Dollars and Sense - August 2012

Leadership Counts
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As we go through another public office election year, our thoughts are engaged by how we should cast our vote in the upcoming local, state and national elections. It is readily apparent that the public servants we elect can and do have a substantial impact on our future.

On March 4, 1994, CFA’s membership elected Barry Jensen to the board of directors. Since his elections, Barry served on CFA’s board as Vice Chairman for fourteen years, and as Chairman the past five years. Nineteen years of service is significant commitment of time, energy, and intellect contributed for the benefit of the membership.

During Barry’s tenure not everything was rosy for the board of directors. There were operational issues that demanded attention. There were Bylaw provisions to which revisions were appropriate. There were management changes, There was the ever-present task of planning for the future. Throughout such challenges, Barry served. Focus on what’s important, seeking solutions and not just responses, logical thought, wisdom; these are contributions that Barry has made on your board of directors. Under your board’s guidance, CFA has achieved a trend of solid, consistent operational and financial results. Leadership counts.

Barry’s current term ends this year and he has decided not to run for another term on the board. CFA owes Barry a debt of gratitude and a resounding “Thank You” for all that he has contributed. Barry has made the decision to pass the baton to another, another who will run the next leg of leadership on CFA’s board. That individual has the mark to strive for, which Barry has set and the membership deserves. Because leader counts.

Board Redeems Equity

CFA’s financial performance has been strong enough to support an equity redemption. The board of directors has approved a redemption totaling $1.2 million. In accordance with the established capital plan, this amount is paid ratably to those equity holders that are over-capitalized. This equity redemption amount is nearly a quarter of the past year’s operational earnings. These equity redemption check were mailed on July 31st.

6 Things to Know About Using A Financing Function To Achieve Your Objectives

1. Easy Credit Makes Bad Borrowers -

Agricultural finance is one of the most over-served credit markets that can be found. Any farmer that is credit worthy has multiple avenues to obtain the operating funds that he needs. Providing financing to a farmer that has no other financing alternatives is a dead-end effort. Your financing function should be targeted at your long-term customer. Investing your resources including your finance function, should be focused on maintaining and expanding your market share in each of your business segments now and into the future.

2. Change the Game To A Level Your Competition Can’t Readily Match -

If you try to compete on price then you set the stage of your customer to shop your products on price. Your competition can meet a price level very readily. Providing a combination of products and services, along with the necessary financing , makes it very difficult for your customer to comparison shop your proposal down at your competition. It is also virtually impossible for your competition to match up with your offering. By beating your competition to the customer with your offering, you set the stage in your favor to win the sales.

3. Don’t Short Your Sales Staff On Resources -

You pay your sales staff, you pay for pickups, you pay for travel expenses, you pay for smart phones and laptops, and you pay for advertising. Make sure you go full circle to provide a financing component to bundle with your product and service offering. Don’t leave your sales staff short of a powerful tool to capture sales.

4. Margins On Incremental Sales Are Pure Profit -

The last 10% or 20% of a customers business that you fail to capture is an incredibly fertile sales opportunity. You have already dedicated the sales staff, promotional efforts, accounting, support services and overhead to a given customer. You may as well capture all the income from 100% of the business by using all the tools available to you. Interest rates subsidies in combination with your products and servicing offering can be a very powerful tool in capturing the incremental sales that you re now missing. Interest rate subsidies sound a lot more appealing t the customer than they actually cost in real dollars, and the net contribution to your bottom line can be dramatic.

5. Targeting Works -

One size doesn’t fit all your customers. Your sales staff needs to target products and services appropriately to the customer, and that includes any special financing that you chose to include in your offering. A published program detailed in brochure that you place on the counter at all your branches nearly ensures that it will not produce the results that you want. If you ran a shoe store would you just handle size 10 shoes and try to sell those to every customer? Of course not, you wouldn’t get very far. Targeting your offering to fit the customer works.

6. Loan Portfolios Require Dedicated Capitol -

A portfolio of loans is a block of assets that sit on your balance sheet and return very thin margins for the average asset outstanding. It also requires a substantial investment of resources to service those loans assets. Most coops do not have excess capital that couldn’t be better employed in the core business sectors than investing in loans. The real benefit of using a financial function is to capture incremental sales and improve the bottom line.

Outsource your finance function to CFA, the experts in point of sale financing. CFA’s Input Finance Program is positioned to deliver for you on each of these elements. Check out our website at to see what kind of impact some are having on their sales. Let us show you how we can support you in archiving your organization objectives.