Overheads
My last ProfitTips article focused on the difference between being productive and being profitable and I used gross margin as a measure of profitability of an enterprise. In introducing gross margin I made the statement, “The best measure of profitability that I know of, is gross margin per unit.” I misspoke … or mistyped … […]
Read MoreGoing Backwards Working for Wages
I was having a conversation with a ranch family the other day about doing their own trucking. They haul cattle to corn stalks and back each year, so they hire about 20 loads hauled to get it done. They were running numbers thinking about what owning a semi and cattle pot (trailer) would cost. They […]
Succession Expectations or Agreements?
Transitions are hard enough. A lot of folks make them tougher by making assumptions and building expectations. We can remove unnecessary drama and angst by turning our expectations into agreements. An expectation is something that either you or I have. An agreement is something you and I share. In the short run, expectations are convenient. […]
Want To Keep It? Then Build It To Sell It.
Stan Parsons wrote, “If you want to be a cowboy get a job.” A business owner’s job isn’t to put up hay, work cattle, or build fence. It is to build a business. We hire employees to produce results that contribute to customer and owner value. When business owners hire themselves to work in their […]
Professionalizing Your Ranch
There are two types of athletes, professionals and amateurs. The professionals get paid to play. The amateurs have to pay to play. I look at ranches the same way. The professionals get paid to ranch. The amateurs subsidize their operations with unpaid family labor, off-farm income and inherited wealth. Some people balk at the idea […]
A True Story About A Real Manager
About 15 years ago I met an absentee owner who was responsible for a family ranch that was losing money. It had lost between $200,000-$300,000 year after year for a long time. Over those years she’d made several threats to the two managers that if things didn’t turn around, the family would have to sell […]