been farming it and you know on a time. You probably experienced that when you plant and that is something you're not going to get 100 percent production and then. In other words you're probably going to feel that planting in some degree or another it's not going to be perfect that's our story for pretty much everything that we grow it's not perfect and. You know that Ok so you're going to want well let's take it at 65 percent So say we get 65 percent of that yield our age what number is that what is that So 65 percent of $5.00 so we say Ok so we get at least 65 percent production rate off the stool the average We're going to expect to get around $300.00 pounds of beats out of our bad. This making sense so far Ok so then what do we sell our exact account so assuming we saw a 100 you know I don't want you to be you know this is how even the best to be do everything in your life and. They actually go on with No I don't know if you come. Close to your Congress even the cons of the group looking at Jackie granny $537.00 for a bad for that that impedes right and then the question is Will how many bags of meat so you can be growing real here so for us we're going to be growing 7 bets worth of beets throughout the year so then we take that $537.00 multiply it by 7 and I can check the revenue of $3700.00 in beads for 2020. And that's that's exactly thing that we did with we. Feel sorry for our growing size $1200.00 pounds of sleepers we're budgeting that will say we get 65 percent. $760.00 pounds multiply that by a price of the solar $4.25 that's $3043.00 back how many beds are we growing this year to projected revenue 6000 and $86.00 on sleepovers for 2020 and we had around 30 ish varieties of product that we're planning on going this year we do this exercise for every single product and so at the end of the date. We have a court injecting drug using that 65 percent of 127-4115 dollars. And in our poll that we call a 68605 so you can see from our projected growth and our poor revenue that needed to have a fire in the fire going making her family survive and her only survive we had pretty good margins right there that's a pretty significant difference. So if that's what I have. To do beat to be transparent. We. We just finished finished our book for the year we just finished all of our reporting and analytics and whatnot we estimated that we actually have around. A little less than 3 percent. So you see the 65 percent number. That's what we were that's what we were that's what we were using and now we knew we likely would not get 65 percent but that was enough to be used and so that actually going back and looking at New York what we're doing our utmost to me what was that looking like 30 percent success rate so you take that you already knew no actually because of a 30 percent or so. That just kind of gives you an idea of where we were or where we where we are and where we finish 2020. 1 of our only going to give a reason for the farmers to get out of on that 30 percent up to 40 percent or 50 percent or 65 percent so that's a class for another day of my brother in sort of science group that's probably one of the ways that's definitely one of the ways we're working on improving the number but just so you kind of understand the process that we went to to understand if we even had a shot of the so. Mr Keegan. Thank you Audrey and again just to underscore the message that Aubrey gave entire back to some of the things I shared in the beginning this was an example of a budget that we did in order to answer a specific question did you pick up that connection is already went through her words to get the question we were trying to answer is that even possible this is farm have a shot because if it doesn't and the budgeting process demonstrated that there was you know virtually no chance for the cropland they had to cover their expenses then there's a chance for them to have that consideration of to even stay in this business and if you can't stay in the business it's a lot better to discover that early and make an alternate plan than to wait till you're in the hole that was a whole exercise and there was good news for them and I'm very optimistic about their future but it doesn't always turn out that way that's what the budgeting process and on Vail if you go through the exercise Ok so would have allowed a little time for questions and answers we can take maybe 5 minutes or so this is open like anything in this module or the last module or any generalized questions Is anybody want to ask a question go ahead Tony if you're talking to Mike thanks. So much. For. You and How did you get your. Magic Mike do. You think that. We. All. Know. What. I did wrong and you know you're going to. Be right. Here. And. There. Then. I don't have a good hitter or the there is a sense on what they have the me you know if you're going to the number there or the number that has a mind that no whatever the number of hits to the point is that. If you are 65. And you fall right. The key is about making sure you settle on a 65 percent of what we need is all so different that in some ways we have more pros than we have now but there are other wherever you are while short we're going to have much more potent purposes we have a much bigger market than him then we have to hope and so that shows unequivocally this is one of them has acquired that Mrs Hill if the 1st one home what we're looking to do with one worship is that one of them was it was it the other. You know how hard it. Was there was very little there by a lot of help and help and when that's when you were next door but I didn't know you don't but I would say What were the real one other than the this isn't if you have it is if you have the same answer. You know there's been a point while we talk of primitive prices. That we have suppliers that it. Has gone to help you go to court it is a supplier for us. Usable which I have to sleep or rest in uniform and that might be put in the refrigerator and one of the room where they're going you. We could go on. But we're going to move. On with. What we want with you and. No longer want to keep going back maybe. We. Know what. We're going to go. For. Now but thank you other questions. Christina right. Like it was like. We made. Me and. My Christian her project was. On the bed. And Sasuke overhears out and when we did