Winterborne Kingston, Dorset
* Cooperation not competition. That’s the secret when it comes to running a successful outfit, believes Dorset contractor Mike Simpson.
Since 2001 his business has formed half of a collaboration – Pro-Ag – that allows him and another local contractor to offer the complete range of agricultural services by splitting specialist operations down the middle.
Broadly, Mike is responsible for most livestock-based activities – silage, slurry and muck – while the partner operation, run by former Contractor of the Year judge Jim Farquharson, handles nearly all the arable operations.
There is no formal machinery or staff-sharing policy in place and generally the two businesses operate independently.
If Mike’s regular customers make a request for work such as spraying or combining, he’ll contact Jim who effectively works as a sub-contractor for that operation.
“It’s a hiccup-free arrangement that has worked incredibly well for the last six years,” Mike says.
“At the end of each month we work out the balance of work, with each business receiving a 10% commission for work it’s brought in.”
This system has proved a fair one and ensures there is plenty of incentive for both businesses’ staff to go out and find new clients.
Keeping his three-man team fully involved with the running of the business is one way Mike sees as key to maintaining a motivated workforce. “The guys are our eyes and ears on the ground.
“They deal with the customers on a face-to-face basis and build up a relationship. That often means they’re the ones bringing in new business.”
And this approach is bolstered by a range of marketing activities to let farmers know about the new services offered by Pro-Ag. Quarterly newsletters go out explaining what’s on offer, from umbilical slurry injection to direct-drilling.
In addition, Mike also organises a winter meeting or summer farm walk, where guest speakers discuss topics such as slurry use or whole-crop production.
He’s keen to be seen as an innovator and was one of the first to introduce big square balers, maize-harvesters and second-generation direct-drills in his area.
And that drive to remain at the forefront of developments continues. Last year saw the addition of a Krone MultiBale to the fleet and all implements/trailers are now equipped with flotation tyres.
A haylage enterprise is currently under consideration, as is the possibility of a further joint venture with local farmers to increase the outfit’s arable activities.
But new ventures have to pay for themselves. When it comes to charging, Mike has a very robust attitude.
Each operation is costed to include depreciation, interest charges, repairs, servicing and insurance. Each tractor and driver is costed at about £28/hour and it’s at that point he works out where the margin can be made.
“I’m very aware of hidden costs such as time lost in travel, preparation and briefings.”
“Inevitably the market will affect final pricing but, if there’s not a decent profit in a job, then it’s not worth doing.”
Mike Simpson measures his operation’s costs scrupulously to protect margins.
Above: Daniel James, 2006 Contractor of the Year Richard Minton, NAAC Chairman. Below: Peter Debenham, Kleber and Nick Fone, Farmers Weekly
|WHAT THE JUDGES LIKED|
Mike Simpson Contracting, Winterborne Kingston, Dorset
WORK UNDERTAKEN Silage – grass (2500 acres), maize (1800 acres) and wholecrop (500 acres), square baling, muck and slurry work, drilling.
MACHINERY FLEET Tractors – 2 x JD 6620, 1x 6920 and 2 x Fendt 818 Forager – Claas Jaguar 870 Loader -JCB Farm Master 414 Balers – Hesston 4900, Krone 1270 Multibale, 2 x MF 185, Welger 520
LABOUR Three full-time staff, plus up to another three part-time in busy spells