Profitable Farmer
Episode 10: The 5 Ways To Break Through The Ceiling
Jul 24, 2018 · 35 min
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In this episode, Greg and Andrew will be educating on what to do when you or your business hits a ceiling. 

 

Thanks to the Entrepreneur Organization System (EOS) who helped create this content

Having been involved in businesses for a long time now, we are very familiar with this topic.

To begin with –

HITTING THE CEILING OCCURS WITH ALL BUSINESSES

Eventually, you will reach a point where something in the business is basically stuck.

Your business is either not going forward at the rate that it was -

Or, you feel the business is just overly complex.

There might be individuals in the business that are feeling things are just too difficult for them within their current roles or there are divisions or areas in the business that are not progressing as well as they should. 

Hitting the ceiling can occur at an organisational level,

Can occur at an enterprise-specific level,

Or can occur at a personal or people level. 

Understanding that the business is just not progressing or not moving ahead as it was, or you get a feeling that things are just going to be complex and difficult to handle – THIS IS HITTING THE CEILING!

We are not an exception, it occurs to us too.

Greg and his wife have gone on a rapid expansion of their business over the last 8 years.  Their business expanded in terms of revenue by 400%.   In staff terms, it has tripled in size in that period

They were hitting the ceiling, about every six months throughout that period of growth. 

The business was growing so fast that it took a lot of effort, on Greg’s behalf mostly, to visit the 5 disciplines that we are going to talk about in this episode.

How did Greg hit the ceiling?

At that particular time, everything had to change within his business

The systems that they had in place, the structure - the team, the way that the team was positioned and the way they managed them.  Everything had to change on a constant basis to allow them to continue to grow and achieve that rate of growth.

Greg strongly points out, all businesses that grow, hit the ceiling at some stage and,

There are only 3 things you can do when you hit the ceiling:

First, PUT IN PLACE THE PRINCIPLES THAT WE ARE GOING TO TALK ABOUT TODAY, restructure the business and move it through that ceiling and get on to the next phase of growth.

Second, stay at that level and just bounce around and not go anywhere.  Eventually leads the business to reducing profitability and ultimately at the end, would cause demise of the business.

Third, you can actually recognize that the business has stagnated and you can elect to reduce the size of the business and move it back down to a smaller business.

Some of the ways a farm owner might know that have hit the ceiling:

  • When a farmer works so hard but not really getting the traction
  • Business is progressing okay but it’s just getting complex
  • When you sit back and reflect on your business and you know that when you get sick, the business has a high chance of falling over

HITTING THE CEILING IS OFTEN AN OPPORTUNITY DRESSED AS A DISGUISE...

SLOW DOWN IN ORDER TO SPEED UP.

SOMETIMES WE NEED THE EDUCATION TO CHANGE DIRECTION INSTEAD OF MOTIVATION TO SPEED UP.

After all, hitting the ceiling means the business is growing – there are significant opportunities awaiting.  Ask yourself, “What is it that’s holding the business back?”

Keep in mind, businesses that don’t grow never hit the ceiling.

And now,

THE 5 PRINCIPLES:

Simplify

As the business grows, it becomes more complex.  As human beings, we seem to like to make things more complex.  Quoting Steve Jobs, “Complexity is easy, simple you have to work at’.

A common scenario in growing businesses is when you reach a point where it’s become far too complex - too many balls in the air and too many things going on that make it hard to streamline and well-manage operating machines. 

The task of a business owner is to look at what’s going on in the business and simplify as much as possible.  Run the simplest systems.

 

 

 

Delegate

As the business grows organically, the owners get to a point where they are working beyond their physical capacity and the business is being constrained.  The labour being supplied by the principal owners becomes a constraint for the business to grow. 

The obvious solution is to DELEGATE. 

Look at the workforce and the tasks that need to be done.  Leverage your time so that you can bring somebody in to more effectively work on tasks and allow you space and time to work on the things that are going to help you grow the business beyond the ceiling. 

Predict

Prediction allows us to see where the business is going and what needs to happen.  We have the short-term prediction and the long-term prediction. 

Short-term prediction is knowing that you are on top of your business – that nothing is going to happen in the next 1, 2 or 3 weeks that will cause you putting out the fire and chasing your time all the time. 

Unfortunately, I’ve seen mostly the farm is running the business owner rather than the business owner running the farm.  This happens because the owners do not have strategies and processes in place. 

One very effective way of prediction is having short meetings with your team, say, weekly, half an hour.  Discuss all the current issues that are on the table, solve for the longer term good.  Once current issues are solved, these are not going to come up anymore in the next few weeks.

Long-term is all about looking at the business over 12 months down to 3 months window.  Understanding where the business is going and what the possibilities are.

Like a cash-flow budget.  Make it a realistic cash-flow budget, you are confident the budget can be achieved and then start tracking them. 

If you set a cash-flow budget and it is realistic, and you track it and you achieve the outcome for that budget, then you know exactly where the business is going to be in the next 12 months. 

Systemise

When you’re working on your own, then you have the repository of all the information, you do things the way you do them because that is the way you develop the processes and procedures for getting particular jobs done, that’s all fine…

BUT…

You get into a situation where you want all of the tasks done within the business. 

The only way to do this if you are not doing it yourself is to have written systems in place, documented systems, that somebody else can follow and achieve exactly the same outcome. 

Remember that 80% of your income comes from 20% of the activities that you undertake on the farm.

Identify all the important activities that occur and systemize, have written procedures, you can then have somebody else come in and you start delegating those tasks.  All they have to do is follow the systems you have written and know that the outcome will be achieved to the level that you want them achieved.

According to studies, 9 out 10 problems in business are system-related not human related. 

The natural tendency when there is a problem in the business is to blame the person, but the FIRST step that you should look into is, what system do you have to get this job done? 

Build the habit of having a checklist for all the systems and tasks associated with the systems. 

Structure

This is such an important one. 

Look at all the people that are in the business –

Look at all the roles performed in the business –

The tasks –

Create a visual of your current organization.

And then,

Look at the growing business to the next level.

You will realise your current structure is not satisfactory. 

Your current structure got you where you’re at today BUT it is not going to get you to where you want to go in the future.

Again ask yourself, “What is the simplest organisational chart that I need, to grow the business to the next level?”

This means you start identifying who in the current team has a lot of tasks to do.  Then you create new opportunities within the business and split out tasks for people who are over capacity. 

Delegate tasks that suit their natural abilities and/or going out and seeking further members of the team with specific skill sets to take on tasks you identified to be delegated.

Having the right people in the first place –

Having them in the right seats, and

Doing the right thing matching their natural talents and abilities.

Next time you reach the ceiling, just apply any or all of the 5 ways and you will be able to break through.

It’s all about taking control of your business. 

You can allow the business to take control of you or you can take the range and take control of it. 

You can’t control the weather but you CAN certainly control a whole lot of variables in running a fantastic business.

TAKE ADVANTAGE OF THINGS THAT YOU CAN CONTROL.

 

Please share this podcast with other farmers.

 

We hope it helps,

 

Farm Owners Academy

 

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