I have a very good friend who has farmed for his entire life. He and I were having coffee one day and we started talking about the economics of farming – something that I have never quite understood and probably never will. We continued talking about business, the economy and how we are all faring during this economic downturn.
Ted is now in his mid 80’s and still actively farming. He has length of years on his side and wisdom that has naturally evolved as he lived through some very historic times. While we were talking, he told me something that I will never forget….it went something like this: “you know, Kurt, it’s not the bad years that get us into trouble, it’s the good years”. You can imagine the look on my face as I glanced back at him. He went on to say: “it’s true, we all spend more when things are going well, and that is especially true in farming and in business – to be quite honest, I have typically had more money at the end of some of the toughest economic years”
When you step back and really let those words sink in it is amazing how true they really are. We all tend to take our current lifestyle for granted. We get comfortable, we come to expect certain things, and we assume that our current sales, cash flows and expenses will stay the same. The one thing that I can tell you all for certain is that change is inevitable and that we should never pretend that things will stay the same.
Take Ted’s advice….he’s a great farmer, and an even better businessman. We all have expenses to cut…I am certain of that….just think, if you can cut your expenses now, and if you can stay disciplined and keep those expenses low as the economy and your business start to grow….you will have a win-win situation! It appears that we are now finding our way out of this recession and as time goes on, if you continue to keep a close tab on your expenses, your bottom line will begin to grow.
Kurt Thompson is a Program Officer at the Southwest Initiative Foundation where he leads the Microloan and Entrepreneurship Programs. He also serves as business coach and mentor to small businesses by offering one-on-one technical assistance to loan clients.