3 Components of a Successful Ranch
Purchasing ranches for sale in Florida provides excellent opportunities for profit. Before you purchased your land, you probably evaluated its soil conditions, land boundaries, cattle carrying capacity, and water availability to determine if the land would be suitable for investment. Once you’ve made your investment you’ll most likely focus your efforts on managing your property successfully. In doing so, it’s vital to know which activities will improve profits and which will not. The following components discussed in this article will contribute to a highly successful and profitable ranch.
1. Reduced Overhead Cost
Thoroughly analyze your business and cut out all unnecessary expenses. This may include equipment, staff, taxes, and more. For instance, you can choose to lease instead of buying certain types of equipment.
2. Improved Gross Margins
Gross margin is what you have left after you pay for your products and materials. It is total dollar returns minus direct costs like interest on livestock loans, freight, and commissions. You can improve your margins by increasing prices and by planning inventory more efficiently. Properly managing gross profit margins will result in better cash flow and overall profits for your ranch.
3. Increased Turnover
Healthy gross margins, in addition to increasing turnover, will result in more profit. Some ways to increase turnover include leasing your cattle and grazing animals with different dietary needs. Adjusting the following will yield better profits:
- Acres per cow: the fewer people to cows, the better. For example, it’s better to have 1 person to 1000 cows than having 1 person to 500 cows
- Cows per person: managing grazing effectively will allow you to have more cows per acre which is much cheaper
- Fed vs. grazed feed: allowing animals to graze instead of feeding them drives down feeding costs