Shay Foulk: Shedding New “Light” on ROI for Your Farm – The Packer
If you have ordered a new tractor in the past few months and are currently waiting 12 to 18 months for delivery, you are not alone. In a time of such drastic supply chain issues and snafus, you probably made a good purchase decision, as several manufacturers have had multiple price increases over the past 18 months in response to inflation.
While you’re waiting on delivery or thinking about your current equipment fleet and business decision-making processes, consider how you plan to use the tools available to you, and direct this to return on your investment.
FLIP THE SWITCH
On some new tractors, the light package for LED lights is upward of $30,000. That is $30,000 just to turn on the lights.
It begs the question: Are you turning on the lights for your machines? My business partner and mentor, Chris Barron, pointed out many operations will only run for a few hours at night or early morning.
Fall harvest conditions can be a driver for this due to moisture as dew or frost, but oftentimes planting operations don’t necessarily face the same restrictions.
Ideal planting windows seem to be shorter and shorter each year. Many operations we work with run shifts and planting crews 24 hours a day until the crop is in the ground.
For some, the planter tractors are never actually shut off for days or weeks at a time. They are also highly efficient when refueling and refilling. So they are surely harvesting the most value out of their expensive light package.
There are also ancillary benefits and ROI in your operation. Using the lights as an example, what value is there in identifying a field obstruction before you hit it with a planter or a combine?
Or, how much value do you place on reduced operator fatigue, even if you’re only running for a few hours in the dark? The same points can be made for guidance system and devices.
TIME = INVESTMENT
A North Dakota operation we work with is implementing a transition, and they were worried about time management in coaching the next generation of farm business managers. They thought it was difficult to take time away from the farm workday for coaching when they needed to be in an employee management role to keep shop work and site management rolling.
I asked them how much their labor costs are per hour — around $100. When they told me, I then asked what they would pay per hour to ensure the business was successful in the next five years and for the next generation to carry on the legacy and provide for the family for decades to come?
They hadn’t thought of the process in that light before. It is probably a lot more than $100 per hour.
This was their moment of “turning on the lights.” Their thought was, “Well, nothing will get done if we’re not around!” Most of the time, this is not true.
An hour or two away during the workday can be occupied with small tasks for employees to manage, even if it doesn’t appear to be the most pressing operational need.
This coaching and mentoring time is crucial and provides maximum ROI for long-term business success and transition planning.
REFLECT AND IDENTIFY
What area of your business do you need to turn on the lights? For some, it might be financial management. Many operations need …….
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