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Coach

Who Needs a Coach?

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Muhammad Ali.

Wayne Gretzky.

Tom Brady.

Professional athletes…emphasis on “professional,” the best at what they did (do). Evoking cries of “The G.O.A.T.” which stands for “Greatest Of All Time,” these legends all used a coach.

Football teams have more coaches than they are allowed players on the field at any one time. Baseball, hockey, soccer, olympic squads, the list goes on…all have coaches.

Individual success, such as Tiger Woods, Venus Williams, Michael Phelps, even many CEOs of Fortune 500 companies, all use a coach. One of the best, if not the best coach of corporate executives, Marshall Goldsmith, uses a coach himself.

Right now, I have three. Each has a specific purpose, yet they compliment each other in how I benefit from having them. This does not include the advisers I use for accounting, legal, investments, or insurance where the number then increases to more than ten.

Back to the professional athlete, who is so skilled at what he or she does that they make a living doing it (and a exceptionally good living at that.) If you’re already top of your game, what good is a coach? If that were true, then everyone at the top of their game (see a small sample list above) would have fired their coach. Just because we might be at the top of our game doesn’t mean there is no longer room for improvement. None of us is perfect.

Can you and your business benefit from a coach? What aspects of your business could use some coaching?

Efficiency: is your efficiency all it could be? The old adage that I lean on is “You don’t know what you don’t know”, so is the perspective from an expert a worthy pursuit?
Finance: this relates to banking, borrowing, and investing. Is your approach more reactive to these important facets of your business, or do you regularly analyze your situation to proactively position you and your business? I couldn’t tell you how often I’ve seen something as simple as monthly account fees going totally unmonitored and therefore costing 2-3x what would be charged if a regular review was done.
Growth: this can take so many forms; I could write a book! Growth is not just about size and scale, there are many ways to grow (both personally and business.) If growth is your desire, considering how varied and complex growth can be, having a growth coach can save hours of stress, create multiples of efficiency, and help avoid pitfalls along the way.

The list is almost endless: from technology and social media to HR and governance/policy development, there is an expert available who is willing to help you take your business to new heights.

Plan for Prosperity

It is not reasonable to expect that you, as an entrepreneur and business owner, can know everything related to the successful operation, sustainability, and life-cycle of your business. And yet, considering that your business is the driver of your family’s lifestyle and a big part of your legacy, it is tragic to leave to chance so much of what is critical to business success.

Do what you do best, and get help for the rest.™

-Kim Gerencser

The quote above is a major cornerstone of my advisory work with clients, that’s why I’ve trademarked it. It’s been said that we can spend our entire lives trying to improve on our weaknesses and all we’ll end up with are a bunch of strong weaknesses. Whereas if we leveraged our strengths, the potential they create can grossly overshadow the drawbacks of any weaknesses…especially if we leverage others whose strengths are in the areas of our weaknesses.

 

 

Heat and Light

Heat and Light

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Heat comes from energy. Emotion creates energy. Therefore, emotion provides the heat.

But, emotion can also cloud our judgement. It can lead us to act irrationally, and even in ways we would not normally behave.

Light, however, provides perspective. By illuminating more than what is right in front of our nose, we are able to recognize more options than emotion alone would have permitted us to see.

Light is awareness. Awareness allows us to think.

Heat with no light is raw, unbridled, emotionally charged nonsense.

Light with no heat is cold, calculating, and rigid to the point of inaction.

“Logic makes us think, emotion makes us act.”

– Alan Weiss

 

Plan for Prosperity

Like everything in life, too much of anything is not a good thing. Your business needs a balance of heat and light.
You, as the business owner, no doubt, have an abundance of heat. Where do you source your light?
I, as a management adviser, am hired to provide light. That light is awareness to options and strategies that can benefit your business.

But without your heat, no amount of light will make a difference.

push pull

Push and Pull

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Push and pull.

Passive aggressive.

Proactive or reactive?

Okay, passive aggressive doesn’t REALLY apply…or does it?

A recent conversation with a banker had him using terms & phrases such as:

  • they have no idea what they owe, to whom, or what their payments are;
  • they leave out information in what they send to us;
  • after a year of battling over their lack of cash management, the bank is viewing their risk profile as ‘high.’
  • the promised to put together a plan months ago, but it seems there was always ‘something more important’ to do. Now that the bank is downgrading them, they’re in a hurry to get the plan in place.

