The economic crisis has dominated the news recently and despite all the expert testimony it is clear that no one really knows how long this downturn will last or how bad things will get before the situation turns around. Many small farms and micro-businesses are wondering if they can survive the wild ride. While there is no guaranteed recipe for survival, there are several strategies that have proven useful during previous periods of economic uncertainty.
Keep your employees in the loop
Turbulent times can sometimes cause us to withhold bad news in order to protect others. That instinct is absolutely wrong. During periods of uncertainty it is critical that you be even more transparent in your communications. Start with your employees. Tell them the truth about how the business is doing and what your benchmarks are going to be for decision-making. You do not want to be in the position of having your key employees panic and start looking for new positions just when you need their creativity and skills the most.
Re-double your efforts at record-keeping
If your record-keeping habits are a bit sloppy now is the time to rectify that and bring all your records up-to-date. If you are a meticulous record-keeper then keep up the habit. Having a clear sense of how your costs are changing relative to your sales is a key factor in making high-quality management decisions. Take the time to run some sensitivity analyses on your business to predict how your business will fare in a variety of scenarios. It may seem like a doom and gloom exercise but knowing where you will be most vulnerable in a variety of situations will help relieve the stress of feeling like you have no control.
Communicate with your creditors
If you are having cash flow problems let your lenders know before you start missing payments. Despite all the news about unscrupulous bankers, most lenders are caring, decent people that want to help you succeed. Ask for help and be prepared to take action. You may also want to visit with your attorney, your insurance agent, accountant and any other consultants that you have on your management team.
Thank your customers for their loyalty
Don’t underestimate the power of appreciation. Let your customers know that you appreciate their continued support. If a customer has to reduce an order or change their purchasing habits let them know that you understand. On the other hand, if customers are falling behind in their payments contact them right away and request a written payment plan to get them current. Unless you can afford to finance their debt, be empathetic but firm.
Take care of yourself
When things are not going well many business owners have a tendency to work harder. Working more hours combined with increasing stress levels is a recipe for health problems. Force yourself to stick to your normal routines—eat properly, get plenty of rest, exercise regularly and spend time with family and friends. All of these activities will help you keep business problems in perspective and keep you from obsessing over things you cannot control.
Reach out to others
Networking is important during good times. In bad times it becomes a necessity. Share tips and strategies with other business owners on what is working for you and where you need help. Surviving a global economic crisis will be a challenge for business owners regardless of their size and industry. Fortunately most small-scale farmers have skills and creativity that will serve them well – even without a bailout program.