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Veteran Advisor

Surviving $0 Profit

Here is an article about how to deal with $0 profit.

 

https://www.agriculture.com/farm-management/finances-accounting/how-to-survive-0-profit?did=314490-2...

 

I think there are some good ideas in the article depending on your specific circumstances.

 

  1. Utilize your big trucks for local hauling. 
  2. Hire out your excavation equipment for grading, drainage work, or septic systems. 
  3. Use your shop for repairing skid steers, county mowing tractors, or other heavy equipment. 
  4. Use your welding skills and equipment to repair trailers, metal fences, storages containers, or whatever else you think you can tackle.

My immediate impression on all the above is what about insurance costs and any extra licenses?  Add in liability and training.  It sounds great and for some it will be great, but I'd think one might want to enter with one's eyes wide open.

 

What do you think?

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6 Replies
Honored Advisor

Re: Surviving $0 Profit

One place there could be a lot of savings for some is going "backwards" from semis to gravity wagons.   That isn`t for everyone, but I see 300 acre farmers using a semi to haul 5 miles to town, you figure license and up keep on a truck to make a 10 mile round trip, that`s some high priced hauling.  Some have 2 700bu gravity wagons and haul up to 1400bu at a crack, they make use of their tractor and if you`re sitting in line at the coop, I`d rather sit with 1400 bushel than 950 on a truck.   But if you go to a E-plant 30 miles away of a beanmeal plant 40 miles away, it`s a different set of economics, but you better be getting enough premium for your expense.

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Veteran Advisor

Re: Surviving $0 Profit

Fella's  -  Take  the  sE:ARs  accounting  procedure - million$  of  bonus  $$$$ for executives   ,   needed  to  continue  operations says  a  court  room  official  - Smiley Frustrated

 

Interesting  read  in  these  times  of  reported,   LOW  INFLATION  -   -   -

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Honored Advisor

Re: Surviving $0 Profit

Equity burning works when you`re employed by a business and you are throwing 2 bundles of other people`s money in the fireplace and putting one in your own pocket.  But most farms, it`s your money and the sweat of many generations that`s going in the fireplace.

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Veteran Advisor

Re: Surviving $0 Profit

$ear$   fine  example  of  top  end,  over  paid  EXPERTS  hiding  behind  the skirt  of  corporate  mentality  -  maybe - just  wondering ? 

 

 

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Honored Advisor

Re: Surviving $0 Profit

Sears business model kept them on top from 1900-1990, cause this internet thingy wasn`t just passing fad.   It`s a good 15 years too late for them to do anything, but drink the sinking ship`s finest bubbly and eat caviar as the it heads down to Davy Jones locker.   In 1995 if they had foresight and took some calculated risks, they might be competing with Amazon.

 

Right now if you have a Sears type store, you can`t afford good inventory to get people in the store and when they do come in, customers take pictures with their phone to see how much cheaper they can get it the next day from Amazon.  I thought Shopko was doing good, but I hear they`re going broke too.  Target is going after the hipster generation, which seems to kind of work with rural hipsters..a little bit.   Kohls you take up to the register $500 in regular priced clothes and 80% off $50 off $100 and 20% off all that and yada yada and it ends up costing 20 bucks.  So how they`ll make it I don`t know.  But must be enough grandmas buying stuff at regular price that keeps their lights on.

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Highlighted
Senior Contributor

Re: Surviving $0 Profit

BA, there is a safety component involved also. Tractors and wagons on blacktop roads with most of the vehicles traveling at 60 plus mph is not a safe situation. Especially a tractor with two hitched wagons of that size...pretty hard to control if a situation develops.