The borrowers that this banker was speaking of have consistently displayed a behavior that is reactive. They:

  • only provide info to their lender when threatened;
  • do not follow the terms set out in their borrowing agreement;
  • only got serious about making a plan when the bank indicated that their credit risk profile was being downgraded.

Situations like this are, sadly, not uncommon. All too often, financial professionals see impending challenges and offer advice that is pertinent based on their experience. Whether the advice is heeded or ignored is out of our control.

What can be done? At risk of sounding like a broken record…

  1. Preserve cash by building strong working capital;
  2. Do not acquire capital assets with working capital…borrowing is still incredibly cheap!
  3. Drive down overhead costs so you can produce at the lowest Unit Cost of Production.

The challenge, of course, is now during a period of low commodity prices, how does one go about preserving cash to build working capital. A pessimist might say “that ship has sailed” with the end of the commodity boom. Notwithstanding any significant production issues somewhere on the globe, this may be true. And to bring it back around to the open of this commentary, proactive or reactive, it seems that by and large farms are reacting to the profitability challenges and positive cash flow challenges of the day. Proactive would have acknowledged that the good times were cyclical and would not last forever…

Plan for Prosperity

PUSH yields. In commodity production you need the bushels, but focus on optimum yield for profitability, not maximum yield for coffeeshop bragging rights!

PULL efficiency. You need to do more with less in low margin environments.

PUSH costs down. The lowest Unit Cost of Production (UnitCOP) wins. Period.

PULL management effectiveness to new heights. During times of questionable profitability, it is management that will rise to the top.

 

 

Rayglen 2018_2019 proj crop returns

The Great Profitability Challenge of 2018

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The graphic seen above was shared at a recent CAFA chapter meeting (Canadian Association of Farm Advisors) and forwarded to me by one of my fellow CAFA colleagues who was in attendance. By coming from a reputable commodity trading entity, there is a level of trust we can have in the data presented.

And the (projected) data looks bleak.

With only four crops expecting a net profit to exceed $50 per acre by any respectable amount, the profitable options for 2018 are few and far between. No wonder the common sentiment this winter is “I don’t know what to grow this year; doesn’t look like anything will make a profit.”

Considering the four crops in the Rayglen projection that are close to abundantly profitable are 1 variety of chickpeas and 3 varieties of mustard, it’s pretty clear that your geography becomes part of your challenge. Yes, wheat, barley, flax and canola are also projected to be positive, but are any of them sufficient based on the risk and/or your personal circumstances on your farm?

Here are some questions that I feel must be asked:

  1. Is crop rotation holding you back from loading up on what few profitable options are available?
    I recently heard a lender suggest that those who blow up their crop plan to chase the perceived winner, by his account, usually miss out.
    This can be often true because of the long cash conversion cycle in production agriculture. Farmers bet on a crop plan that they expect will make them money, but a lot can happen between February and harvest…the market giveth and the market taketh away! If there is one thing Western Canadian grain farmers can do, it’s produce! We can overproduce a commodity in as little as one crop cycle, and as such in July or August drive down what was a winning price back in February!
    The lender referenced above went on to say that sticking to your proven crop plan is the way to hit a winner most years, maybe even multiple winners!
  2. Is $50 per acre or even $75 per acre net profit realistic, or even sufficient?
    How much was expected yield and/or price “padded” in that projection? How much were total costs “softened”? Were there 4-6 applications of fungicide built in to those chickpea projections?
    Generalist type of prognostications like this one need to be taken with more than just a grain of salt. Do the “variable” and “total” expenses displayed reflect your farm? What is included in each category? Are they including all expenses, including the PAPERCLIPS? There is much ambiguity in figures like these.
  3. Do whole farm expenses reflect the capability of the crop plan, or is the crop plan now expected to meet the ever-increasing farm expenses?
    Recently, I’ve overheard a couple of pundits suggest that whole farm expenses are now nearing $400 per acre. If true, that relegates many crop plans into the underworld of “operating loss.” I’ve gone on record several times suggesting that the elongated commodity boom recently ended has allowed many bad habits to form at the farmgate. The habits in question surround the insatiable appetite for newer/bigger farm equipment, larger land base, and higher living standards. It wasn’t long ago that top tier farmers kept their operating costs (described by some as labor, power, & equipment) in the range of $90-$100/ac, and these pundits now suggest that the best of the best are in the $140-$150/ac range. That $50/ac increase in what is the most controllable facet of farm expenses clearly has shaken the profitability potential to its core on many farms. And that only applies to those whose operating costs have increased by ONLY $50…

Plan for Prosperity

The recipe for profitability is simple:

  • Have a plan (how/why/what you do);
  • Run lean;
  • Know your numbers & market to your numbers;
  • Maintain discipline.

