“The good times will come again,” says Vincent Amanor-Boadu, an agribusiness professor at Kansas State University, in speaking about today’s current economic downturn.
Boadu blames the tough economy on cheap credit, unearned prosperity and unrestrained greed on Wall Street. He says, “Overconsumption and no savings has led to this.”
Despite, the negatives, Boadu points out that it was worse in the 1980’s when interest rates were nearly 20%. Today, interest has remained at a relatively cheap 3.25% average, which Boadu says people need to keep in mind.
Boadu says business owners should use this “tough time” to do some personal inventory. He offers these six strategies:
1. First Things First. Take stock of the business and your situation. Ask yourself: Have existing customer’s needs changed? Have new customers emerged? Are there opportunities for new products and services? Are there opportunities for new production technologies?
Boadu suggests, “Define a new business vision to fit the emerging situation.”
2. Get Closer to Customers. “All business is relationships,” says Boadu. “When times are tough, everyone needs someone who understands,” he adds.
By recognizing this, find ways to connect with your customers. Listen to them and work with them to find solutions, Boadu says.
3. Recognize Noise. There is a lot of noise about the economy today, says Boadu, but he stresses that it is important to decipher the difference between noise and valuable information.
“Information allows for better decision making,” he says. For solid information he suggests listening less to the media rhetoric and talking to your business advisors and clients, as well as analyzing your own records. Then make decisions from that information.
4. Avoid Myths. Boadu says it is common for myths to become perceived reality. But in tough economic times, it becomes important to question everything. “Challenge the myths passionately because they prevent us from the ability to succeed,” he says.
5. Plan and Commit to Growth. “Plan for the future,” says Boadu. “Growth is good and not growing is actually falling behind,” he adds.
His advice is to define growth in tangible terms – not by acres or number of head, but by profits because that forces us to focus on efficiency and effectiveness.”
6. Build and Nurture Strategic Alliances. “Being able to identify business partners who can help achieve your vision is a very important skill,” says Boadu.
As an example, he suggests collaborating with neighbors to purchase inputs and services in bulk. “This helps secure price discounts and save on delivery,” Boadu says. “You don’t want your neighbor to go out of business so you can buy his operation and increase your costs, you want to find ways to work together,” he suggests.
Boadu says the bottom line is to find opportunity. That may be in collaborative marketing arrangements or he suggests looking for opportunities within the whole supply chain and even by looking outside your industry. “It’s a matter of finding win-win outcomes,” he concludes.