You know, there is a lot of small towns all over the U.S. that don't have a very bright future. So consequently, people are always talking about economic development.
However, after being around a number of farmers from North Dakota where a lot of closed co-ops have formed over the past decade, I noticed the really sharp farmers were often emphasizing there are a number of reasons why you do not want to get involved in a project.
You do not want to start a business to provide jobs. You do not want to start a business to provide a service. You do not want to start a business to increase school enrollment.
Instead, they say you start a business for only one reason. That is to make money. And if you are successful at making money, all these other things will happen.
But if your primary motivation is for any other reason, you may have seriously limited your chances for making money while increasing your odds of losing money. And when that happens, you will fail at all objectives.
What do these guys mean? Well, let us say you want to put in a big dairy. And we want to do it in this county. But in order to get it in this county, you ignore certain problems that will constantly eat away at your bottom line. Frequently, these things fall into one of two categories. Either you have too much of the wrong thing or not enough of the right thing.
Say you don't have a lot of irrigation water. That could mean feed costs will be higher because of increased transportation costs. Or say you are a long ways from the processor. That again means more cost. Or say you have got very high property taxes in your county. And so on.
But in your effort to save the town, you have driven up your costs and you have given away efficiencies and economies that you will badly need in an extremely competitive business.
Sure, saving the town is worth something. But in making a business decision, you need to go slow on the emotion, the opinion and the desire for certain outcomes. You need to ask yourself, how low of a return am I willing to accept. Or how much money am I willing to lose, and for how long.
And finally, a friend of mine pointed out that there are 292,000 wheat farmers in the U.S.--people who grow any wheat at all--even one acre. Guess how many lawyers there are in the U.S.--lawyers who are members of the American Bar Association? 866,000. There are three times as many lawyers as wheat farmers. Which brings to mind another interesting statistic about lawyers. That is, 99% of all lawyers give the rest of them a bad name.