Of course, if it was as simple to do as it is to describe, everyone would simply do it. Also, did you notice that nowhere was there anything in that recipe about production or farm size? In the commodity business, the winner is the one who produces at the lowest cost per unit of production; the best way to achieve that is to have a plan and maintain discipline to it, get lean and stay that way, and finally market your production to your numbers (not to your emotion.) If you’re have challenges with any of the four ingredients in that recipe, why haven’t you picked up the phone and called for help already?

 

roi

Sustainability – What is It?

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Are you sick of buzzwords? They’re everywhere…all the time. Some are actually impactful, but all are meaningless without context.

One buzzword that actually has some meat is “sustainability,” but in the next breath it’s meaningless because it can be over-used, misinterpreted, or put into the wrong context. Often times the word is attached to “environmental” sustainability and conjures up visions of environmental enthusiasts/activists/evangelists, but the term sustainability is simply defined as being able to last or continue for a long time.
Ref. https://www.merriam-webster.com/dictionary/sustainable

Using that frame of reference, let’s focus on the financial aspect.

You have put many changes in place in your business over the years. Ranging from new/improved processes to increased size & scale, each change has had an impact on your business. No question, your intention has always been to implement a change for the betterment of your business. But prior to initiating any action, was an assessment of the sustainability of the proposed change ever done? How did you quantify the impact of the change?

There are many success stories floating around lately about producers who gave up some rented land and increased their overall business profits from doing so. While this is counterintuitive to the deeply embedded mindset that “bigger is better,” clearly the financial sustainability of the status quo was in question for these particular operations.

What is the financial sustainability of increasing the size of the factory (more land), adding capacity (more/bigger/newer equipment), or increasing labor (more people)? Each of these needs to be evaluated beyond the obvious cash costs. What are the incidental costs, meaning:

  • Increasing the size of the factory (More Land) carries
    • Higher ownership/operating costs for PP&E (property, plant, & equipment);
    • More cash to service debt on the asset;
    • Change in insurance costs (which way will premiums go, up or down?)
    • Change in utilities costs (which way will heat and power go, up or down?)
    • More working capital to be able to utilize the increased scale of the business;
    • Etc.
  • Adding Capacity (More/Bigger/Newer Equipment) carries
    • Higher costs for PP&E (property, plant, & equipment);
    • More cash to service debt on the asset;
    • Change in insurance costs (which way will premiums go, up or down?)
    • Change in operating costs (which way will fuel and repairs go, up or down?)
    • Will you need to add staff (another operator)?
    • Will you need to upgrade your systems and/or technology so the new equipment can operate relatively seamlessly in your existing set-up?
  • Increasing Labor (More People) carries
    • Additional cost for benefits (pension, vacation, etc.)
    • Higher management requirement (to approve holidays, implement performance evaluations, conduct scheduling);
    • Any additional tools for employees to use (hand tools, vehicles, computers, etc.)
    • Training costs.

Each of these points above has an impact on the decision to increase the size of the factory, the capacity of the equipment, or the volume of human capital in your business. Evaluating each decision above with a broader perspective, which would include an expected ROI (Return on Investment), is the best way to understand the sustainability of each option. If the desired change to your business provides insufficient ROI, it puts the sustainability of not only the project but your entire business in question. At minimum, ROI must exceed the cost of borrowed capital that was utilized for the project.

Plan for Prosperity

Buzzwords aside, sustainability is as much of a mindset as it is a business practice. Sustainability deserves a place in your business’ values and mission & vision statements. It should make up a component of every business decision that you consider. If your business is not sustainable, what are your plans for afterwards?

Reflection

Reflection

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We are now bombarded with headlines, columns, and blurbs about how this is the time to pause and look back over the last year. What went well? What didn’t? Blah, blah, blah…

If you’re not doing this throughout the year, not just now in late December, I have to ask, “Why the hell not?” Do you think a hockey team plays the entire game without checking the scoreboard and the clock regularly? They would be quite surprised to have the final buzzer go off only to find they were losing the game and didn’t make any adjustments that could have led to a win…

No, this column is not like the others that suggest you look back and give thanks. That is, however, good advice and a wonderful practice to follow.

