Meating our Potential: Productivity
Understanding your business
Understanding your business
To reach a point where a farm business is confident enough to invest in increasing numbers in their own herd a business must first understand how their business functions.
Understanding yesterday
The first step on the journey to understanding your business more effectively is about self-reflection.
Take the time to reflect on when your businesses performance has been at its best. When was it? What was your management system like? Were there any disease challenges? What did your supply chain look like? Did your nutrition look different? Were you using grazing differently? Etc…
This area underlines the importance of record keeping and the ability to look back on a year’s performance to analyse potential weaknesses or opportunities.
Adjusting for now
Undoubtedly one of the most useful exercises that any farm business can undertake is enterprise costings. These can be conducted by professional accountants, consultants, or by participating in benchmarking groups.
Enterprise costings can be as detailed as you need or want, they can start with an understanding of your total income for livestock for the year divided by your total expenditure for the year on that livestock. This provides a net figure and helps understand where the main costs and rewards are within a farm business.
ACTIVITY 1 – UNDERTAKE AN ENTERPRISE COSTING
As has been the case for generations it is impossible to predict the next seismic occurrence to disrupt the beef sector. Despite the relative stability of producing cattle on farm every year, the industry can be influenced by everything from conflict overseas, to excess rain. One of the key traits any business can build into their system is that of resilience. Resilience by its definition is “The capacity to withstand or to recover quickly from difficulties” – in other words “toughness.” One of the best ways to improve your resilience as a business is to develop a level of agility that allows you to react to opportunities.
ACTIVITY 2 – UNDERTAKE A SWOT ANALYSIS EACH YEAR
One of the simplest tools to get yourself into the right headspace is undertaking an informal SWOT analysis each year either by yourself or as a farm team. Map out the Strengths, Weaknesses, Opportunities, and Threats, your business could be subject to, and this will inevitably lead to a discussion as to how to build resilience in to help develop strengths, capitalise on opportunities, and resist threats.