Holistic Management

1. Holistic Financial Planning: Healthy Land. Healthy Profits Holistic Management

2. What are your dreams?

3. Protect your dreams, always wear a thick skin

4. Intro to Holistic Financial Planning Holistic Financial Planning is a component of Holistic Management. It was developed by Alan Savory, founder of the Savory Institute http://www.savoryinstitute.com/imported-20100211170933-home/month/may-2010 HM is taught by Certified Educators, materials and support can be obtained through Holistic Management International http://www.holisticmanagement.org/

5. Why are you in Business? True or False: Family Community Recreation & Free Time A Good Quality of Life Health Happiness Money Money is the most important thing in your life and the driving force behind why you are in business. Cross out the items that are not important to you:

6. What tools do you use to plan your business?To market it?To capture data?Are you monitoring your progress? How often?

7. Define What You Are Managing Towards Describe the Life you want (holistic goal ): • What Quality of life do you want? • What behaviors, beliefs, and infrastructure do you need to realize this quality of life? • Describe how things need to be in the future to maintain the life you want • Who will run the business? What must the surrounding community & customers be like? What resources will you need? Manage toward what you want… rather than what you don’t want

8. Holistic Goal – Write it down What must be done/ produced to achieve the desired Q of L Quality of Life What the future must be like to sustain this

9. Write a quick temporary Holistic Goal for your business What are you managing your Business towards? What do you need to produce to achieve your business “goals”? What will you need to have in the future to continue achieving your business goals?

10. Example Holistic Goal Quality of Life: Our life is low in stress, manageable, comfortable and includes weekly time out for fun. We are financially comfortable, live simply, have ample income to travel, see family and friends, and put aside money for retirement We are physically healthy and fit, challenged intellectually and feel good about what we do everyday. Our products help enrich our customers lives, protect the earth’s resources, and promote social justice and peace Forms of Production: Future Resource Base:

11. Example Holistic Goal Forms of Production: We make time weekly to practice holistic financial planning to ensure adequate savings and to guide our spending We consciously choose the raw materials and labor that goes into our products to ensure our social and environmental standards are met We encourage our staff to accomplish their goals, & empower them through education Future Resource Base: We live gently consuming less than we desire, minimizing our impact on the planet We actively support organizations and individuals that support our vision

12. Describe Your Business Management Structure Think about what needs doing…Who is in charge? Who reports to whom? Write down who is responsible for each job. How many jobs are you doing? Is that reasonable? Could anyone else do some of your jobs? What are the standards that need to be met? Are the necessary steps written down? Do you have job descriptions for each job? Do you have a good communication system? What is your weakest link?

13. What’s Your Organizational Structure? Have You Documented Your Critical Business Systems? Would your business be able to run without you?

14. Holistic Financial Planning Do you use your time as the business owner to focus on the $100/hr task of financial planning and management or do you focus on the $10/hr work of production?

15. Holistic Financial Planning • Make sound financial decisions that move you towards your holistic goal • Plan for profit and cap expenses so you achieve it • Prioritize expenses to maximize investing in the weakest link in your chain of production • Analyze your enterprises so you know which ones give you the biggest return on your investment of time/energy/money • Monitor your plan and make adjustments proactively so sound management decisions can be made and profits achieved

16. Holistic Financial Planning Traditional Business Plan Financials I – P = E Inescapable Wealth Generating Maintenance

17. Holistic Financial Planning What’s Your Process? Get your team together and figure out a time and process to make the financial plan happen. How do you integrate what you already do with this process?

18. Testing Financial Decisions The Seven Testing Questions include: • Cause and Effect • Weak Link Tests: social, biological, and financial • Marginal Reaction • Gross Profit Analysis • Energy/Money Source and Use • Sustainability • Society and Culture Cause and Effect Marginal Reaction Gross Profit Analysis Energy/Money Source and Use Sustainability Society and Culture

19. What’s the Point? Making Better Decisions Before making decisions, look at your Holistic Goal: 1. What are all the creative alternatives you could consider? 2. If you are facing a problem: is the proposed action/expense addressing the real root cause of this problem? 3. Will the action you are considering upset anyone whose support you need? 4. Which of the actions will bring the greatest return on your investment of time/money /energy (ie. bring you closest to your holistic goal)?

20. Holistic Financial Planning Starting Net Worth Monthly Income & Expense Ending Net Worth We plan until we get a result we like. Relieves stress, worry and anxiety. We are in control. We will make it happen!

21. Holistic Financial Planning 9 Steps for Financial Success #9 Plan, Monitor, Control, Replan #8 Asses ending net worth #7 Cash Flow #6 Plan & sort expenses (WIM) #5 Define weak link per enterprise #4 Plan Profit #3 Plan Income #2 Assess starting net worth #1 Review progress toward your holistic goal

22. Step 1: Assess Progress Toward Holistic Goal Logjam Is there anything keeping us from making SIGNIFICANT progress toward our holistic goal? (Across the operation) If so it gets first priority for time or money. This is a wealth generating expense. Often is leadership, attitude, debt, lack of capital

23. Step 1: Assess Progress Toward Holistic Goal Adverse Factors “Are other factors adversely affecting the business as a whole?” This is a wealth generating expense. Could be location, lack of reliable labor, competitive market, etc.