This column suggests that you look for your reflection. It can be seen in places we don’t always look until much time has past, which often leads to difficulty making sufficient adjustments (Ref. the hockey team described above.) Here are a few places where you’ll see your reflection, if you look…

Your Children

As a young man, I was told regularly that I was very much like my dad, right down to the way I walked and talked. I took that as a compliment because I really looked up to my dad. As I matured as a man, I began to see some of his shortcomings and decided I didn’t want to be a mirror of him but a better version instead. I try to emulate his virtues and learn from his faults so that I can be the best dad I can for my two young daughters.

I see strong reflections of myself in my children, especially my oldest. She has perfectionist tendencies, wants to do right by everyone, and is incredibly well spoken for her age. All are qualities I’ve been told would aptly describe me as a toddler. Those might be her worst qualities because on the other end of the spectrum, she has the most beautiful soul: caring, generous, forgiving…I could go on and on. I’ve learned that perfection kills progress and am working on improving my perfectionist tendencies every day. Now I need to learn how to teach her what I’ve learned in this regard.

Your Business

As a solo-preneur, (that’s the phrase I’ve coined to describe me and everyone else who is a solo entrepreneur) I am my business; I am everything in it and for it, from creating and executing the marketing plan to opening the mail. If I’m not working my business, my business is idling in neutral.

In businesses with a team, be that team a family or arm’s-length employees, the team will be an indirect reflection of you as the leader. A motivated and conscientious team is a reflection of an appreciative and fair leader. An apathetic and truant team is a reflection of a harsh and impatient leader.

However, it matters not whether our business is a team or a solo, the drive towards success that is seen in our businesses is a direct reflection of us, the leaders. Our level of engagement in the moving towards our big picture, long term goals will correlate almost perfectly to the results we achieve. My engagement in my business has been challenged in the last half of 2017 as I dealt with a difficult personal issue, and the results show it.

Your Circle

People tend to gravitate to other people of their ilk. It’s natural. Is your circle of friends & contacts positive and optimistic, or negative and pessimistic? By surrounding ourselves with other just like us, we risk getting caught up in an echo chamber where our perspective is never challenged and will never change.

To Plan for Prosperity

Reflection is more apparent than we might think. Yet it is often difficult to recognize. And despite all this, typically the best tool to settle the challenges in business is a mirror.

 

**Credit Where Credit is Due
Last week we shared again that “Cash Isn’t King, It’s the ACE!” This was first heard from Phil Symchych of Symco & Co. management advisors symcoandco.com  and we didn’t provide proper citation or acknowledgement. For this, we apologize. Phil has been a great friend & advisor and we look forward to continued success.

 

Top Shelf

Top Shelf

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Top Shelf.

It’s a phrase best known for describing the highest quality wines, spirits, and liqueurs.  Those who produce such fine beverages are known to maintain unwavering quality in their attention to detail, ensuring that each bottle meets the highest standard for which they’ve become known. Connoisseurs know which brand is “top shelf” by its reputation.

Same can be said for restaurants. At a client reception, I witnessed great care from our service staff to ensure every order was correct, on time, and to their diner’s expectations (even better to be above those expectations.) The entertainment factor was brought into play during desserts when special coffees that donned towering flames were prepared right in front of us. Everyone had a wonderful time, and the tip showed our appreciation.

“Top Shelf” is synonymous with quality. This moniker can be applied to almost anything from cars to clothes to food or to service. We all aspire to enjoy something “top shelf” once in a while.

Of course, top shelf does not matter to all people all the time. Some things in life just need to be economical. Would you pay $5 for a can of “top shelf” soda pop from a boutique brand when you can drink Coke or Pepsi for under $2? It’s unlikely you’d get in line to pay premium rates on your electricity bill, and no one would choose to pay $15 per pound for bologna…”top shelf” or not.

The contrast is determining where we will settle for “economical” and where we desire “top shelf.” In the commodity business, and yes if you produce grains or livestock you are in the commodity business, it is easy to get into a pattern of “everything economical.” This is because you sell the commodities you produce at the lowest price the market is willing to pay that day…because it’s commodity! And so, that thinking permeates through your entire business driving you to search for the cheapest option: fuel, fertilizer, parts, insurance, repairs, professional services, etc. You’ll notice that equipment did not make that list; somehow equipment remains the anomaly that defies the theory of “everything economical.”

