Mount: Developing a ranch business starts with the tough questions
As many producers are focused on calving, buying bulls and other winter work, University of Wyoming Extension Educator Dallas Mount urges producers to look deeper into their businesses this time of year.
“As producers, we love to talk genetics, and we love to talk about what kind of genetics we are using,” Mount says, noting that ranchers always like to talk about their cattle. “I would call those decisions fourth-tier decisions. There are other things that should be considered first.”
Mount asserts that first ranchers should determine what the primary purpose of the ranch is.
“This is an interesting question, and a lot of ranchers tend to look at it as a touchy-feely question, answering, ‘We ranch because that is what we do,’” Mount says. “When we get right down to it, though, the purpose of any business is to serve a customer.”
When answering the question of what the purpose of the ranch is and why we are ranching, Mount notes that often producers make a list of things that are mostly self-serving.
“People will say it is a lifestyle for their children, that they are carrying on a family legacy, it is what they enjoy and it is what they know how to do,” he says, “but if we want to make a great business, it has to serve someone other than the owners.”
Many prominent business management experts carry forward one theme – the underlying principle is that great businesses do something really well.
Mount cites Jim Collins, author of Good to Great and Built to Last, saying, “The thing that great businesses do really well is that they have identified a purpose beyond profit and that purpose has a greater good beyond the owners.”
He further asserts that those who just desire to serve themselves through the ranch will never reach the status of a great business.
“If someone comes to work for us on the ranch, they likely aren’t going to bring their heart, head and their passion if the goal of the ranch is to make us rich,” he continues. “The business has to serve a purpose beyond profit. What is the purpose of our ranch?”
“The first question gets to the mission of the business,” Mount explains. “The second question we have to ask gets to our vision. How are we going to accomplish our mission?”
The vision of the ranch essentially says, “We are going to accomplish a, b and c by doing x, y and z,” Mount notes.
Answering tough questions
For a ranch business to answer these questions, however, Mount notes that it will likely take more than one 45-minute lunch meeting.
“We have to start asking the players involved why we are doing this and wait for their answers,” he suggests. “The more we ask and the more we listen and wait for a response, the better the answer we will get.
He encouraged ranchers to ask the key people involved in the business for their input but to not necessarily expect an answer right away. Rather, he says the best way to get a good answer is to really think through the process.
“The process is the most important part,” Mount says.
By answering the bigger, business management decisions, Mount says that on-the-ground decisions often become easier.
“When we get to the point of whether we are going to run cows or stockers, hopefully someone can ask, ‘How does this tie in with our mission and vision?’” he says. “Then we can ask if it will accomplish what we want to accomplish. Our mission and vision provide us a direction.”
Mount says that if a decision doesn’t further the vision and mission of the business, the answer will be clear.
Mount emphasizes that the questions of mission and vision aren’t easy, but they are very important for a ranch, and there are tools available to help producers make those decisions.
“A lot of what we do in the High Plains Ranch Practicum and in the Ranching for Profit school helps people to understand why these questions are important and how to answer them,” he says.
He also notes that UW Extension is available to help producers answer these tough questions.
“After we’ve decided why we ranch and what it is that we are doing, then we can get into exactly how we do it,” Mount says.
After determining what the mission and vision of the ranch are, UW Extension Educator Dallas Mount notes that the ranch can then look at whether or not the ranch should own cows or if they should do something else, like raise hay.
“In asking if we should run cows, we need to determine if they should be our cows or someone else’s cows,” he continues.
Then, management and marketing decisions should be made.
“Once we decide that we are going to run our own cows,” Mount says, “we can start asking questions like, when should they calve? Will we sell calves or yearlings? When should we wean? What kind of cows should we run?”
These vital decisions answer questions about the production schedule and marketing strategy on the ranch.
Mount notes that many people focus on production questions without determining their direction first, which can cause problems in the long-run.
Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at firstname.lastname@example.org.