Doing it Tough

Economic conditions have been difficult for the last few years, and it looks like these conditions will not improve in the short term. This is mainly due to the financial crisis in Europe and the United States. In our local area, those in the kiwifruit industry are enduring tough times due to the PSA virus.

In hard economic times burying your head in the sand is not an option.  Rather, taking control, to the extent possible, should be the preferred option.  One of the main upsides to this approach is that a lot of the uncertainty, which generally drives emotional stress levels, is mitigated.

Having owned a business through the crash in the eighties and the recession in 1991, and having advised businesses over the last four years, outlined below are some thoughts to assist.

• Understand what you can control, and the things you can't.  One of the lessons I learnt was to focus my energy on the things that I had the ability to change.  Whilst the uncontrollables are normally important, exerting a lot of emotion and time on these factors means less time focusing on the things you can control.
• Have a Plan B.  One of the key drivers of stress in these economic times is not facing up to reality.  People in these situations often look for miracles to save their business.  Unfortunately, a miracle may not come.  A Plan B, even if it means shutting down the business, may limit your loss at that stage, as opposed to carrying on business and loosing everything at a later stage. 
• In difficult times you generally find out who your friends and supporters are.  These people will be important, not just from a business perspective, but also on an emotional level.  When under stress, irrational decisions can be made.  Where appropriate, utilising the skills and advice of these people may result in correct decision making.  Very simply, talking about issues with the people you trust helps.  Family are extremely important in these situations.  Keeping them informed of the key issues and your Plan B will hopefully reduce stress levels.  Very rarely do I come across people that can handle the stress by themselves.
• Make sure you look after yourself.  A high level of stress affects health and not only leads to poor decision making as mentioned above, but can also impact negatively on your personal relationships.
  An initial business failure does not have to mean success is unobtainable in the future.

 Robbie Neilson is a Director of RHB Chartered Accountants Limited.

This article expresses the views of Robbie Neilson, and do not necessarily represent the views of the employees and directors of RHB Chartered Accountants Ltd.

Published in the Bay Business Times, October 2011