The Power of Paradigms

Summary

The script emphasizes the importance of challenging traditional ranching paradigms to achieve profitability. It defines profit as the surplus after covering all costs, including market rent, labor wages, and asset interest. Many ranchers view ranching for profit as an impossibility, but the speaker argues that changing this mindset is crucial for success. Paradigms guide our thinking and actions, and having the right one can lead to better decision-making and a more profitable business. The script encourages ranchers to adopt a proactive approach to market risks and weather management, suggesting that a shift in perspective can pave the way for stronger businesses and happier lives.

Takeaways

• 💰 Profit in ranching is defined as the surplus after covering all costs including wages, rent, interest on assets, and production costs.
• 🌐 Many ranchers are skeptical about making an economic profit from ranching, viewing it as an unattainable goal or an oxymoron.
• 🔄 The belief in the profitability of ranching is a prerequisite to achieving it; mindset is crucial for success in any business.
• 🧠 Paradigms are subconscious rules that guide our thinking in various aspects of life, including business and ranching.
• 💡 The power of paradigms should not be underestimated; they can either empower or limit one's ability to succeed.
• 🛒 Believing in the ability to influence market prices and manage risks can lead to more effective marketing strategies and potentially higher profitability.
• 🎯 Actions are dictated by beliefs, and changing one's paradigm is essential for taking different actions that can yield different results.
• 🌱 The paradigm shift is necessary to see things differently and to act differently, which is vital for achieving success in ranching.
• ⛔ Complaining about uncontrollable factors like weather is unproductive; instead, focus on what can be controlled to build stronger businesses.
• 🛠️ There are many strategies to prepare for and manage through extreme weather events, which can be part of a successful ranching paradigm.
• 🏫 The primary purpose of education in ranching is to change the way people perceive their ranches and challenge their existing paradigms.
• 🔑 Having a different paradigm can lead to better decision-making, a sense of control, and ultimately, a more successful and fulfilling ranching experience.

Q & A

What is the definition of profit in the context of ranching for profit?

Profit in the context of ranching refers to the amount left over after covering all expenses including market rate rent for the land, competitive wages for labor, interest on assets, and all other production costs.

Why do many ranchers believe that ranching for profit is not possible?

Many ranchers believe that ranching for profit is not possible because they hold the paradigm that ranching isn't profitable, which influences their actions and results.

What is a paradigm and how does it influence a rancher's business?

A paradigm is a set of subconscious rules that guide a person's thinking. In ranching, the paradigm can influence a rancher's approach to business, affecting their actions and ultimately their profitability.

How can a rancher's belief about the market impact their marketing program and profitability?

A rancher who believes there are many ways to market livestock and manage market risk is likely to have a better marketing program and be more profitable than someone who sees themselves as a price taker at the mercy of the market.

What is the relationship between a rancher's beliefs and their actions?

A rancher's beliefs dictate their actions. If they believe in the possibility of profitability and take steps to achieve it, their actions will be more likely to result in a profitable ranch.

What is the significance of changing one's paradigm in the context of ranching?

Changing one's paradigm is crucial because it allows a rancher to see things differently, which can lead to taking different actions that can improve the profitability and success of their ranch.

Why did Stan Parsons, the founder of RMC, emphasize changing the way people see their ranches?

Stan Parsons believed that changing the way people think about their ranches and challenging their paradigms was the primary purpose of the school, as it can lead to better decision-making and ultimately more successful ranching businesses.

What is the role of belief in building stronger businesses and supporting happier, healthier lives for ranchers?

Belief plays a significant role as it can motivate ranchers to take actions that build stronger businesses and support a better quality of life, provided they believe such improvements are possible.

How can a rancher prepare for and manage through extreme weather events according to the script?

The script suggests that having the right paradigm, such as believing there are many things one can do to prepare for and manage through extreme weather events, can lead to better decision-making and a greater sense of control.

What is the main takeaway from the script regarding the importance of paradigms in ranching?

The main takeaway is that paradigms are powerful and can either limit or enhance a rancher's success. Having the right paradigm is essential for profitability and overall success in ranching.