it you go and stir here you cook and then. You know respond over. Words he did my writing you. Know yes it's a very good at it very real oh I really am back live. X. yet if. You go one that leaves out part way ahead. It's kind of a similar experience right thing where you could not take a really close attention. And run you have your 2nd broken something moving was the one thing next year we plan for a less and need for the lettuce that we want to meet with this local things to eat out. Here for a soda can was a really. Good products to get off in terms of the meat it is worth if. I was in the quarter was. There a lot of these. I don't know yet but I wouldn't be here and. I think you have conversations that you know this is your way Ok we're not going to see the do good make that was what it was Ok to have places oh not to mention the last week break out and so yeah it's really trying to figure it out and then you know when we have one thing each week he had. An awful. Lot of the seat. That. I would just follow Aubrey's comment from the perspective of one who's brand new in the business if you're thinking ahead about what you can get done you probably won't be able to get as much done as quickly as you want it'll be more painful to get it done and it will yield less than what you think that's been my experience and for me the word onions comes to mind but we all have our store and we do and they're all painful So anyways good question. Right here. On the right you know. What. I will go ahead and if you take a next question. Whoa whoa whoa. Whoa. Whoa. Whoa. Whoa whoa whoa whoa whoa whoa whoa whoa whoa. Whoa. Whoa whoa whoa whoa. Yes we're getting ready. For. The. Last one here go ahead. You know. All answers and you can follow up you know there was no Labor budget the only there's no employees so all the work is done by family members and so they just haven't budgeted labor essentially you can think of the family requirement that $2750.00 a month as your labor compensation that's the closest association we have but they don't have a labor pool that you want to follow up with something. Yeah I don't think we have numbers on that you guys have something you haven't told me about no. Yeah but we don't you know it would be a good good endeavor and if you find a quick and efficient way to do that that works in the context of a busy farm I promise you these guys will be interested I will too actually you know so is it a short one John Ok go ahead. You know. All of. You want to. Go out. Yeah. But if. You're. On. It is it if. It's loaded or. So it's set up like a spreadsheet but it sounds like it has like some database properties. Yeah. Personally. I think you have. The same regard. And that could be any kind of like your. Sister you don't have your information to someone here I think you can ask somebody you. Like what's going on I was going on it certainly. Not. Like oh. Yeah. Right. I want to write. Ok thank you we'll have one more q. and a session at the very end so if you didn't get one if you have a question get answered hang onto it will try again here in the next the next session so moving on to module 3 we're getting out of the directly financial and accounting pieces and we're going to talk about a module that I'm entitled getting paid but you'll recognize that very quickly is a module about sales and marketing getting paid just makes me feel better about talking about it because sales is something that I would say it's not my favorite thing in fact you may recognize this picture is related to the one we put up just at the beginning of the budget session Yeah that this is the way I felt about sales over the course of my life right so some people don't like budgeting I don't particularly enjoy sales now I will say that over the course of my career especially in my last job where I shared an office with a marketing guy for several years that I started to make peace with it a little bit I learned a little bit of the lingo one time I mean actually called on a customer and had a successful sale and that actually gave us not bad you know I can see why you know people like you might actually enjoy that every once in a while but I never got converted I'm still a finance guy anyways just having a little bit of fun with it but one thing I will say in all seriousness is I learned a lot about not only how critical it is to the health of a business but how much of an art form it is to do it well and there's a big difference between doing it well and doing it only mediocre It makes a lot of difference to the value of your product in the success of your business so it's worth spending a module on even if all you're going to get to hear from me is an accountant's perspective on sales Ok so I'm going to share that with you just to tell you a little bit about how I learned to think about sales and selling and then we'll have a another discussion question period and you know before the module is over probably after the break you get to hear from Ricky and that's good news for you all because Ricky actually is a sales professional that's what he did before he went into full time farming and so he'll have some good things to share about their Experian. It's Better Together farm with respect to sales Ok so no surprise I would start out a conversation about sales by putting up the 1st 2 lines of an income statement that's what accountants live for his financial statements in this income statement 1st these 1st 2 lines from an income statement are what I'm starting with but for me they provide a very simple lens through which I've learned to look at sales and selling questions and ideas that for me is very helpful so I just want to share it with you hopefully it can maybe be useful to you in some context or in some way so these 2 lines net sales less cost of sales you'll recognize is the 1st 2 lines on almost any income statement you'll see for any organization and I'm not going to use the cost of sales definition that you typically see in a financial statement but it's close enough for what we're doing today so net sales a simply the amount of money you take him and I'm using that line to think about the value that you can create and we'll talk a little bit more about the value proposition value creation in just a moment but that's the value side of the equation and then the cost of sales I'm