As a veterinary consultant, I always thought that pregnancy examinations, vaccinations, and record-keeping were top priorities. Now, after three years as a dairy farm owner, it's interesting to note how some of those priorities have changed.
Actually, I have added to the list. New priorities - basic necessities really - include having electricity to run the parlor, keeping the mixer wagon operating properly, receiving prompt feed delivery, and having well-trained employees and a banker who supports my business. I've also become aware of several areas of management that I was not aware of as a dairy consultant.
Use time wisely
New projects keep emerging every day. Beyond that, the steady stream of people wanting to see me to explain their products was the most shocking thing that I experienced. While it is important to learn about new or existing products, the demands must be structured within logical time constraints. Perhaps your nutritionist or veterinarian can help screen products. You may have to compensate them for this service, but having a professional opinion is certainly worthwhile. If you feel that you must see vendors, have them schedule an appointment and set a time limit.
To deal with other issues involving time management:
- Make time to review your business plan on a periodic basis. Successful businesses grow from detailed planning and implementation of those plans.
- Make time for yourself and your family. Being a martyr to your farm is not impressive to anyone but yourself.
Invest in employees
One cannot fully appreciate good employees until they have suffered from bad ones. As a consultant, it is easy to advise people on how to structure tasks. But, as an owner, I have found that maintaining consistency in employee performance is often the real struggle. It takes an on-going effort to ensure that each employee has the necessary training, education, and motivation to perform assigned duties consistently day after day.
The cost of attrition is rather eye opening. In fact, the price can be as high as 15 percent to 20 percent of your total labor budget. That makes employee selection and training crucial.
If a dairy employs people who do not speak English, then management should make some attempt to learn the basics of their language. Credibility resides with managers who can communicate without a translator. I have found it difficult to learn Spanish, but my employees recognize my efforts. They are more willing to perform their jobs to my satisfaction now that I communicate directly with them.
Face it, employees are just as important as cows. Too often, we treat employees as a renewable commodity and the cows suffer for it. Take the time to appreciate your employees. A simple handshake each morning makes them feel a part of the business. Employees need to feel appreciated.
Get a good banker
As a consultant, I was not truly aware of the impact that a financial institution has on a dairy business. Debt structure can make or break a dairy farm.
If you want to structure debt for growth, then you must supply the lender with data to support your loan demands or loan terms. This includes budgets, inventory management, production records, short-term goals, and long-term goals.
I was fortunate to find a banker who would help my business grow. His demand for information, tightly constructed budgets, and quarterly farm visits has made me a better manager.
Unfortunately, too many farms cannot provide the data required by aggressive lending institutions. Financial records are the keys that will unlock the bank's safe. Do not expect a banker to offer aggressive terms if he can't understand your business.
Invest in relationships
What I have learned most is that dairy farming is a business of relationships - involving family, employees, vendors and cows. We make our lot in life, and I would encourage all dairy farmers to fully evaluate their situation and find solutions that will help them gain the greatest sense of fulfillment. Life is too short to be unhappy.
Paul Johnson is a veterinarian and consultant in Enterprise, Ala.