$100 Per Hour WITB
In the Ranching for Profit School we make clear the difference between WITB (Working In the Business) and WOTB (Working On the Business). We often say WITB, is the $10/hr work and WOTB is the $100/hr or more work. It is critical to get the WOTB done, but WITB needs to be prioritized into the high value tasks as well.
You might be surprised to find that you have some WITB jobs that are producing value of $100/hr or more. That doesn’t mean you’d pay someone that hourly wage, but you need to structure your business so that the labor is doing tasks that create good value, not just busywork. Perhaps someone on your team spent 3 weeks last month fencing on a lease that you are paying way too much for and it only created $500 of margin to the business, but each year it costs the business $2,000 in additional labor. If there isn’t a way to change this, you are better off getting rid of the lease and finding something else that will create more value for your business.
Getting good at grazing often involves a huge investment of labor. Let’s look at the example of set stocking a 200 acre pasture that is producing 2,000 lbs of forage per acre vs grazing it with higher stock densities and shorter graze periods. When graze periods shorten and stock densities increase, harvest efficiency goes up. Harvest efficiency is the portion of the total biomass produced that is consumed by a grazing animal. On the example pasture a graze period of 30 days or longer would produce a harvest efficiency of 60%. By moving to 1 day graze periods the harvest efficiency would move up to around 85% creating more grazing days per acre. See the math on the examples below.
In this case, shortening the graze period through moving some fence created $167/hour. Pretty motivating to do some WITB when you can put your finger on the value created.
At every ranch there are WITB tasks that are not creating value, maybe even costing the business money. When you identify them and stop doing them, you’ve freed up time and perhaps can liberate some capital. Before you make your “to do” list longer, you should make your “stop doing” list first. With the remaining WITB tasks, identify which will create significant value and focus there. In the comments below describe the highest value WITB jobs your business does and the ones you have stopped doing, because for your business they were a waste of time.