It has been noted that dairying represents a great way of life when it is run as a business, but it can be a terrible business to be in when it’s run as a way of life. The last four years in the dairy industry have demonstrated this to be more true than ever! The days of leisurely dairying are gone forever, and while we have gone from 60,000 dairies in the U.S. 20 years ago to our current level of about 40,000 operations, will it stop there? Not likely.
While I am optimistic about the future of our industry, it is becoming more important than ever, as dairy operators today, that we continue to spend time “in the business.” However, I believe it is becoming imperative that producers also start spending more time “on their business.” The industry has become complex enough that we all need to be watching 10 different items at one time.
This has become difficult to do and often can seem beyond the capability or, at least, beyond the time availability of most operators. This is the point when surrounding yourself with a great Team becomes essential. Now, you might be thinking, “I already have a great Team. My herdsman has been with me for 15 years, my wife does a great job with our bookkeeping, and I’ve used the same nutritionist from XYZ Feed Company since 2009,” but are you as certain of your business’ results as you were ten years ago? Building an even stronger Team can help here. You may even be thinking: I’ve been barely cash flowing, but I see my neighbor buying a second or third dairy…
HOW IS HE DOING IT? I CAN TELL YOU HOW.
During the last 20 years, I have been working with producers across the U.S. to help them accomplish five tasks:
1. Develop an operating plan, based upon sound business principles & well thought out decisions.
2. Create a sound financial plan that clearly outlines what our objectives are, when we plan to achieve them and, more specifically, how we will complete each of them.
3. Along with this, we have assisted clients to obtain the financing necessary to hit these targets.
4. Develop management teams that exhibit a stronger sense of support & camaraderie, all with the improvement of the Clients’ results in mind.
5. Measure results in comparison with their plan in a timely manner, e.g. monthly or quarterly.