Would the management of your business be considered “Top Shelf”? If it was to be rated by experts and evaluated by professionals, how would you measure up? Are you okay with “everything economical”, or when it comes to your legacy, your family and your business, should “top shelf” be the minimum requirement?

To Plan for Prosperity

If you deserve “top shelf management” in your business then elevate your skills or seek it out externally. Relentlessly adhere to consistent “top shelf” quality in your management systems, information, and decisions. Recognize where in your business you should be “economical”…but (spoiler alert) it should not be in your management.

Like top shelf booze, you too can be known as a top shelf manager by reputation…if you develop the habit of “unwavering quality in attention to detail” just like those whose product is found on the top shelf.

Goal Congruence_LI

Goal Congruence

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Have you been beat up enough yet about “defining your goals”? Every article I read relating to business management and every presentation I attend relating to business management always brings up the need for you as the businessperson to “define your goals.” For the record, “business management” in the context of this piece also include business transition (succession) planning.

The beatings will continue. They’ll continue as until everyone doesn’t just listen to the advice, but acts on it.

More often than not, when I ask a client (or even a prospective client) what are their goals, I get a blank stare, as if the concept is a foreign language. Far too many business owners have given little consideration to what they are trying to achieve in the business.

If it’s just a place to work and/or a lifestyle to enjoy, then declare it as your goal.
If it’s a family legacy that has been left to you that you intend to leave to your children, then declare it as your goal.
If it’s to achieve the largest scale in your market area, then declare it as your goal.
If it’s to create financial wealth and prosperity for you and your family, then declare it as your goal.

Don’t just tell the advisor you’ve hired, and paid well, that your goal is “to make more money.” That’s everyone’s goal, whether employed for someone else or self-employed like you. Let’s get serious.

There are four sample goals described above. These four have been chosen because they are the most common goals I have identified in working with entrepreneurs for the last 15 years. What I mean by “identified” is that while some of these goals have been declared, it’s more common that the goal is insinuated by (or surmised from) the behavior of the owners. The problem is when business owners try to combine more than one of those four sample goals listed above; this happens almost all the time.

The first goal listed, lifestyle, is not congruent with any of the other three.
We’ve learned that largest scale does not automatically equate to increased financial wealth and prosperity; again, not necessarily congruent.
The only congruity among the four samples is between family legacy and financial prosperity.
– yet behaviors often do not follow those goals.

It is advisable to have multiple goals in business and in life. In business, none of the goals we may have can be achieved without prudence in financial management. Remember, profit feeds your business, it feeds your family, and it feeds your ability to spend time with your family & on other things you enjoy. If you feel uncomfortable declaring one of your business goals to be financial wealth because you don’t want to be thought of as a greedy person, then don’t declare it, but for the sake of your business’ and your family’s future, behave like it. If you’re not profitable, if you’re suffering under the pressure of non-existent working capital, or worse, then none of your goals are achievable. Period. Hard stop. I’m sorry to have to deliver that cold truth in such a harsh manner.

To Plan for Prosperity

The challenge I lay out for all entrepreneurs is this: be clear on why you do what you do, establish working parameters and behaviors that support it, and evaluate your progress & results regularly to ensure you’re still on track. How sad would it be to never check the map for the entire journey only to end up somewhere you never meant to be?

Not only must your goals be congruent, but your behaviors must be as well. You and your business face enough turmoil, challenges, and risks. Don’t create more challenges by making decisions that aren’t congruent with your goals.

It Can't Happen to Me

It Can’t Happen to Me

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Have you heard?

Things aren’t all roses in agriculture lately. Sure there are some who are doing quite well, and of course the recent drought gets the credit for any 2017 results that were sub-par, but what about those who still did okay during the drought? What about those who are still sub-par when everything is firing on all cylinders?

A recent article on DTN titled Skating on Thin Ice summarizes the message of Dr. David Kohl, renowned ag economist, at the National Agricultural Bankers Conference earlier this month. Dr. Kohl has been advising ag bankers for over 40 years. He’s got some chops.

His prediction (in summary): there will be clear winners and losers, the losers being the bottom 30% of all producers.

What makes the bottom 30%? They barely make a profit, have burnt through most (or all) of their working capital, and are beginning to burn through their equity. Dr. Kohl suggests that a farm in this position consider exiting before all equity is gone.

