Yesterday was a good day. We pulled bulls from a group of cattle, I’ve been custom grazing for long-time customers who are now friends. The day started early with some neighbors loading horses before first light and making our way up the mountain to the pasture. After riding a circle, we had 3 of the 5 bulls in before lunch. We enjoyed lunch under the shade of the stock trailer and the cattle owners arrived to haul the bulls home. We switched to a pickup to scout for the remaining two bulls, with no luck we headed back down the mountain with 3/5th of our work complete. Even though we weren’t fully successful I thoroughly enjoyed the day.
In the Ranching for Profit School we teach that defining Owner Value is a critical step in ascertaining the mission of any business. Owner Value is defined as the things we put in and the things we take out, each of these can be positive or negative. For example, yesterday I invested time, money, and labor. From which I took away enjoyment, companionship, and a sore butt. For many, days like yesterday are why we ranch.
Most of us don’t ranch intending to become millionaires but rather to do work we enjoy, with people we like, producing a product we are proud of and stewarding land that we love. These owner values may be enough for some people working on the ranch, but often owners off the ranch are likely to have different priorities of owner value. Their priorities are not wrong, just different. I don’t think anyone would object if we could produce the owner values mentioned above and also produce a strong economic profit, with good cash flow, while balancing reinvestment back into the business and building financial reserves.
It is critical to develop a clear understanding of the owner values for the business. At Ranching for Profit, we teach a process for discussing owner value where each owner describes the investments they are currently making and the returns they are currently receiving. We also discuss which investments or returns they’d like to increase or decrease. These conversations then lead to making a plan that allows them to move towards those identified objectives. Developing a plan to achieve these owner values is the role of competent management.
Yesterday was a nice reminder of how fortunate we are to live in rural America and work with good people, animals and land. In the craziness of the world today and the pressures of markets, droughts and political upheaval sometimes we need to take a moment to reflect and be thankful. Now, I hope those last two bulls walk out from the hole they were hiding in!