24. Step 2:Beginning Net Worth Assets: Inventory $200,000 Real estate $75,000 Equipment(list) $50,000 Other $200,000 Total $525,000 Liabilities: Bank loan $100,000 Op. loan $25,000 Total $125,000 Net worth $400,000

25. How to Increase Net Worth? • Increase Assets • New equipment • Livestock • Land • Supplies and Inventory • Cash on Hand • Decrease liabilities such as debts and loans

26. Step 3:Planning Income

27. Step 3:Planning Income

28. Step 4. Plan for Profit • Decide what you need to make, for the effort to be worth your while: I want a profit of $ 1Mor 75%. • How much Savings (buffer) do you need? • How much for Investing (wealth generating or addressing key problems like logjam)? • How much for Increased Net Worth? • How much for Improved Quality of Life?

29. Planning Income & Profit Profit A 50% Profit B 40% , but also reducing debt Income $100,000 $50,000 $40,000 Expense Debt Service $20,000

30. Holistic Financial Planning The 9 Steps to Financial Success #9 Plan, Monitor, Control, Replan #8 Assess ending net worth #7 Cash Flow #6 Plan & sort expenses (WIM) #5 Define weak link per enterprise #4 Plan Profit #3 Plan Income #2 Assess starting net worth #1 Review progress toward your holistic goal

31. Step 5. Financial Weak Link Resource Conversion Product Conversion Marketing Conversion Chain of Production Sunlight and/or raw resources including money Products and/or services Marketing of products and/or services

32. Step 5. Financial Weak Link Do you need to convert more sunlight/raw material to have something to make into product? Resource Conversion Product Conversion Marketing Conversion Chain of Production Sunlight and/or raw resources including money Products and/or services Marketing of products and/or services

33. Step 5. Financial Weak Link Are you making your raw materials into a product that you can sell, or are resources being left to “rot on the vine”? Resource Conversion Product Conversion Marketing Conversion Chain of Production Sunlight and/or raw resources including money Products and/or services Marketing of products and/or services

34. Step 5. Financial Weak Link Do you need more customers because you have havemore product than you can sell? Resource Conversion Product Conversion Marketing Conversion Chain of Production Sunlight and/or raw resources including money Products and/or services Marketing of products and/or services

35. Step 5. Financial Weak Link Resource Conversion • Wealth-GeneratingExpenses: • Education (about how to improve resource) • Capitol Improvements • Additional labor for resource conversion

36. Step 5. Financial Weak Link Product Conversion • Wealth-Generating Expenses: • Education (how to improve product) • Expense to get more efficient • Get more product per unit of effort or cost or better quality

37. Step 5. Financial Weak Link Marketing Conversion • Wealth-Generating Expenses: • Education (how to sell your product) • Change Enterprises (due to market conditions) • Time of Marketing • Brochure

38. Step 6:Prioritizing Expenses W: Generate wealth. Fix the weak link (or logjam or adverse factor). I: Inescapable. (essential and constant or morally obligated) M: All expenses that aren’t W or I. Maintenance.

39. Step 6: Inescapable Expenses I Expenses • Land taxes • Lease fees • Loan Interest

40. Step 6:Maintenance Expenses M Expenses • Living expense • Phone • Utilities • Repairs

41. Step 6: Prioritizing Expenses You want to free up as much money to invest back into the business in the best place to move you toward your holistic goal. When adjusting cash flow, cut maintenance first, then inescapable, then wealth generating. Logjam is last to cut. Brainstorm additional income sources before cutting wealth generating expenses.

42. Holistic Financial Planning The 9 Steps to Financial Success #9 Plan, Monitor, Control, Replan #8 Assess ending net worth #7 Cash Flow #6 Plan & sort expenses (WIM) #5 Define weak link per enterprise #4 Plan Profit #3 Plan Income #2 Assess starting net worth #1 Review progress toward your holistic goal 42

43. Step 7:Cash Flow

44. Step 7. Cash Flow

45. Step 7.: Cash Flow

46. Step 8:Ending Net Worth Assets: Start End Cows 250 head @ $800 $200,000 End: 300 head@ $800 $240,000 Hay 1500 tons @ $50 $75,000 $75,000 Equipment (list) $50,000 $45,000 Land $200,000 $200,000 Savings and checking $15,000$10,000 Total $540,000 $570,000 Liabilities: Bank loan $100,000 $90,000 Operating loan $25,000$20,000 Total $125,000 110,000 Net worth $415,000 $460,000

47. Step 8:Net Worth & Profit Profit=Increased Net Worth An Increase of $45,000 Can be Held As: Increased Assets Decreased Liabilities Cash

48. Net Worth & Profit Increased Net Worth Plus Living Improved Quality of Life. Are we satisfied?

49. Holistic Financial Planning The 9 Steps to Financial Success #9 Plan, Monitor, Control, Replan #8 Assess ending net worth #7 Cash Flow #6 Plan & sort expenses (WIM) #5 Define weak link per enterprise #4 Plan Profit #3 Plan Income #2 Assess starting net worth #1 Review progress toward your holistic goal

50. Step 9:Monitor and Control Your Plan • Monitor within 10 days after month’s end • Control within an enterprise • Replan if control is not possible 50