There will be times in business when your income is zero. You might as well plan for that right now.
For farmers, a wheat crop might be entirely hailed out, and they may lose the entire year’s income. They have to plan for that or it’s going to put them out of business. The same thing can happen to any business. There will be times when at least part of the business generates zero income, whether that’s a zero for the month or a zero for the year.
Small town people use a couple of different tactics to plan ahead for those lean times. One tactic is to think long term. Knowing that I have to plan for five years of really variable income, what I can do now to make that better? That’s taking a really long term perspective.
When my friend Rob Hatch‘s business received a windfall of unexpectedly strong sales, he said he kept thinking to himself, “plan for zero, plan for zero.” So he set aside money for future lean times. That’s taking a long term perspective.
The other tactic is cultivating multiple lines of income. This also comes from farming. If you know that your entire wheat crop may fail, then you may also plant milo or soybeans, or you may take in livestock and raise cattle to help even out the variation.
That’s also something that any of us can do. We can look at our business and say, “What would be another line of income that would be compatible here that would help even out some of the volatility that I know we’ll face?”
Small town people also extend this further, to even unrelated businesses, like say a liquor store and a cattle ranch. When the cattle market is headed down then we like to hope that the liquor market at least will be stable or maybe will be up.
Plan for Zero is one of the Small Town Rules that any business can use to thrive in today’s economy.
- These small town neighbors bought vacant buildings, brought them up to code. Here’s what happened next - March 12, 2018
- The giant checklist of social media marketing basics for small town business - March 5, 2018
- Tourism idea: host a rural retreat after a big conference in the big city - February 26, 2018
- Rural business idea: Rent chicks for Easter - February 19, 2018
- What hours should a retail store be open in a small town? - February 12, 2018
- Want more young families to shop downtown? Consider family parking - February 5, 2018
- How independent retailers can trick Alexa, Siri, and Google Home to capture orders from local customers - January 29, 2018
- Who are the next 5 people who will hire you? - January 22, 2018
- 2017 was the retail apocalypse. What does the future of retail hold for small town stores? - January 15, 2018
- New after-conference rule: the 2-to-1 rule - January 8, 2018