1.13 - Overall business management system
The most important driver of business profitability is livestock productivity (namely growth rates of meat, reproductive performance and mortality rates); the most important driver of livestock productivity is nutrition; and in a pastoral situation, the greatest driver of nutrition is the balance between carrying capacity and stocking rates.
By instigating a system that provides information that is relevant to all aspects of the business, monitoring becomes an integral part of management activities, not a chore that needs to be carried out to satisfy regulatory demands.
Components of the overall business management system
- Decide which part of the physical property is to be monitored. Most participants have started with monitoring an area where breeders are grazed
- Determine what the goals are for this area:
- natural resource goals eg aiming to increase ground cover, pasture species, reduction in soil loss and water movement, food on offer at various times of the year etc.
- livestock productivity goals eg BCS profile across the year, reproduction rates, growth rates, mortality rates
- business goals eg gross margins, return on capital for the whole business
- Determine the management strategies which will be put in place to work towards achieving these goals
- The goals and strategies then determine what needs to be monitored during the year, how often monitoring needs to be conducted.
Generally, monitoring of land and livestock is conducted at the critical points in the production calendar - oining, lambing or calving, weaning and the end of the growing season. Rainfall and stocking rate is monitored on a monthly basis, and the overall business monitoring (gross margins and return on capital) is conducted on an annual basis.
- At the start of the year, goals and strategies for the management unit are discussed and recorded.
- These goals and strategies determine what has to be monitored and how often the monitoring needs to be done. A monitoring schedule is drawn up.
- During the year, monitoring is done and an economic analysis of the business is completed.
- All the information is collated and displayed.
- The results are then discussed and analysed - were the goals achieved, if not why not, what corrective action is required, do strategies need to change, what goals are we setting for the next year, etc.