Dan Airely, a behavioral economist at Duke University conducted a silly experiment with serious implications. The experiment involved money, Coca Cola and college students.
We tend to build our businesses around the exception rather than the rule. If an office in town managed their business that way, they’d have fire trucks circling the block 24/7 because, after all, someday a fire might break out.
An Idaho rancher wrote me an email asking for my advice on how to navigate a collapsing cattle market and an unpredictable future. He asked, “What do you do when money is tight and the future is uncertain?” Our natural reaction is to tighten our belt and try to ride out the storm. But is that the best strategy?
Asset rich and cash poor describes the financial reality of most ranchers. The advice we get on making range improvements usually makes our financial situation even worse.
In the last ProfitTips I wrote about a young RFP alumnus who was concerned that unless he shook things up, he’d get stuck in a rut. I challenged him that maybe the rut he was worried about was actually his groove.
Last month I met with a young Ranching For Profit alumnus who had accomplished some big things in a short time. He was leasing several ranches and running hundreds of cattle and, if I remember right, about a thousand sheep. “I don’t want to get stuck in a rut,” he explained, and said he’d take on anything that could make a profit.
Most “ranch managers” aren’t managers. They don’t do the work of a manager, they don’t produce the results a manager would produce and they aren’t paid what a manager would get paid. The result isn’t just poor management. Most American ranches aren’t managed at all!
This gallery contains 2 items.
I am a young rancher and have grown my heard to over 100 cows over the last four years. In addition to my own operation I earn additional income working for my Dad on his place. I owe $15,000 of my cattle loan, have land debt of about $250,000 over a 13-year term and a mortgage on our home of $85,000 with a term of 22 years. I have read and heard great things from the RFP school but I am just scraping by and don’t know where I could get the money to attend. Can your school help make an outfit my size self-supporting? Do you have any suggestions?
Kathy and I are headed to Big Sky Montana for our Summer Executive Link meeting. Nearly 200 Ranching For Profit School alumni are participating. While EL members are engaged in their board meetings, I’ll be leading other Ranching For Profit School alumni through a program on a topic that fascinates me … the psychology of risk.
Earlier today someone called me asking for advice regarding a bid he was about to make for a property he wanted to rent. The property could support 200 cows from May to October and the term of the lease would be 10 years. He hoped that I would have some knowledge about rents in his area (I don’t) and some suggestions for determining what he should bid (I do).
Here’s what I told him: