How Ready And Resilient is Your Rural Business For The Next Downturn?
Rural is in bloody good shape right now.
Milk payout forecast is good, meat schedule prices are at an all-time high and horticulture is still punching well above its weight. Log prices have recovered in recent months too.
So if things are this rosy isn’t it time to sit back, relax, kick into Christmas and wake up at Waitangi?
Market conditions always change and you and your rural business need to be ready.
There are no such things as surprises, only piss-poor planning. Black swan events can and do happen like they did with 9/11.
The thing is anyone can run a rural business in the good times but few can run one in the bad times.
Bad times will come – and go. They always do.
It was only four years ago in the 2015/16 season when farmers and their rural suppliers got hit hard with a $3.90 dairy payout. Veterinarians, feed companies and rural merchants all took big hits to their bottom line. I wonder how ready they really were?
It pays not to be myopic and short-term memories.
Instead you and your rural business need to be on the front foot.
Here are the top 5 things you can do to be ready and resilient when, not if, the next rural downturn comes:
1. TRAIN YOUR RURAL SALES PEOPLE CONTINUALLY
Training is a life-long commitment. You can always get better at getting better.
Federer, Messi, Le Bron, Johnson, Williams all train daily. This is why they are the best athletes on earth and get paid the multi-million dollar endorsements they do.
They have a commitment to continual improvement. Each and every day.
They make the sacrifice and commit to the discipline of training. This what separates the few from the many.
I focus on sales people because sales is the literal lifeblood of any business. Without sales, no one gets paid.
What we learn decays and deteriorates within a matter of days due to the Ebbinghaus Curve. We lose up to 70% of what we learnt two days after we’ve being trained or taught:
This means we have to regularly remind and reinforce our learning so we remember. Long tails, not short slumps.
One-off “drive-thru” training does not work. One hit wonders won’t turn the boat around.
Nor do the wrong trainers.
You need to pick your trainer carefully, just like you should with your talent.
Not all trainers are created equal. Most are guessing generalists whilst a few (including us) guarantee what we teach works.
Being receptive to training means you have to drop your ego or fear of being exposed. Have an open mind. Don’t worry if training exposes your deficiencies. Think of efficacy instead.
You have everything to gain and nothing to lose when it comes to training.
Train to be the best and beat the rest.
You must never stop.
2. ATTACK A LEAD, DON’T DEFEND ONE
Be your biggest competitor and critic.
Don’t get complacent, fat or lazy. Commit to using the good times to build buffers for the bad times. Don’t blame the environment, blame yourself. Take responsibility.
The Sigmoid Curve, which I reference in other blogs, is a classic case.
When you change at Point A you have the energy and resources to become better. At Point B you have nothing and that’s when you die (Blockbuster, Kodak, Blackberry).
Netflix attacked their own business model in 2011 when they went from mailing DVDs to online. Their share price plummeted 80% overnight but look where they are now. $US38bn and growing as a content heavyweight that rivals Hollywood.
Be demanding of yourself. Don’t be afraid to ask the hard questions:
- Can we be better?
- What are we doing that’s not working?
- Who do we need to talk to to find out?
- Have we faced our brutal truths?
- Is our business model right?
- What’s our “stop doing” list?
- What should we stop, start or continue?
3. UPWARD SPIRALS, NOT DOWNWARD SPIRALS
People and businesses get themselves into a bind when they repeat mistakes that hurt and harm them.
You have to break the cycle of bad business decisions.
One bad decision after another only compounds leaving you with less options:
Discounting is a classic case.
It destroys margins that then conditions your customers into a cost mindset rather than one based on value.
It also shows you’ve run out of ideas.
Discounting is dangerous because once you start on price, they leave you for price.
If your rural sales system isn’t working or your marketing is missing the mark, stop and change.
Get curious. Find out why. Ask your customers what they think and feel. Look at others outside your industry. Learn from them.
Talk to those that can teach you how to be better and stop making mistakes that are murdering massive amounts of your money (Facebook ads, Google Adwords, social media vanity metrics are some of our favourites, our list goes on…).
4. PLAY THE LONG GAME BY BEING OF SERVICE
By this I mean make sure you are always serving the interests of others before you serve your own.
This is such a basic premise of common sense yet I am continually amazed by the sales people and social media posts I see serving themselves before others.
A barrage of humble brags with plenty of “we” before “me” language. They don’t have the self-awareness to know it makes them look really stupid.
We instinctively know when someone is serving their interests, not ours.
Conversely, we know when someone is being genuinely authentic and is in tune with what we need. There is a sincerity. They have a duty of care and a genuine intent.
The giveaway is the giveaway in the form of the questions they ask. Ones that are both short-term and self-serving.
eg. “what’s your budget?”, “who do you know?”, “what do you want to know about us?”, “when could we talk?”
By serving the needs of others you play the long game. You build a bank of trust which you can then make a debit from in the form of favours.
The credit is there but your withdrawals need to be careful.
You have to work hard to earn that right.
Be patient. Don’t rush. Don’t push.
5. COMMIT TO LIFE-LONG LEARNING
I’ve been doing this for 18months now. I stopped watching the news and Netflix.
Instead I read.
I am careful and conscious of the content I consume because the content needs to be nutritious and filling. I cut out the crap.
I follow the right authors. I listen to podcasts on long drives. Downtime is always converted so I become a better learning machine (I’m still a work in progress mind you!).
I invest a disproportionate amount of money into training. I’ll be attending a US training course at 5am this Sunday. Sounds extreme but I know I will be one of very few doing it.
It means I’ll have to sacrifice my Saturday night. Big deal. There will be plenty more.
The world’s wealthiest man, Warren Buffet, reminds us:
“The more you learn, the more you’ll earn.”
WHAT’S THE ONE THING YOU SHOULD DO RIGHT NOW?
My best advice to you is this:
Be a creator, not a consumer. Start writing. Even if you don’t post, write something. Share your ideas and insights. Always be connecting and communicating with your customers. Out of sight is out of mind.
Resilience and readiness comes in building your list (aka. your email database).
Don’t rely on social media networks to do the job for you. They can shut down your account or change the algorithms overnight.
Downturns come and we all need to be ready.