The Cost of Saving Money
OPINION
Have you ever considered the “survival mode” we as business owners constantly live in? We are always looking at minimizing our expenses and using that line on the P&L to live off. Without investing in our bread and butter, the thing that produces our income, that line on the P&L is almost always on a steady decline.
As the cost of doing business continue to rise, if we only live off the monies we didn’t spend, the margin of profit will drop as the value of the dollar increases. The reality is we need to invest in constantly growing our “golden goose”. In my business, that means continued education in products to provide better knowledge to clients, investing in equipment and services that will help me serve my clients better.
In your business as a livestock producer, that may look like investing in products that you haven’t used in the past. That may be due to the price or availability, or a trusted advisor telling you its not worth the expense. I think its human nature to stick to what we know or what everyone else is doing. It’s acceptable and reasonable and will probably provide a decent return on most years. But, to tell yourself that you will operate the same way you have in the past while inflation has cut your profit margin in half and still be around in five years, is burying your head in the sand. Change doesn’t always mean more expensive. Change can be a management technique adjustment that has been used on your operation for five generations, unquestioned. It can mean changing which direction you rotate pastures or on what day of the year you process your livestock or start breeding.
Lately a quote from Henry Ford continues to play through my head.
“If you always do what you always did, you'll always get what you always got"
- Henry Ford
This week we are witnessing a $100-$150 per cwt difference on steers that received one round of shots compared to two. We are seeing vast differences in pricing from those calves that are part of a certain vaccination or nutrition program, verified natural and more. Being able and willing to invest in your operation almost always advantageous and should always be at least discussed. Marketing matters, staying in touch with your marketer matters. Investing in your livestock matters.
May 16, 2023 TLAY Market Report
I know what’s coming next and if you’ve done any business with me, you know also because I express this concern at each transaction. “He’s a salesman trying to sell, of course he thinks I need to spend money”. Well, it is true that I make a living selling products and don’t charge for my expertise, but what’s also true is the values I started my company on. A cornerstone of CLS that is unwavering is the fact I will never sell you on anything you don’t need or can’t afford. As my clients have heard countless times since our conception, “I’d rather build a relationship than have a one-time sell”.
Coming out of a historic wet season is a great time to focus on investing in your livestock. With cattle prices a record high, now is a time to set a foundation for years to come. Speaking with as many producers as I do, I recognize that many have a very well throughout out, streamlined program that works for them. If you fall into that category, I’m happy for you and look forward to witnessing your continued success. If you feel like you are falling short in any part of your program, from nutrition, pasture, time or expense management, or even marketing, feel free to reach out to discuss if CLS can provide support in your program.
