Planning is more important than ever

There is something about this final week of the year that just begs for planning and organizing. Maybe it is because we still have some long, cold winter ahead of us or maybe it is the start of a new year — that fresh-start, clean-slate mindset– that sets the stage for a frenzy of tidying. Or it could be that, for many of us, the end of the calendar year is also the end of the tax year and we know that it’s time to catch up on the recordkeeping and pull together the receipts, check stubs and other detritus that will tell the story of our business performance for the past year.
Closing the books on one year also means it’s time to open the books on the coming year. And the first place to start is with some serious planning. How do you plan in a period of economic chaos? How will your farm business be effected by the ongoing financial downturn?
Unfortunately there is no formula that you can apply. There are no expert answers out there but that does not mean that you should stick your head in the sand and give up trying to navigate these challenging times.
If you have been in business for any length of time then you have some valuable information that can help you build a survival plan. Here are a couple pieces of information that you should take into account as you plan for the coming year.
Who are your customers? Pull together as much information as you can about who your customers are and how they are likely to be effected by the financial downturn. For example, if your customers are mostly local and your community has had some business closures then you can reasonably expect that some of your customers will have lost, or will be losing, jobs. This will impact their buying habits.
How expendable is your product? Is your product something that people will continue to need as they trim their spending? Is it a luxury product? Do you have a mix of products at different price points? All of these answers will provide clues to how you should set your sales projections for the coming year.
What is likely to happen to the cost of your inputs? Talk to your suppliers and ask them what they are anticipating for prices in the coming year. This information is critical in your planning. You should also be talking to your suppliers about how they are planning to weather the coming year. If it sounds like they are on shaky ground it is better for you to know that ahead of time. If they are planning to discontinue some of their product lines that is also important information.
Can you downsize if necessary? If any of the information above indicates that your business is likely to be impacted negatively then is it possible that you can downsize in any area? Can you reduce your product line — giving up those items that are more costly to produce or reducing those items that don’t turn over as quickly?
Are there areas that you should expand? Should you look for new customers or save the marketing money and focus on what you currently have?
All of these questions are areas that you should consider in your planning for the coming year. The one thing that you can be sure of is that this year will likely not be business as usual.