It was back in 2016, over a year ago now, that rumblings were coming out of the US Mid-West about farm lenders tightening up on credit approval criteria. I tweeted the following:

We’ve already seen an increase in interest rates from the Bank of Canada, and we are to expect more according to messages from our federal government. But do not think that your interest rate can only be changed by the BofC. Lenders set interest rates according to how your business is risk-rated. If you’ve already burnt through your working capital and have moved on to burning equity, you are considered to be high risk and will be charged interest accordingly.

Land value appreciation has propped up many farms that have a history of poor operating profits.

Remember when we talked about how the commodity super cycle (2007-2013) allowed below-average management skills to generate above-average results? (Ref. Vol.3 /No.44 Happy Halloween) Even those producers who were not able to produce a profit from operations could still show that equity levels were increasing because their land was appreciating. This created a false sense of security, and a false sense of accomplishment.

Notwithstanding what is going on in US ag lending, the landscape in Canadian ag lending can change.  The bank’s desire to support businesses that cannot generate profit from operations is limited. Are you on the radar?

To Plan for Prosperity

Allowing your relationship with your lenders to be anchored by land value appreciation only, and not profit from operations, could make you a subject for a change to your borrowing terms. How would your business be affected if your interest rates increased by 1%, or if your credit limits were reduced by one-third? If your current lender views you as high risk, other lenders will too…

 

Halloween

Happy Halloween

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Let me first get this off my chest.

In this age of hyper-political-correctness, to hear of some schools that are “cancelling” Halloween because of the risk that some costumes might “offend” or “scare” someone is taking us down a path that we may not be able to come back from. I’m not a proponent of Halloween, but I’ll gladly encourage anyone who wants to take part in it to do so, and anyone who doesn’t can also do so. What we need to remember is why we do it, even if we don’t love it…IT’S FOR THE KIDS!
It’s THEIR imagination and THEIR excitement that must not be squelched just to satisfy our guilt over ________ (fill in the blank).

Thank you; now onto the real business at hand.

Getting dressed up in a costume creates an outlet for us to be something we’re not, or maybe something we wish we could be. (As a kid, I wanted to be a pro-football player and might have dressed up as such for Halloween.)

Over the last several years in western Canadian agriculture, “average management” has been dressed up in a costume of “excellence.” With high yields and high commodity prices, even average managers were more profitable than they had been in the long term…maybe ever.

Dr. David Kohl uses the term “black swan” to describe the recent commodity super-cycle because, like a black swan, it is “not the norm.”

A black swan is an event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict;

Source: www.investopedia.com

While we might be inclined to associate black swan occurrences with negative deviations from normal, in the case of the last 10 years in agriculture, we’ve experienced a positive deviation from normal. The danger came when many participants in the industry believed that what was happening wasn’t actually a black swan but “the new normal.” Many long term decisions were made based on short term results. True to the black swan definition, the onset of the commodity super-cycle was predicted by very few, and even fewer still predicted it would last as long as it did. Maybe it was the fact that it did last longer than a year or two is why people started to believe it would never end…?

The unpredictability of this black swan continues to cause angst among players in the industry. Some are soldiering forward as they have for the last several years with full expectation that the black swan will return. Others are are in full damage control mode, or even panic mode. Others yet are patiently waiting for the opportunity that always follows the economic cycles.

Market cycles will hurt some, but offer opportunity to others.
The difference between who suffers and who prospers is…Who’s Ready.

– Kim Gerencser

I started making that statement way back in late 2012. The message then was to take advantage of the current up-cycle to solidify your business in preparation for the upcoming down-cycle (because bulls are always followed by bears, which are followed by bulls…it is how cycles work.) Being greedy during an up-cycle brings up another old adage, “Pigs get slaughtered.”

To Plan for Prosperity

When preparing your 2018 projections, compare your projected expenses to your worst revenue in the last 10 years. Is there a negative gap? How big is it? What needs to be done to cover it? Alternatively, is there a positive gap? How big is it? What needs to be done to protect it, or even to leverage it so as to make it wider?

The exercise proposed above is comparable to removing a Halloween costume. While things look one way outwardly, what is actually happening underneath, at the surface, can sometimes be much different and will tell the true story.

Happy Halloween!

PS. Don’t wear your Halloween costume to your banker meeting.