3 Questions All Sheep and Beef Farmers Need to Answer

Posted by Brendon Walsh on 27 June 2014

All sheep and beef farmers need to answer these 3 questions accurately if they really want to get their hands on that consistent profit that is proving so elusive in our industry. Moving their businesses forward is not only important, it is crucial to their families futures.

Here they are:

1. What specifically is sheep and beef farm profit, and therefore how is it really calculated?
2. How is profit actually generated in a sheep and beef farm business? (In other words what are the mechanics of creating a profit or a loss in a sheep and beef farm business?)
3. How do you implement this in your business to ensure profit flows into it, every year?

Have a go at answering these and leave a comment at the bottom of this blog post - I would appreciate your thoughts!

You see, if you as a sheep and beef farmer are not clear on these questions, you have a pretty low chance of having profit turn up consistently in your business. Let me take you through what I mean......

Not knowing the answer to Question# 1 renders the remainder pointless. To have a shot at creating profit means you must know how it is calculated. If not (and most farmers don't), why would any decision you make on your farm definitely result in a profit? How do you know how to make the outcome of the profit equation positive if you don't know what the equation is? I have unfortunately seen many farmers make decisions and blindly follow industry opinion without asking themselves this basic question. Lack of clarity means they are choosing (at least subconsciously) to decrease their chances of having profit flow in to their businesses.

The correct answer for Question #2 comes from that clarity and lays out the pattern of how a farmer goes about making the equation positive - i.e. the steps that need to be taken by you to open up the laneway, allowing profit to drive on in and stick around. The 6 Profit Principles are actually quite simple and if they are followed, profit is generated. If they are not followed, profit is not generated. That makes them kind of important!

The answer to question #3 uses the previous answers to help each individual farmer define how they implement the pattern (6 Profit Principles) into their own systems. Each will have their own climate patterns, livestock market patterns, skills and locational challenges and opportunities. Having a solid Season Plan keeps your main parameters visible and contains flexibility with pre-prepared options in case of variation, allowing you to act clearly and with purpose.

If this all sounds a bit technical, I make no apologies. It is actually quite simple if you are prepared to understand it and take action. As the owner of a multimillion dollar farm business you just need to know this stuff if you want that multi-million dollar business to provide you and your family with what you really want. You will have great confidence about where to invest your energy, your physical effort, your money and your time. If you don't know this stuff, the outcomes will be average at best!

To make this happen in your business, you not only need the knowledge, you need a strong and winning system to help you consistently learn and apply it. In my next blog post I will cover some of the basics of this, but in the meantime I would love to hear your answers to these 3 questions above. Please leave your answers and comments below!