thinking about just the direct cost of selling Ok so the work of promoting your product or the work of packaging and delivering your product or the work of taking orders or answering customer service questions there's a whole sales effort that goes around generation of sales for your product whatever business you're him and there's costs associated with that activity that's kind of my 2nd line right so when there's a sales idea or a sales conversation going on I'm asking myself questions in one of these 2 domains so I'll take just a couple of minutes and we'll dive into each of those a little bit more when I was sharing my office with Dan the marketing guy for the last several years I heard this question What is your unique value proposition I think more than I heard any other question when he was talking with staff right they were. Asking the question why would somebody want to buy our product and their answer to this question forms this unique you hope it's unique value proposition right you hope that you bring something to the table for your customers that they can't find anywhere else or at least they don't find it easily that's your unique value proposition and some of the things I've learned that can contribute to what that value is are things like put up a few of them on the slide it could be product or you know you have the best product could be where it is your more convenient for that person to get it or the price you have the best price those are kind of the standard marketing things I remember learning those in my marketing class back in college but some of the additional things that I learned through the process of this sharing the office and hearing all the sales conversations and that that is that there are other things like relationships where you likable sometimes people buy stuff because they like the person they buy it from and they may not have the best product or the best place or any of those things but they really like the person that's a way that you can create value for your product and it's one of the way the things that the silos excel at they would never say that about themselves but I will say it about them and they have some of their customers I'm convinced just buy from them because they like the cyber so much so they've used that to their advantage. There's a connection to the customer's identity right so I remember I don't know 3 or 4 weeks ago the farm was having a little event at a business location in Ardmore and I didn't hear this conversation but I heard a report about it later some guy came through and he was picking up his order of organic vegetables which his wife has ordered and he was looking at some product list that showed I don't think it was for the I think it's for a partner of the farm that showed a list of vegan options and a list of nonbeing options and so I think it was Aubrey asked him here's a list of some other things that are available you're interested any of these Remember he said he looked at that list and said. I'm a cattle farmer What's this vegan stuff right was that something like what he said people make buying decisions based on how it well it fits with their concept of themselves right and so creating value can sometimes be as simple as understanding what that identity is and how to align your product in the customer's mind with that identity right now that can be a challenge in a place like Oklahoma where there's a big you know meat mean potatoes culture but even in our place there's a lot of people that don't identify that way they identify with the kind of stuff that this farm produces So anyway it's another way to create value you can provide outstanding service you've probably been on the receiving end of this and when somebody responds quickly to a question or a complaint that you have and takes care of your problem and makes you feel good for calling makes all the difference right so I imagine you probably already understand what we mean by that networking can make a big difference as well the farm better together farm has just started to experiment with this in the last little bit there's another business in the same town where they're located they started to do some joint things together with but there can be a network effect if you can bring to the table not only your product but something else that the customer wants it cements or strengthens their connection to you and your product your business. And there's lots of other things I put in print this is don't be afraid to ask what I mean is don't be afraid to ask your customers why they buy from you what is it that they really like and if you're really lucky or you're really persistent The best thing to do is to find people that don't buy from you and ask them why they don't buy from you or what they could do or what you could do to make them interested in buying from you so those are all things that are tied to that that 1st glimpse you know what's the value proposition that my product my farm can provide my customers then what does it cost to deliver that value and again we can think about this broadly I'm focusing in this particular conversation on the selling cost but there's all of the product cost too and so you have a whole operation to produce the products so you can we can think about that that's just beyond the scope of what we have time for this morning so here are some things I've thought about in terms of the cost structure it makes a difference whether the cost you're thinking about is variable or it's fixed so as an example of a fixed cost we have ordering software and we pay a certain amount of month for that software regardless of whether we sell $100.00 or $1000.00 or $10000.00 that's an example of a fixed cost Ok a variable cost is like the little bags you put the vegetables in when you're making an order we use the amount of bags that we use is directly related to how much we sell it's that kind of makes sense so when you're thinking about cost that's an important distinction to make to understand how the cost would behave with respect to changing sales levels. Here's a couple of things supplies equipment and infrastructure those are all things that have impact on your cost structure a couple of others I wanted to add that aren't quite so quantifiable but that are equally as important is time and several of you have asked about time