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Working On The Business Vs. In The Business – Humbug!

business strategies for cattle farmers

We’ve all heard the saying that we should spend time working on the business not just working in the business. In fact, I printed the saying off in big letters and have had it posted on the bulletin board by my desk for the last 4-5 years.

The wisdom of that advice is obvious and sound. When I look around at the people I consider greatly successful, this is the factor that really distinguishes them from others in my mind. Work ethic will always be important, but many people work extremely hard and barely get by. But working smart, and working on the things that really can return large margins, seems to be the thing that separates the really good managers from the average managers.

But following this credo can be difficult at times. For instance, this week I had a hydrant I’d been using to water a couple hundred cows on cornstalks, freeze and crack. The backhoe guy and I thought it would be a simple, two-hour job, but we found a line that wasn’t supposed to be there, and one wreck led to another. To make a long story short, I’ve been hauling water for a week now, and with the Christmas holiday shutting down our progress in acquiring the necessary parts, it looks like I may be hauling water for a while longer.

Throw in the fact that some of our help went home for the holidays, and all of a sudden it takes a 12-hour day just to keep things running. Then there are the kids’ activities and holiday plans, and suddenly all of my plans to work on the business have been swallowed up by demands of working in the business.

Now, if that happened once, twice or even three times a year, it wouldn’t be so bad, but it seems to be more the norm than the exception. I understand that perhaps this signifies I don’t have enough hands around here for the work that needs to be done. However, I’m pretty confident that our situation is fairly typical of most operations.

Part of my problem has always been a combination of cash flow and my inherent tendency to be a cheapskate. I’ll admit that, at different times, I’ve tried to get away with doing less than is recommended, but I hate writing checks. Looking back, I know I likely saved pennies that cost me dollars at times.

If an extra employee equated to 10 more marketable bulls on an annual basis, then I could probably pay him/her pretty well. If that extra person equated to 10 more marketable bulls and more time to do some of the really important things that potentially could make the company significantly more dollars, then maybe I could pay a whole lot more.

Part of the problem is that it isn’t an easy calculation to make. I’m sure we would get more cattle bred artificially, but would that be an increase of 1% or 5%? I imagine we would have one or two additional live calves, and perhaps we would more quickly catch 10-15 calves that were getting sick, and maybe save 1 or 2 more. I honestly don’t know if some additional help would return $50,000 or cost the operation $25,000. I guess I’m just going to have to sit down with my banker and make the leap.

I’ve learned that there are three kinds of costs. There are unnecessary costs, which should be cut mercilessly; and borderline costs, which require good management skills to determine what their effects are on your operation. And then there are necessary costs, which can’t be cut as doing so would play into your profit. It seems like I’ve cut a lot of the latter in my time.

I’m well known in my little part of the world for hating equipment. I’ve always been too cheap. My tractor is a John Deere 4020 and is nearly 50 years old. “Iron depreciates” has always been my mantra, but I shocked the world a few years back when I bought my wife a hydraulic chute for Valentine’s Day. It was the best investment I’ve ever made – the animals are happier and healthier, the kids are happier, I think my wife is happier, and so is the help. That new chute has saved hundreds and perhaps thousands of man hours.

The old manual chute was dangerous and exhausting. Any economist who claims my wife’s hydraulic chute is an unjustified expense simply doesn’t understand the math, or isn’t a romantic.

I have a neighbor who has started to run nothing but new equipment. It makes his employees happier, has eliminated a mechanic, and the strategy must be working because he is growing and expanding year after year. I guess it just goes to show that there are expenses and there are investments.

I will never forget the advice of a very good friend. He said, “I’ve never known anyone who paid too much for a good bull, a good horse, or an engagement ring for the right woman.” His point was that the key was the quality of the item you were investing in and not the price. I think that’s my biggest problem – I analyze costs too much and investments too little. It sounds so easy, but working on the business vs. in the business can be a difficult challenge some days.


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