Sample Consulting Contract Draft To Illustrate The Consulting Services Provided by The Platinum System
I appreciate your contacting me about my consulting services to ranchers. My proposed consulting services to you center around conducting a detailed Cost & Return Analysis of your beef cow herd producing 2005 calves.
I am writing this letter to outline my proposed consulting services over the next year that I believe will best meet your business goals. My proposal suggests five steps:
1. Conduct a Cost & Return Analysis of your cow herd producing 2005 Calves (Mar05-Feb06).
2. Benchmark your herd’s production and economic performance against my IRM Benchmark herds always looking for bottlenecks to profit (Nov 05).
3. Project your herd’s economic performance 1 to 5 years into the future based on your ranch’s costs structure and my 5-year planning prices (Feb06).
4. Analyze calf marketing options for your 2005 calves (Oct05).
5. Present my quarterly price projections and review the marketing implications for your beef cow herd and feedlot ( Mar05, Jun05, Sep05,and Dec05).Conducting the Cost & Return Analysis For Producing 2004 Calves
I am proposing that we conduct an in-depth analysis of the economic profitability and cash flow of your beef cow herd producing 2005 calves. We will utilize your 2004 calving records, ongoing accounting records, 2004 and 2005 calving book and other production and accounting records as available. We will always be looking for bottleneck(s) to profitability as we attempt to answer three questions:
1. What did your family earn from running the beef cow herd in 2005?
2. What will it cost you to produce a hundredweight of calf in 2005?
3. How does your costs & returns compare to other beef cow producers?
The goal of this Cost & Return Business Analysis is to identify a business plan that will maximize profits and net cash flow for you over the next five years in the ranch business. I have a CD video on "How to Profit From The Cattle Cycle" and I will leave a free copy with you during my first visit. I have a follow-up second cattle cycle CD that I will leave with you free of charge when I make my 2nd ranch visit.
We will use this 2005 Cost & Return Analysis to project the ranch’s economic and cash flow performance over the next five years. We will then be able to look at some production and financial alternatives and compare them to your existing production system. Again, we will always be looking for bottleneck(s) to profitability.
In order to do this Cost & Return Analysis, we will take an in-depth look at the production performance of your beef cow herd. I promise that I will stimulate your thinking about the production, economic and financial performance of your beef cow herd.The Proposed Steps For Conducting A Cost & Return Analysis Of Your Herd
1. Conduct an initial visit to your ranch to gain an understanding of your family and business goals for the ranch. I propose to make this visit in last March or early April, 2005. During that visit, I will gather as many facts and figures as I can about your beef cow herd.
2. Return to my hotel and process your cost and return data through my IRM-Financial And Reproductive Management System (IRM-FARMS). I will prepare a rough, first draft of a Cost & Return Analysis of your beef cow herd. It typically takes me a couple of days of secluded work to generate this first rough draft report.
3. Return to your ranch and review my draft analysis with you. I will leave two copies of the draft analysis with you – one for your files and one to annotate and return to me later.
4. I will ask you to read and study the report so that you will start to become familiar with a Cost & Return Analysis of your ranch. and I will ask you to flag any numbers that do not look logical or that you question on to the one copy. I will ask you to mail me that annotated copy.
5. I will take the annotated copy and re-run the analysis into a second projected analysis that I will mail to you. We will discuss this report over the phone.
6. During the summer and early fall we will continue to update the analysis as actual numbers become available . As the year progresses, I will fill in the projected input data with actual data.
7. After the Fall 2004 weaning, I will prepare a final Cost & Return Analysis.
8. I will bring the 3nd report to your ranch during my second contractual ranch visit soon after weaning (October/Nov 05). We will spend the day at your ranch going over the report and its production and economic implications for your ranch business.
9. We will develop a 2006 management program designed to remove one or more bottlenecks to profitability as a means of increasing profits from your 2006 calves.
10. We will identify some alternative production, economic, financial, and marketing directions for your ranch.Post-Weaning Marketing Evaluation
Given the current volatile cattle market and the high risk in feeding cattle, it is imperative that you take a detailed look at your calf marketing alternatives. I will work with you in preparing an economic analysis of your 2005 calf marketing alternatives. Marketing alternative budgets will be generated and shared evaluating alternative marketing decisions (Sep05).
Quarterly Price Projections With Suggested Production/Marketing Implications
As a special introduction to my Market Advisory Service, I will share my quarterly beef market price projections and the suggested production/marketing implications for marketing 2005 calves through several different marketing alternatives. This evaluation of alternative production/marketing alternatives will stimulate your thinking about your herd’s production program. The most common question that I am being asked is "Should I move to summer calving?"Fee Structure
My consulting fees are $1500 and I pay my travel expenses for two visits to your ranch during the consulting year. This contract will begin immediately upon payment of the consulting fees and is for the consulting year (Mar 2005 through Feb 2006).
I encourage my clients to analyze three years of Cost & Return data to identify trends in the ranch business. Therefore, I will recommend that we also prepare a Cost & Return Analysis on the production of your 2006 and 2007 calves. A new contract, however, will be negotiated for each consulting year.
I am looking forward to your approval of this consulting plan and working with you!
Western Edge Consulting
30 Ramble A RoadLaramie, Wy 82070
Phone: Cell: 701-238-9607
Email: email@example.com (Email preferred)
IRM Cost & Return Analysis For Your Beef Cow Herd -- A Description Of My Consulting Services
I have three IRM Cost & Return Systems that I offer to ranchers.
First, I offer the Gold System
that is an introductory system designed to calculate the economic profits generated by the beef cow herd as well as the unit cost of producing a hundredweight of calf. I include a publication, with worksheets, for doing the analysis manually.
I also include a simple worksheet for you to complete and return to me that I use to generate a computerized IRM Cost & Return Analysis of your beef cow herd. I return the computer generated report with the actual spreadsheet used to generate the report. You can take that spreadsheet and ask "what if" questions and you can use that spreadsheet to do your own analyses of years down the road.
I charge $99 dollars (2007 special offer) for this Gold IRM Cost & Return Analysis.
The second IRM Cost & Return Analyses that I offer to ranchers is called the Silver System
where I use a computer video to talk ranchers through the complete input form. The CD auto loads into your computer and guides the rancher through each input number needed. You then send me the completed hand written input form.
I take this input form and generate a comprehensive Cost & Return Analysis of your beef cow herd.
I then send a 2nd CD and the written report back to you. This 2nd computer CD explains the output report in detail. What is unique about the Silver System is that your herd is benchmarked against all the other herds that I have analyzed.
Benchmarking helps you identify your herd's production and business strengths and your herd's production and business weaknesses. The reason that benchmarking adds to profits is that if you capitalize on your herd's strengths and remove your herd's weaknesses, profits tend to go up.
I charge $199 for this Silver IRM Cost & Return Analysis.
The third IRM Cost & Return Analysis that I offer to ranchers is the Platinum System
where I come to your ranch, collect the data for an IRM Cost & Return Analysis of your herd, process the data back it in my office, and then I bring a copy of the report back to the ranch in a second visit.
During this second ranch visit we discuss the management implications of that year's Cost & Return Analysis always looking for bottlenecks to profit.
I also consult with the rancher over the year on how he can remove these bottlenecks to profit and how he can use this report to implement profit enhancing management actions om that ranch. I also provide quarterly price projections and the management implications of these price projections as part of the Platinum System.
I charge $1500 for this Platinum IRM Beef Cow Herd Cost & Return Analysis,weekly email Market Advisers, and year-long consulting. I pay the travel expenses for two ranch visits.
I look forward to working with you on analyzing your beef cow herd.