Weather, inflation, trade uncertainty, global geopolitics, and supply and marketing chain disruptions can lead one to say, “Enough is enough!” Well, this is the world of agriculture and the economy. While there are many challenges, opportunities exist for those who step up their management intensity.

First, manage the controllable factors and manage around the uncontrollable variables. You cannot control what happens in Washington D.C., Brussels or Beijing. Decisions made elsewhere will impact your strategy, but you must position your business to manage around those events. A larger focus on the controllable variables, such as executing a marketing and risk management plan and attempting to improve operational efficiency with your resource base will be key to long-term success.

Inflation and extreme volatility will require increased financial management intensity. When compared to decades ago, many businesses have more zeros and commas on the balance sheet, income statement and cash flow. The days of monitoring financial results and projections once per year have gone by the wayside. Remember, good and bad decisions and black swan events can compound financial outcomes over time. Financial sensitivity analysis is critical for a successful plan.

Next, I might sound like a broken record, but working capital and quickness to cash will be imperative. Whether it is business or personal, working capital can be a blocking strategy for adversity and a proactive variable for capitalizing on opportunities.

As we reemerge from social isolation, selected educational events and activities, whether face-to-face or online, that can re-energize the business, family and personal life will be critical. Being informed and engaged with other lifelong learners can be part of the recipe that will be the difference maker for the remainder of the 2020s.

Sometimes events and circumstances can be overwhelming. Take incremental steps forward, sweat the small stuff only you can control, and realize that there is a silver lining in every storm cloud.

Dr. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Polytechnic Institute and State University. Dr. Kohl has traveled over 8 million miles throughout his professional career and has conducted more than 6,000 workshops and seminars for agricultural groups such as bankers, Farm Credit, FSA and regulators, as well as producer and agribusiness groups. He has published four books and over 1,300 articles on financial and business-related topics in journals, extension and other popular publications.

© Northwest Farm Credit Services 2021