"What we need to do to prepare our businesses for the future is to manage our expenses."
— John Lagemann, vice president sales, John Deere

The Year Ahead. The core ag markets are in a cycle similar to that of the 1970s. Gross farm revenue on the core commodities and livestock in 2007 will probably be up 16-17% over 2006.

While gross receipts are at all-time highs, so are expenses, though margins are still good enough to result in good profits. If there's a concern we have, it's how well the producers control their expenses, whether it's fuel, fertilizer or equipment. At the same time, it also offers us — manufacturers and dealers — an opportunity to help our customers manager their expenses.

Planning for the Next 5 Years. I would break it out into a strategic view and a tactical view. Strategically, I'd be asking what do I want to look like in the next 5 years. What do I want my business to be? This is the kind of conversation dealers should have within their organizations and also have them with my major suppliers to see if there's a compatible view.

On the tactical side, each and every day I'd be preparing my dealership for the future by managing expenses. I'd be figuring out how to become more efficient and effective in my operation. When you can manage your expenses, you have a better opportunity to manage your customer base. When you can focus on your customer — and we all represent a lot of different market segments — you can figure out their unique requirements. The businesses that satisfy those requirements are those that will be around in the long term. When you manage your expenses, it gives you the ability to determine your own destiny.

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