26 Farm Management tips from Scott Nicholson's recently completed Nuffield Scholarship
- By: "Farm Tender" News
- Hay & Fodder News
- Aug 12, 2018
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By Scott Nicholson
After completing my Nuffield GFP (Global Focus Programme) I was asked, “what are the keys to successful agribusiness management from your learnings so far?”. So here are my thoughts -
1. Farmers today more than ever need to capitalise and make money at others expense. Plan for this going forward and invest in areas which allows you to take advantage of others before someone takes advantage of you.
2. Manage and understand your RISK. Take risks where and when you can but make sure they are calculated. Leave them alone when risk is too great or timing is not right. Risk = REWARD or REGRET, therefore big risk equals big reward or big regret.
3. Remember it is your business and you have the most at stake. Do not let others make decisions for you, let them help with YOUR decision making. You will forgive yourself far quicker than you will someone else. Own your decisions. We all like to blame but it is not healthy.
4. Relationships are important. First and foremost, look after your family relationships, they are the most important. Second work to develop business relationships and work to utilise when possible. Remember with all relationships, both parties need to get something out of it.
5. Don’t hang around with negative people. Find people with a positive can-do attitude. Get help in the areas you need. Mentors can be a valuable resource if you find the right one.
6. Know who your customers / consumers are and be aware of what they want. Provenance is becoming very important and the Clean/Green image is becoming extremely important.
7. Question the value of day to day production management decisions and focus on the long- term business planning. Big decisions have big impact. Focus on the destination not the towns you go through to get there. Things may happen which may change your route but the destination can still be the same.
8. Financial reality. You did not lose it if you never had it. You did not make it if you have not got it.
9. You do not need to be the first to get involved with new ideas or technology. However be an early adopter of the things that show promise or have been proven to work.
10. Benchmarking production figures means nothing unless you also benchmarking financial performance. Producers struggle to consistently stay in top 20% from year to year however financial performance is much more consistent.
11. Understand your management, leadership and personality type/style. Work with it and develop where you need to. Know your weaknesses and know how to read and evaluate others. Then when it comes time to do business you will have a greater chance of things going your way.
12. Treat everyone with respect as you never know what is happening in other people’s lives.
13. Enjoy the wins (good decisions) at least as much or more than you dwell on your losses (not optimum decisions).
14. Understand the difference between a bad decisions and decisions that turned out to be not ideal.
15. Do not get caught up in chasing markets. Do what you do and do it well. Evolve over time according to long-term financial performance, do not get caught chasing current market spikes.
16. The most profitable operators don’t always have the most expensive or newest equipment. You need to find the balance between investment in depreciating assets and having the equipment you need to perform your operations in a timely manner.
17. Think optimal not biggest, best or most.
18. If you wish to create wealth rather than simply being asset rich, you need to pay tax.
19. Always remember that all involved in a supply chain need to be profitable to ensure longevity. Shortening supply chains can work but is not always the best option.
20. There are opportunities in all industries at all times. Especially in the bad times
21. Value your time.
22. The first impression of businesses and farms is generally a direct reflection of their performance. A well organised, neat and tidy farm is generally a well organised business. Just remember there is a difference between neat and tidy and fancy new machinery.
23. Given the opportunity ask the hard questions. Generic questions will only ever get generic responses.
24. Be careful looking over the fence, you never know other businesses situations, therefore making comparisons pointless. Debt?, Succession over generations? Who owns what?
25. Just because you see others do it, it does not mean it is a good idea. If the older generation teaches us how to farm we are going to farm like the past not the future. Do not get me wrong, we need their experience and years of knowledge but we also need to evolve.
26. If you have the opportunity invest into areas that not only make financial sense but build long-term resilience into your business. Eg. A new Landcruiser vs a new hayshed. Cruiser may look good but the hay shed has the ability to value add hay as well as building business resilience (drought reserves for stock). Five years on hayshed is still worth the same (or more), has given you the ability to make money five times and provided drought security. The Landcruiser depreciated by 50% but you feel cool!
Note: Simply these are just my opinions and by no means hold all the answers.
Scott Nicholson – 2018 Nuffield Scholar supported by AWI. Read his profile below
Scott Nicholson from Stawell, Victoria, receives a Scholarship supported by Australian Wool Innovation (AWI).
For his study topic, Scott will research ways technology can help modernise and improve profitability in the sheep and wool industry.
Scott said an increase in global demand for Australian food and fibre, and greater community scrutiny, will drive the need for new technology to help improve the management of livestock in breeding and handling.
Scott operates Bretton Estate, 2900 hectares of owned and leased land with a mixed farming system that includes 4500 merino ewes for wool and lamb, broadacre dryland cropping, hay production and a lamb finishing system. Scott is also a partner in Sohnic Merinos at Marnoo, which is focused on breeding merinos to optimise overall profitability.
He believes technology such as the adoption of mandatory electronic identification (EID) tags in Victoria has great potential to boost the industry through its improved traceability of individual sheep.
Scott said the industry can expand on this and will focus on researching technology in DNA and genomics; EID for performance recording and feedback; farm management software; handling and drafting equipment; drones and robotics; virtual fencing and remote sensors.
“With the continuing need to expand operations to keep pace with the constant cost price squeeze, sheep enterprises will need to get larger and much more efficient. Technology is everywhere, it’s just a matter of sorting out the developments that can be of real benefit to the industry,” he said.
Scott will travel to sheep producing countries to see the technology used in New Zealand, and North and South America.
Email: scott_nicholson@icloud.com
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