How does the script suggest a rancher can achieve different results in their business?

The script suggests that to achieve different results, a rancher needs to adopt a different paradigm, which will lead to different actions and, consequently, different outcomes.

Outlines

00:00

💰 Ranching for Profit: Paradigm Shift

This paragraph discusses the concept of profitability in ranching, emphasizing that true profit comes after covering all costs including market rent, wages, interest on assets, and production costs. It highlights the common belief among ranchers that profitability is unattainable, referring to it as an 'oxymoron'. The speaker argues that changing this belief is a prerequisite for making a ranch profitable, as paradigms shape our actions and outcomes. The importance of having the right mindset and challenging existing paradigms in ranching is stressed, as it can lead to more control, better marketing programs, and ultimately, success in the industry.

Keywords

💡Profit

Profit is the financial gain realized when the revenue generated from a business activity exceeds the costs and expenses of the business. In the context of the video, profit is the ultimate goal of ranching, but it is defined in a way that includes covering all costs, from land rent to labor wages, and even interest on assets. The script emphasizes that many ranchers do not believe in the possibility of making an economic profit from ranching, which is a key issue addressed in the video.

💡Market Rate

Market rate refers to the prevailing price or wage level in the market for goods or services. The script mentions that to be profitable, ranchers must be able to pay the market rate for land rent, which is a critical cost factor in the ranching business. It suggests that understanding and adjusting to market rates is essential for profitability.

💡Competitive Wages

Competitive wages are the wages that are comparable to or higher than what is typically offered for similar work in the labor market. The video script points out that ranchers need to pay competitive wages to attract and retain quality labor, which is a component of the cost structure that must be managed for profitability.

💡Interest on Assets

Interest on assets is the cost of borrowing money to finance the assets used in a business, such as machinery, equipment, or even livestock in the case of ranching. The script highlights that profit is not just about covering operational costs but also includes the financial cost of assets, emphasizing the importance of financial management in ranching for profit.

💡Production Costs

Production costs encompass all the expenses incurred in the process of creating goods or services. The script explains that profit is what remains after covering all production costs, which is a fundamental concept in understanding how to run a ranch as a profitable business.

💡Paradigm

A paradigm is a set of beliefs or assumptions that shape the way people perceive and interpret the world. The video discusses the concept of paradigms in the context of ranching, suggesting that the belief that ranching cannot be profitable is a self-fulfilling paradigm that prevents ranchers from taking actions that could lead to profitability.

💡Price Takers

Price takers are businesses or individuals who have no control over the prices of the goods or services they sell and must accept the market price. The script contrasts the belief that ranchers are price takers with the alternative belief that there are ways to manage market risk and influence prices, suggesting that the latter belief can lead to more profitable outcomes.

💡Market Risk

Market risk is the risk of losses that may result from fluctuations in the price of a commodity or a financial instrument. The video script mentions that ranchers who believe they can manage market risk are more likely to have a better marketing program and be more profitable, indicating the importance of proactive strategies in the face of market volatility.

💡Beliefs

Beliefs are the convictions or acceptances that guide an individual's attitudes and actions. The video emphasizes that a rancher's beliefs about the possibility of profitability and control over market conditions will dictate their actions and, ultimately, their results in the business.

💡Actions

Actions refer to the steps taken or the behaviors exhibited by individuals in response to their beliefs and perceptions. The script suggests that changing one's actions is essential for achieving different results in ranching, and this change in actions is predicated on a shift in paradigm or beliefs.

💡Ranching for Profits

Ranching for profits is the concept of running a ranching operation with the intention of making a financial profit. The video script discusses this concept as a paradigm shift that many ranchers need to embrace in order to change their approach to ranch management and achieve economic success.

💡Victimization

Victimization is the state of being a victim, often implying a sense of helplessness or lack of control over one's circumstances. The video contrasts the feeling of being at the mercy of market forces with the empowerment that comes from believing in one's ability to manage and influence outcomes, suggesting that the latter mindset is more conducive to success in ranching.

