BUSINESS SUCCESS: WHAT FACTORS REALLY MATTER?

Presented Paper, Southern Agricultural Economics Association 35^th Annual Meeting,
Mobile, Alabama, February 1-5, 2003.

Business Success: What Factors Really Matter?

Greg H. Kaase, Dean A. McCorkle, Steven L. Klose,

Joe L. Outlaw, David P. Anderson, and, George M. Knapek*

Abstract:

This paper provides a comparison of successful and financially distressed producers
based on the data from more than 400 individualized financial analyses. These objective
variables are combined with subjective observations of management styles and attitudes
to provide unique identification of the factors most influential in the success of Texas
producers.

Farm management consultants, management economists and others present discussions of
the factors that affect business success. Generally, numbers one and two on the list would be: 1)
debt load and 2) profitability. While few would disagree that these two factors are important, it
would be helpful to know if these are really the most important. And, if there are other factors
that we might be missing. A study of primary data collected from producers is needed for
analysis to uncover the factors most important to business success. The objective of this study is
to identify the factors that are most common to successful agricultural producers in Texas.

In Texas, the Financial and Risk Management Assistance program (FARM Assistance) is
a unique combination of a state-of-the-art computerized decision-support system and extension
risk management specialists working one-to-one with producers to provide individualized
economic and risk assessment evaluations. Alternative management plans and new technologies
can be analyzed relative to their risk impacts on the financial condition of the operation over a

* Authors are Risk Management Specialist, Risk Management Specialist, Assistant Professor, Associate Professor,
Associate Professor, and Risk Management Specialist.

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