Fully absorbed means that all expenses (input costs, variable expenses and fixed costs) are taking into account including income taxes, living expenses and term principal payments.

We often encourage family business members to identify their “guiding principles” — the key elements of their philosophy and business strategy that create the culture of the organization. A few to consider are below, and I've offered an alternative perspective for each one to help push your thinking.

Generally, we’ve seen similar improvements in feed efficiencies among the three main types of cattle barns — deep bedded, deep pit and hoop buildings.

There are 2 simple ways to do this. One is to develop a long-term lease for added security. One issue with a long-term lease, though, is that lease terms and rents tend to fluctuate much more frequently in today’s agricultural environment. It could be disadvantageous for a producer or a landlord to be locked into specific terms for many years. 

The sustainable debt load of a business depends upon its earnings. EBITDA — Earnings Before Interest, Taxes, Depreciation and Amortization — which is calculated as Operating Revenue minus Operating Expenses. EBITDA represents the money available to spend on family living, interest and debt service. When EBITDA is larger than the amount used for those items, the residual is used to “grow” equity, which could be cash in the bank or funds to purchase other assets.