Another issue several of the groups addressed
was the annual fly-by of financials. In other words,
waiting until November and December to analyze
financials can severely limit options. In addition,
those that attempt to minimize their taxes through
capital purchases and revenue and cost manipulation
are ignoring possible unintended consequences and
long term sustainability. As one lender stated, “I
wish my producer customer would manage taxes
instead of just minimize them.”
Not surprisingly, many lenders wished their
producers were better marketers. That includes
knowing their cost of production, their breakeven
point, and profit margin. Lenders want to see
producers who can execute a marketing and risk
management plan when the price target occurs.
Especially in marketing, the philosophies of “we’ve
always done it this way,” or “I’m going to wait until it
goes higher” can get a business into a costly rut.
Relating to today’s economic environment,
one lender wished that every producer customer
that requested refinancing also presented a written
plan for corrective action. This type of approach
increases accountability and can be used as a tool
and discussion point as one returns the business to
profitability.
The institution that employees many of the
lenders at the school sponsored a free educational
event for area producers last year. And the number
of responses was encouraging. Yet, the night of