Ranching For Profit School Meets My High Expectations

Fodder for Thought

I “graduate” with better knowledge about ranch finance and the realization I must move on my goals.

Published on: February 6, 2014
 

In mid-December I told you about my decision to attend a Ranching For Profit (RFP) School, now a reality.

I went to one of these schools in Billings, Montana, January 19-25 with about 60 people. I was lucky to get in because more than 15 were on a waiting list and didn’t. This was one of the most popular classes RFP had hosted in quite some time.

The group had all ages represented, yet according to proprietor and teacher Dave Pratt the overall demographic of the group was on the younger side. He said youth is becoming a more common demographic among RFP students.

It was my first time at one of these schools and I think it will not likely be my last. I had high hopes going in from the exceptional reviews of friends and colleagues who are RFP alumni. I found the common themes they had voiced of "major paradigm shifts" and "life-changing experience" rang true throughout the week.

To help you, my readers, better understand my experience at the Ranching For Profit School I asked some of my friends (via Facebook) to submit questions to me of what they might like to know about the course. I'm answering the most pertinent of those questions as part of a two-part series.

Q: What ideas did you have going in that you did a 180-degree turn due to the course?

A: Surprisingly, this was not really a factor for me. Having the opportunity to be friends and colleagues with several RFP alumni previous to attending the school has already exposed me to many of the principles taught in the course. Attending the course reaffirmed those principles. However, what I think had the biggest impact on me personally was being able to witness the paradigm shifts occurring in other people attending who did not have my previous exposure to these principles. For them it truly was a life-changing experience or as it was referred to in the course, a breakthrough.

We were instructed throughout the week to ask ourselves daily this 'paradigm question:' "What seems impossible to do, but if could be done would fundamentally change your business?" A major emphasis of Ranching for Profit is helping its students see past the mental arbitrary boundaries we create for ourselves, to the possibilities that could exist if we believe we can. Instead of saying "I can't afford that," you learn to ask "How can I afford that?" In order to become a great business you have to act like you already are a great business. Shifting paradigms is a vital step in getting there.

Q: In the context of this school, what's the biggest reason (if there is just one) that most ranches are unprofitable?

A: Most people will tell you that there is not just one; it's a multi-faceted issue.

Pratt began the Billings school with a perplexing statement that pertains directly to this question, "North American ranchers are the most productive and least profitable in the world." He's also been known to say "Most ranches are nothing more than a collection of assets and a bunch of jobs."

What he means is in the ranching business conventional thinking leads us to believe the key to success is working harder and increasing efficiency. Good business sense, however, will tell you that these preconceived notions are not true. At RFP you soon realize that the real key to success in a ranching business is working smarter, being effective, and treating the ranch as a business, not a lifestyle.

In addition, the notion that ranching is a lifestyle and not a business keeps many ranches from ever reaching their profit potential. In the end, only a sustainable business can support a sustainable lifestyle. It's the mindset of the owners of those assets and jobs which will determine whether they work together to form a business or not. Again we come back to this notion that in order to become a great business you have to act like you already are a great business.

Q: What do you personally feel that you can do now that seemed unattainable prior to taking this class?

A: I had three major breakthroughs in this course. The first was an increased understanding in the differences between economics and finance and how they relate to ranching. Going into the course I felt I had a weak understanding of business economics and finance. I never felt the ag business courses in college had given me adequate knowledge in this area. RFP explained it in a way that was easy to understand, but more important how all of the other factors related to ranching, such as grazing and animal nutrition, relate back to the economics of the operation. This holistic approach really connected the dots for me!

The second breakthrough involved my own realization that being involved in the production end of the cattle business is very much still a goal of mine.

The third was it is not necessary for me to own either land or livestock to get started in the business. In fact, in some situations, such as a custom grazing business, the reduced overhead costs from not owning land or livestock can actually lead to higher profit potential. This helped me to realize I need to start actively planning to make my goal a reality, instead of waiting, hoping and thinking someday I will get around to it.

Stay tuned next week as I continue to answer questions about my time at the Ranching For Profit School. I will also be happy to answer your questions pertaining to this course and/or my experiences there, just leave them in a comment section below.