Planning ahead is the best defense against a crisis.

The best time to formulate a crisis management plan is before the financial roof falls in. The second best time is when the crisis hits. Many ranchers, however, choose a third option - they put off doing anything until they face foreclosure.

Regardless of where you fall, the rules for crisis management are pretty much the same. They work better when applied early. But whether you start early or late, they probably work better than doing nothing.

Where should you start? Take a few deep breaths, then sit down at the kitchen table and set priorities for dealing with what may seem like insurmountable problems. Then deal with them one at a time.

Careful planning and attention to financial and potential tax issues can minimize costs and the risk of going out of business if times turn bad.

One of the best starting points is a candid talk with your banker.

"I'd certainly have a cozy relationship with my lender," says Harlan Ritchie, professor of animal science at Michigan State University. "Those communication lines have to be open. There's a tendency to put bad news off until it's a bit late."

Nonetheless, when some ranchers find themselves unable to pay their loans, they duck their creditors. Talk honestly with your lenders, they may give you a break, Ritchie says.

"Lenders don't want to get into owning land or property," says Ritchie. "I think they're willing to renegotiate. They are more aware of the long-term outlook for agricultural commodities than they were in the '80s crisis. They understand price cycles."

Before you talk to your banker, however, you should get a firm grasp of your finances. A careful study of your books may show you where you went wrong and point the way to a more profitable future. There is a side benefit of this: Your banker may be more likely to help you if you understand why you got into trouble and have a plan for reversing your fortunes.

Most importantly, the lessons offered by a careful study of your books can help to avoid a repetition of mistakes that caused financial chaos in the first place.

"The definition of insanity is doing things the same way and expecting a different result," says Tull Bailey, assistant director of the ranch management program at Texas Christian University.

"If I know my breakeven costs on calves is 80 and I'm staring at 60 calves, then I need to do things to lower the breakeven point," says Bailey. "Or, I need to do something different, like taking in stocker cattle or raising replacement heifers."

As you study the books, look for immediate ways to cut costs or avert big expenses.

"See if you can make the pickup last another year," says Bailey. "You might spend more on maintenance, but you forego the big outlays."

Wyoming rancher Tony Malmberg survived the land and beef price collapse of the 1980s with a pocketful of hard-won lessons. One such lesson was a better understanding of the cycles that govern virtually every phase of the cattle business.

If Malmberg had understood cycles then, he would not have bought his 33,000-acre spread in 1978 as land prices rose to record levels, he says. And he would have sold mother cows in 1979 when prices were high and used the proceeds to cut debt.

Today, Malmberg still loves the rancher's lifestyle, but he recognizes he must operate as a modern businessman to keep it. That requires regular study of the financial forces that impact ranching and mastery of the latest findings on nutrition and range management.

If you plan to survive a financial crisis by slashing costs to lower the breakeven point, be cautious. If you make the wrong cuts, it will do more harm than good.

When crisis hits, "most folks either keep operating as they have been or they cut costs in the wrong places," says Bailey.

For example, in Eastern states, some ranchers operate on improved pastures that require regular fertilization to remain productive. "I've seen folks say, `I've got to cut fertilizer,' " says Bailey.

But, the lack of fertilizer can cut forage production by 75%, and that means lower weight calves. "The only thing you have to sell is beef," says Bailey. "If you diminish forage, you reduce your ability to produce beef. You don't save as much as you lose."

Finally, as you sort out your finances, pay attention to the emotional toll extracted by hard times. Low prices translate directly into stress, illness and the breakdown of families.

If you need help, get it. Counseling is available from a variety of government or non-profit agencies and church groups. Friends are often willing to lend emotional and moral support.