Rick least a couple of you have asked about time in the situation like what the Cylons have with their farm I would say this is a critical resource and so be conscious of how much time it takes you to implement an idea and even if you can't put dollars to it it makes all the difference in what you're able to do and how much you enjoy life which is the next thing think about the stress level some activities just create more stress and you have a stress limit I call it a stress budget my favorite word right but if it takes some stress in order to get an idea in place that's a cost Think about it that way it may be worth the cost but it's not cost free if it's increasing your stress the other thing I encourage particularly. When you're doing budgeting but even in conversations like this is that there's a knowns and so every time you go into a situation there's probably going to be something that you don't know about that you learned so when you think about the possibility of making a change or making an investment I just encourage you to be conservative right think this is you know I thought of all the things I can think of here's what my analysis looks like and then I probably ought assume that something going to go wrong because usually it does because we don't know everything that's how we figure this stuff out as my experience so. The questions to ask regarding sales ideas this is just a summary of another way of saying the same thing I've already said if you're considering a an upgrade to your sales process or plan how does your upgrade add value you've got to be considered convinced that what you're doing is going to actually add value if you think it does then quantify it as best you can how much value does it add. Same thing on the cost side of the equation if you're considering an upgrade or doing something different in a way that will allow you to do the same level of sales but more efficiently how does that work how to reduce some cost that you have and if it does how much cost how much does it reduce cost so those are the questions I ask that's kind of the framework I use and that's what I would describe as a summary so I'll leave that slide up there. For just a minute and I'm going to go ahead and move into the case study part what we'll do is I'm going to give you just a little bit of case history about how Better Together firms has progressed over the years with respect to their selling effort then we'll break into our groups and we'll have one more conversation with some questions and then following that we'll take a break and when we come back from the break then you'll hear from Ricky and you can hear a little bit about what Better Together firm has actually done in this arena in the last year Ok so I'm going to press on if anybody needs me to go back to that slide I can come back to it during the break. I'm going to just give the highlights of the sales progression there's nuances and little things that the silos of trying to along the way if you want to more comprehensive description please talk to them because they're you know they're very willing to share these kind of things when when they 1st started selling the process they used was to have a piece of paper that had their products and their prices on it they'd hand those pieces of paper to customers or leave them at places for customers to pick up and they would call the customers to get the orders Ok So that was back a long time ago when they started that's how they got started and it was a a low tech easy way to get started and they quickly learned that they wanted to do something more and there was efficient seized again but again don't despise the day of small beginnings every step is worth celebrating I don't know if I congratulated you on that step Allan back 10 years ago but I should of getting started was a good thing right. The next generation I call it that they had was when they got ordering software and they started accepting the orders online Ok And then once they had the orders in they would you know assemble them and put them all together and package the orders and then they would take their orders to what they called a pop up market Ok so they had 2 locations one in Murray County one in Carter County the customers would know that the pop up market would operate for a couple hours on such and such a day so they place their orders a day or 2 before him go to the pop up market and pick up their order and pay for it at that time and then at the same time they would bring what they called extras so if they had production that didn't sell they would set up a section of their pop up market with extras and either walk up customers or customers that had collected or had made orders could buy extras on top of what they'd already ordered they were guaranteed to get what they did order but if they wanted extras there were some available and that's the way they were in their market for I don't know 3 or 4 years something like that several years. And that allowed them a level of growth in service and efficiency that was definitely an upgrade to that 1st generation and so that was a 2nd step. And so again I hear this before this using this online ordering with pop up markets they got them to about $40000.00 worth of sales in $21000.00 so as you've heard already in Aubrey's presentation the target that they have for this year was $60000.00 so the question that I want to invite you to consider in your groups whether it's this situation or if you have a comparable situation from your own is what selling upgrade are you or could you consider for your situation right if you don't have a situation think about what you would advise better together firm to do to get from that 40 to that 68 what can they do that they haven't done so far if you have your own situation answer in context of that but go ahead and gather together new groups and share for about 5 minutes and then as soon as you're done with that go ahead and go on break and we'll reconvene here at about 1045 about 15 minutes from now Ok thanks this media was brought to you by audio 1st a website dedicated to spreading God's word through free sermon audio and much more if you would like to know more about audio verse if you would like to listen to more services lead to visit w w w audio verse or.


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