Concerns about the region’s poor harvest have spilled over from farmers to local businesses, though according to some regional business mentors, there are ways to prepare for an economic slowdown.
The wet harvest season combined with an October snow and November freeze that damaged or outright destroyed various crops, may have an impact on how agricultural producers spend money in the local economy. According to Eric Giltner, senior area manager for the U.S. Small Business Administration, businesses can weather the storm by avoiding “knee jerk” responses such as laying off employees and looking at the efficiency of their operations, while investing in their employees.
“Inevitably things are going to get better again, and now you’re behind the eight-ball finding people to replace the ones that you’ve laid off, and you’re turning down business because you can’t do it,” Giltner said.
According to the U.S. Bureau of Labor Statistics, the unemployment rate for the state stands at 2.4% as of December, where it has remained since July. Layoffs though, could be a potential boon to others seeking to hire.
“If you’re really smart you can hire some people when it’s a downturn just because you’ve got an opportunity to get someone who might be really good,” said Steve Moser, a business mentor with SCORE, a national network of experts that provides business counseling to start-ups.
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When Barry Wilfahrt became president and CEO of the Grand Forks/ East Grand Forks Chamber of Commerce in 2008 he looked for ways to cut costs, and found the Chamber had six telephone landlines, said Giltner. He cut them to one.
“That saved him like $5,000 a year, getting rid of all that stuff, so look at operational ways to save costs,” Giltner advises.
Unsold inventory is money tied-up and sitting on the shelf, so looking for ways to reduce it, either by selling it off or not ordering as much, can be a benefit to small businesses.
“You need to get rid of your inventory before it costs you, because it doesn’t improve with age,” said Keith Reitmeier, Outreach Sales Representative for TrainND based at Lake Region State College. “A downturn is a good time to really take a hard look at your inventory and try to shed whatever you can.”
Reduced inventory can also free up space that businesses can reconsider using or even eliminating heating and cooling costs, said Moser.
Employee training can be done in slack periods, according to Giltner, which makes it possible for businesses to emerge from a slowdown with a more educated workforce. He also suggest involving employees in policy decisions, such as looking for ways to reduce costs without layoffs, in order to keep employees engaged in the company.