Highlights

Profit in ranching requires covering market rate rent, competitive wages, interest on assets, and production costs, with what's left being profit.

Many ranchers consider 'ranching for profit' an oxymoron, reflecting a belief that profitability is unattainable.

The belief in the impossibility of profitable ranching is a self-fulfilling prophecy that hinders success.

Believing in the profitability of ranching is a prerequisite for making a ranch business profitable.

Paradigms are subconscious rules that guide our thinking and can significantly impact the success of a ranching business.

Having the wrong paradigm about ranching can guarantee failure, while the right one does not guarantee success but is essential.

Ranchers who believe they are at the mercy of the market have fewer options than those who believe in managing market risk.

Beliefs dictate actions, which in turn determine results; different results require different actions and paradigms.

Changing one's paradigm is crucial for doing things differently and achieving different results in ranching.

The paradigm that 'you can't do anything about the weather' is contrasted with the belief in managing through extreme weather events.

Complaining about uncontrollable factors is unproductive; focusing on building stronger businesses is more beneficial.

Teaching ranching for profit aims to change the way people perceive their ranches and challenge their paradigms.

Changing paradigms is identified as the primary purpose of the ranching school founded by Stan Parsons.

The speaker initially misunderstood the importance of challenging paradigms but later recognized its significance.

If a rancher wants different results, they must adopt a different paradigm and approach to their ranching business.

The transcript emphasizes the power of belief and paradigm shift in achieving profitability and success in ranching.

Transcripts

here's the ranching for profit

definition of profit

you've got to be able to pay market rate

rent for the land

competitive wages for the labor even

family labor

you've got to be able to pay interest on

all of the assets used in production

even the cows

and then you've got to be able to cover

all the other production costs

and after doing that there has to be

something left over

whatever's left is profit given that

definition there aren't very many

ranches that make an economic profit

in fact a lot of ranchers don't even

believe it's possible i can't tell you

how many ranchers tell me

ranching for profit is an oxymoron and

they're right

at least as long as they cling to the

ranching isn't profitable paradigm

they're right

as long as they believe that ranching

isn't profitable their ranch won't be

profitable

now of course just believing that

ranching can be profitable isn't enough

but it is prerequisite to doing the

things that it takes to make a ranch

business profitable

paradigms are subconscious rules that we

establish to guide our thinking

we have political paradigms religious

paradigms social paradigms

and we certainly have a lot of paradigms

about ranching

most people underestimate the power of

the paradigms they hold

having the right paradigm does not

guarantee success but having the wrong

one

that guarantees failure consider this

who has more options someone who

believes that ranchers are price takers

and at the mercy of the market

or someone who believes there are lots

of ways to market livestock and we can

do lots of things to manage market risk

who do you think might have a better

marketing program who do you think is

likely to be more profitable

who do you think feels less like a

victim and more in control

your beliefs will dictate your actions

and your actions determine your results

so if you want different results you

need to take different actions you need

to do things differently

but you will not do things differently

and in fact you cannot do things

differently

until you see things differently until

your paradigm changes

compare these paradigms you can't do

anything about the weather

or there are lots of things you can do

to prepare for and manage through

extreme weather events

which paradigm is likely to lead to

better decisions

which one would make you feel less like

a victim and more in control

which one is more likely to set you up

for success

look there's no point in complaining

about things you can't do anything about

but there are plenty of things we can do

to build stronger businesses

and support happier healthier lives at

least there are

if you believe there are

when i started teaching ranching for

profits over

35 years ago stan parsons who founded

rmc in the school

he told me that the primary purpose of

the school was to change the way people

see their ranches to change the way they

think

to challenge their paradigms

at the time i didn't get it to challenge

people's paradigms

really i thought the purpose had to be

something bigger than that

well i've come to understand that

there's nothing bigger than that

look you don't need to change and your

ranch is perfect just the way it is

it is it's perfect to give you the

results that you're currently getting

but if you want different results you

need to do things differently

and to do things differently you need a

different paradigm

you