We recently met with Billy Bothways who drove home the need to have focused management and strategic planning. He’s a fantastic farmer who has a very profitable operation. In the last couple of years, however, Bothways seems to be struggling with focus. In the past year, he’s called us numerous times asking our opinion on various scenarios and opportunities he has found. This is great and exciting to work with a progressive client that is ambitious and excited about the agriculture industry, but the problem we realized in our last analysis of the operation however is that Bothways has lost his focus.
Bothways currently runs a 5,000 acre grain farm built up from a 1,200 acre operation 15 years ago. He’s now 40 years old and always knew where he was going — up. The problem is now that’s he’s where he wanted to be, he seems to be running in all directions not knowing where to go next.
Bothways wanted us to look at expanding into a hog operation as he felt that hog barns were cheap and now was an opportunity to get in at a low cost. Two weeks later, he called us and said the neighbour, Tom Tiredndun, wanted to sell him 1,000 acres of grain land and this opportunity needed to be looked at. Upon arriving at the yard, we found Bothways in the shop frustrated trying to thaw out two frozen tandem trucks. We looked around the shop and it appeared to have been a good investment because it was full! We started out the meeting by Bothways adding a third option to look at — retirement. He wanted to know what the tax implications of retiring and selling his company were. This option caught us by surprise and stopped us abruptly like a seeping loader when it hits the road. We realized that the real question was what are the goals motivating the decisions on the farm?
We began the discussion by recapping with what had brought him this far. Bothways agreed that he always has had a general goal to get to 5,000 acres. He has enjoyed the past 15 years and felt he was always working with a purpose and knew what needed to be done. He indicated he didn’t always get there as fast as he had projected but knew he was making the right decisions at the time they were made and had never second guessed himself. He felt that in last couple of years he had been coasting and been looking for something but was not sure what it was.
This problem reared its head during our discussion. An operation with focused management is not looking at selling out and expansion at the same time. These are two totally opposite directions. If management is focusing energy looking on the Internet for farms for sale to purchase and then looking at a retirement
property in Arizona, one of these two tasks is a waste of time. It is a waste of time as one of these options will not be completed. This approach is all too common on many farms but can easily be avoided by concentrating on setting goals. If we look at some of the really successful operations we have worked with they are
definitely focused. They not only use their capital efficiently, but also their time.
Management is a finite resource like any other, and if it is wasted the business will pay the price. Setting goals and focusing management on tasks that achieve goals of the operation will produce results faster, more efficiently and consistently than randomly chosen opportunities. Often a loss of focus is a result of a plateau in achieving goals. Many goals have been met and not enough new ones set. Recognizing the problem is the most important and avoiding an approach that lets the operation drift sideways for an extended period of time will yield huge dividends.
AndrewDeRuyckandMarkSloane managetwofarmingoperationsinsouthern ManitobaandarepartnersinRightChoice ManagementConsulting.Withover25years ofcumulativeexperience,theyoffersupport infarmmanagement,financialmanagement, strategicplanningandmediationservices. Theycanbereachedat [email protected] and [email protected] or204-825- 7392and204-825-8443
If management is focusing energy looking on the Internet for farms for sale to purchase and looking at retirement property in Arizona, one of these two tasks is a waste of time