Plugging the Leaks

John Ellsworth Success Strategies

John Ellsworth Success Strategies

Last time, I talked about knowing your costs of milk production on a per cwt basis. While some may be thinking that knowing this number is great fodder for your local coffee shop conversations, there is truly a lot more benefit to knowing this number. You’ve heard me talk about this before, but If you know your true cost per cwt, you will be positioned to complete a number of tasks:

  1. You can diagnose your expenses to the point that you start cash flowing better. You just want to be certain that you never go so far as to hurt your herd’s production or reproductive performance, both of which are closely related.
  2. You can also spend some time thinking about new, and to this point, undiscovered revenue sources. You might be surprised by how many new ones you can find if you actually take the time to sit down with your team, separate yourselves from all the craziness of your daily routines, and get totally focused on this task. Several times per year, I get away from our daily operations just to think about various aspects of our business – what we should consider adding, what tasks we might want to stop doing, and opportunities to which we should be saying “yes,” as well as ones to which we should be saying, “no.”
  3. This process can also lead you to think about what your long-term financing needs might be. This is a good thing! If you need to expand your operation or make changes on the cost side of your business to boost efficiencies, what will these changes require in terms of money? Can we pay for them from cash flow or do we need to finance them? If so, who are likely sources of financing?

All of this process revolves around changes in the revenue or expense aspects of your business. It’s a lot like trying to fill a bucket with water when it has some holes in it. You’ve either got to boost the rate of water inflows (new revenue) or minimize the water outflows (expense reductions). It’s not rocket science, but it does require some serious consideration.

Of course, if you are not sure how to get started, get some help or go check out the financial tools on our website at



If you would like to learn more about similar topics and the tactics our dairy producer clients have used to improve their outcomes, as well as what applications of these lessons you can make in your business, please join us for our next set of quarterly Success Strategies Mastermind Groups that start in July 2019. They are designed to teach the Finance & Strategy Concepts that I offer my 1-on-1 Clients. Signups have already begun. These sessions will give you the opportunity to learn these same concepts and meet with other producers who have overcome some of the same challenges you may be facing. Check them out at:

If you have any questions, please e-mail me at [email protected]. I’m always open for a follow-up call and, as always, wish you the best of success!


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