Ask the WWM Crew
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"It's not what you make, it's what you get to keep". How true when "it" comes to figuring in livestock mortality.
Among the highest costs involved in a business dealing in livestock are incidental losses. Some of these losses are to be expected, anticipated and are acceptable; especially if figured in the budget. How much do you lose, actually, day to day?
Poor placement of stock, inadequate care are you and your
staffs responsibility. Other losses are in the realm of your
suppliers'. This article details a system for 1) simply, inexpensively tracking your livestock losses. 2) requesting credit or replacement for questionable livestock losses from your suppliers and 3) some insights into other uses of this loss data.
This system should be confluent and interactive with your companies' Ordering, Treatment, In-house Profit and Loss Statements and Analysis, Weekly, Monthly, Quarterly, and Annual Manager Reports, and Cost Accounting Systems.
It is the managers responsibility to secure a permanent notebook to be used only for recording losses and credit requests. I suggest a lined paper, spiral bound type. A title, Loss/Credit Book should be attached and each page formatted as follows:
Date__________ request fresh salt
Number lost Livestock Source credit + - cost
ex. 2 red swords AWA + 2.0
1 longnose b/f MFE - 10.0
Total per day__________
Before your business opens, while losses are collected, the
losses for the day are recorded; if an organism is pulled out
during the day it is likewise written down. As much information
as possible is recorded at this time. If a treatment book is not
in use, two more columns may be added; Cause of Death, &
The livestock source, if unknown, may be looked up on that
week's invoice. Store cost we figure at one half of retail.
Though your mark-up may be more, it is reasonable to assume 1)
you have more money invested in terms of food, space, utilities,
labor, etc. than the original simple cost 2) the opportunity cost
of not having healthy livestock to sell 3) loss of use of your
funds 4) Livestock unaccounted for from jumping out, getting
eaten, being removed unrecorded.
Types of livestock may be divided into as many categories as
you think prudent; for example fresh and saltwater.
How to use this data: You may be surprised (shocked!) to
find how much money you really are losing out the back door, down
the toilet; but don't despair. This system will help reduce,
control these losses.
A) Look for patterns. Certain livestock just doesn't do well in
your holding facility; or from a certain supplier. You'll find
there is a post-arrival loss curve and seasonal losses that are
tractable and reducible.
B) Eliminate carrying lines that are unprofitable due to high
loss coefficients. It is easy to see that the difference between
what is bought, sold, lost and inventoried is the "whole
C) Request credit/replacement from your suppliers where it is warranted. Your first line of defense must be on delivery of stock. Carefully examine all containers as they are check on/off the manifest. Questionable quality, counts, should be resolved/returned right then and there.
Over the next few days, losses that are not easily explained as to source of problem, should be discussed and agreed upon in terms of credit/replacement at the time of your next order. Make sure that the next invoice has all such credits and replacements identified.
A question regarding who owns the problem can sometimes be expedited by calling some of the other distributors customers.
Having a daily record to refer to will impress your suppliers and beef-up your justification. Listen carefully to the distributor's representatives re care and display. This is their industry/livelihood too. By and large they may influence their supplier for similar consideration and make them more responsible as well.
Having been in the nature business for many years, at all levels in three countries, I cannot stress enough the importance of this type of documentation and orchestration. A livestock loss/credit replacement system is one of several important tools a business person can develop and implement to track and control their costs and profitability.
Aquatics Business > Livestock Loss/Replacement Systems 7/13/07 Hello <Hi there> My name is Ron Myers and I recently opened a Retail Aquatics business that my son essentially runs and manages. I have been out of the hobby for so long, it will take me some time before I am qualified to be in the store without him or our other employee. I essentially started this business to diversify my own income, and to give him an opportunity to manage the store and ultimately own some of it thru sweat equity. <I salute your efforts... Not an "easy" trade> I am currently trying to understand what would be considered an acceptable amount of livestock loss for a typical aquatics store that handles both saltwater and freshwater livestock. We use a Point of Sale system and all livestock losses are being tracked on a daily basis. <Mmm... good... I prefer to have more "fields", to record where the organisms came from, notes on appearance, time on hand... and to be able to sort re these variables... To "take up" losses with suppliers, mine such data for trends, anomalies... Use it to direct purchases...> Essentially I can login remotely at anytime and see what the current loss value/qty is. The store opened for business March 1, 2007 and we have since completely replaced our original saltwater system which consisted of 24 20-Gallon tanks, all plumbed together on a central system. Now we have 5 DAS retail systems that were installed late May or early June, and so far, I am glad I made the switch. <Yes... much upside compared to induced troubles> Last month our dead loss value was less than 300.00. This month however, as of today, we are already over 300.00 in loss livestock. As a result, I am beginning to worry again that I may see another month like April of 07 where our loss live stock totals were over 900.00 in one month. <Mmm... and I hasten to add there are many related issues to excessive loss... not being able to sell/use your stock equity, the use of space for non-sale-able organisms, the "bad will" that such ailing, dying, dead organisms produce to your customers...> I was hoping you might have some insight into this. Are you aware of any averages that we should be aiming for. <Am aware... but don't find that this sharing is instructive... Of course, minimizing losses is ideal... Picking out the best organisms (that live, sell...) and specimens... from the better sources IS paramount... Some loss is inevitable, economical from some points of view... but more than 5-10% can become crippling... A VERY good idea to develop and adhere to a routine of close examination of such loss data, hone your selection, with the help of your appointed staff AND suppliers... to get you a forever improving selection. This, along with appropriate acclimation, disease-limiting procedures are EXTREMELY important to a LFS success> Any insight you may offer would be tremendously helpful. Thanks Ron Myers <Much to discuss here. Please do send along specific questions. Bob Fenner>
Write offs (pet-fishing biz and the tax-man) Is it possible to write off the losses of fish that I experience in my new business? <Absolutely> I've been keeping a log of all my fish losses. In hopes of recovering my loss from the govt. Is this possible or a pipedream? <Not a pipedream. All the going businesses in the livestock field that I'm aware of charge off livestock losses... as well as electricity, rents, clothing, related travel/transportation costs... Do keep track of all expenses, and get help in detailing, doing your returns. Bob Fenner> Thanks In advance