Client Story · Family Dairy · Accounting

A $600K Swing In One Year

A century-old family dairy past a million dollars in direct sales, and losing about three hundred thousand a year.

“You can have a tremendous mission and vision, but if you’re not financially stable and don’t have cash to work with, you can’t move your mission. Your mission is dead in the water if it isn’t a profitable mission.”

– Edwin Shank, fourth-generation farmer

−$300K

annual loss when the work started

+$300K

profit one year later

4 generations

on the same ground, a century of it

$1M+

in direct sales, before the books were fixed

Eleven cents a pint, and no control over it

As a conventional farm, The Family Cow's profitability sat in the hands of a volatile commodity market. Some months they earned eleven cents a pint. Edwin Shank, a fourth-generation farmer, decided the farm's fate needed to be in the family's own hands.

In the early 2000s he led the switch to organic grass-fed Jersey cows and direct sales. The family took ownership of the whole chain: raising the animals, production, packaging, distribution and marketing. What started as milk became cheese, butter, cream, grass-fed beef, pastured chicken, turkey and pork, all to organic standards.

“What drives us along is the health of the earth and respect for the animals. But also the health of the communities. There’s so much more camaraderie when we’re working together to provide food for our neighbors.”

Edwin Shank

Direct sales worked. Revenue passed a million dollars. And the finances were still a mess.

A friend looked at the books and told them the truth

The Shanks were seasoned farmers who did not have the bookkeeping to keep a business of that size healthy. A customer and friend, John Rhoads, offered to look through their financial records.

“It didn’t take him long to realize that we were going to commit financial suicide because we didn’t know what we were doing.”

Edwin Shank

John introduced the family to Ted LeBow. Ted's first move was a complete reorganization of the chart of accounts, so the Shanks could track and manage the numbers with some precision. He also worked on their deteriorated relationship with their bank, connecting them to one that offered better rates and actually understood how a diversified farm operates.

One set of books was hiding the answer

The Family Cow was running several enterprises as a single business. Ted split them into separate companies with subclasses underneath, so each one could be read on its own.

The result is the reason we now start almost every farm engagement here. Looking at combined profits, the business looked healthy. Split apart, all the profit was coming from one enterprise while another was quietly losing money. Nothing about the operation changed in that moment. Only what they could see.

The hardest part was paying for help while broke

The farm was losing around $300,000 a year when the work began. A year in, it turned a $300,000 profit. But the real obstacle at the start was not analysis, it was deciding to spend money they did not feel they had.

“It was a mental challenge to bite off a cost when we didn’t feel like we had two pennies to rub together. But if you have a financial mess that you’re trying to straighten out, it will pay off.”

Edwin Shank

We include that because it is the most common reason operations wait, and waiting is usually the expensive choice.

Now it is about the fifth generation

The work has since shifted from rescue to routine: quarterly reviews, annual budgeting, and benchmarking against other dairy farms. That is what is paving the way for Edwin's sons to become the fifth-generation stewards of the farm.

“Working with Ted has enabled us to scale better while maintaining stability. It’s also part of our mission and vision to help other people. Since working with Ted and gaining financial stability and success, we’re able to help more people.”

Rodrick Shank

The Family Cow still sells certified organic goods direct to customers through their farm store, local pickup locations and nationwide delivery. If the handoff is the live question for your operation, that is where we usually start.

In their words

What The Shanks Would Tell You

Both answers are about willingness rather than accounting.

“Be willing to take some steps that you may not think are necessary or don’t understand. If you’re going to engage Good Roots, be willing to listen, take action, and put your own hard work into it.”

Rodrick Shank

Working with a consultant meant getting out of their comfort zone, from new technology to simply trusting a process they could not yet see the end of.

“If you have a financial mess that you’re trying to straighten out, it will pay off.”

Edwin Shank

Said by someone who committed to the cost while losing $300,000 a year, which is the position most people are in when they call.