Loggers and sawmillers need to develop key relationships
By Debbie Woodward
In my column in the last issue of Logging and Sawmilling Journal, I talked about determining the priorities and the importance of working “on” your business rather than “in” your business. In this column, I will talk about new venture accounts and developing key relationships. I have come across business owners who felt that their business would be their retirement and accordingly felt that it wasn’t necessary to contribute to an RRSP or any other venture for that matter. They felt that they were continually investing into the business and that it would ultimately be their retirement. But now they may be in a position where for whatever reason, the value of the business won’t be enough to support their retirement needs—they are quite frankly “in a pickle.”
The prudent business owner knows that this is a narrow mindset. They understand the risks of having all your eggs in one basket and accordingly have a long-term risk management plan. What if you can’t sell the business when you want to? What if the kids suddenly don’t want to take over the business? What if you suddenly take ill and haven’t taken the steps to ensure that the operation can run just as fluidly and efficiently without your presence? What if the US imposes a huge tariff on softwood lumber and suddenly you find the sawmill you were contracting for suddenly shut down? A prudent risk management strategy is to set up a new venture account. Set aside five to seven per cent of your net income for new ventures. Keep the money in a separate bank account. You may never come across a new venture that appeals to you, in which case this reserve ends up becoming a nice tidy sum to supplement your retirement. But just having it there and watching it grow will always keep you focused and aware of any opportunities that you just may like to pursue.
Develop 10 key relationships I’m sure you’ve heard the adage “time equals money.” The adage for the future is “relationshipsequals time equals money.” To take your business to the next level, you need to be clear in your mind who will have an impact on your preferred future. You need to focus on those key people and find ways of bringing value to their lives. You will be surprised that the more you focus on bringing value to them, surprisingly they become your champions and automatically work toward bringing success to you. Who might those individuals be? It could be a log buyer.
It could be a logging superintendent or foreman. It might be a mill manager. It could be individuals in another town or mill that one day you’d like to expand into. It may also be someone at the forest service. It may be your lead hand. It could be someone you are grooming to take over your business. It may be someone who has an operation you want to buy. It could be your banker or accountant or business advisor. You need to look at your own operation. Determine where you want to take it and who might be instrumental in helping you get there. Then, develop a strategy where, over the course of three years, you get to know those individuals and what makes them tick and find ways to bring value to them. This may seem like quite a divergence from supervising on the landing, but remember, you are changing your focus over the long term from working “in” your business to working “on” your business.
Bottom line …. All of us as business owners struggle to find ways to take our businesses to higher levels, but unlike years gone by, we have more of a desire to satisfy our personal needs as well. We no longer want the business to be the sole source of our identity. There is more to life. Sometimes we need to take a step back and refocus our energies and priorities toward achieving a more rewarding lifestyle.
Debbie Woodward is an accountant and principal of her own firm, Woodward Financial Group. She provides business, financial and investment advisory services primarily to businesses involved in the logging industry. She can be reached at firstname.lastname@example.org