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Business Buffers?

 
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I'm reading the book Essentialism, and it mentioned that the businesses that succeed generally have buffers in place to prepare for the unexpected. That got me thinking, because as an almost-new business owner, I don't feel like I've planned for that.
As gardeners, farmers, homesteaders, crafters, etc., what buffers do you have in place for your business?
 
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I guess this is about income, and that's complicated. I can only offer my perspective, which seems to work for me.

My little business offers professional services. The work waxes and wanes with the business cycle; it's been the same story for decades.

And my buffer is gardening, farming, homesteading, crafting, and all those things that are tangible and practical (and meaningful). These save me a ton of money, especially when cash flow is tight, and they can save me a whole lot more if I need to go black belt frugal -- I have built up those skills. I like having options in both directions.

But still, my buffer stuff requires time and infrastructure and some cash money. So it's a pushmi-pullyu arrangement. Once the land is paid off and the retirement buffer is a little bigger, we will see. But I suspect I will still have my hand in the fee-for-service world somehow, if only for beer money; the difference is that the services will be more personally fulfilling.

 
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Thank you for mentioning that book, it seems really interesting, and I’m gonna read it myself.

Back to your question, is the buffering referring to one’s mental state or physical things one needs to do?
 
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Ok I read a review of that book.
I have been in business for about 40 years, and made many mistakes, but some things I have learned have been great.
I will summarise them;
- work smarter not harder
- have a blame free work place, have people volunteer a stuff up, sort out how to prevent it so it may not happen again.
- create systems so that everybody is doing each function in the same way. IE not putting the cart before the horse.
- Why are you in business- To find, serve and satisfy your customers. Meet that criteria and the cash will sort itself out.
- Always set the customers expectations and meet them. Dont over promise
- Admit mistakes and rectify if possible. [ I once lost a 500 year old map of Australia, I rang the owner and he replied because I had told him and accepted responsibility he would give me 6 months to find it.
 The deal was I would pay for another, it seems they were not impossible to find. It was never found, he got another copy and he was satisfied.
 
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A lot of the time businesses use buffers by having a large inventory of stock (items for sale).

That way if something happens to the supply chain there are still items for sale and they are still making money.

Nikki said, As gardeners, farmers, homesteaders, crafters, etc., what buffers do you have in place for your business?



Seems to me that would for most of these kinds of businesses.

Nikki, I am curious, how does the book suggest using buffers?
 
pollinator
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Nikki Roche wrote:what buffers do you have in place for your business?



Would cash on hand count as a buffer? Idea being to pay your employees and suppliers when things are bad.

Also, I have learned in the last two years that planning for the unexpected is hard. Who would have thought toilet paper would for a time be hard to find. I feel that looking at the vulnerabilities of the supply side would be a good use of time. What things on the supply side, if they can not be found would cause business trouble? Like not having bags to put the product in or a key part to a machine.
 
Nikki Roche
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Liv Smith wrote:Thank you for mentioning that book, it seems really interesting, and I’m gonna read it myself.

Back to your question, is the buffering referring to one’s mental state or physical things one needs to do?



Mostly referring to physical things, but I imagine I could use more buffering for my mental state, too.

I'm not through with the book yet, but it's been interesting so far. A few helpful insights for me.
 
Nikki Roche
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John C Daley wrote:Ok I read a review of that book.
I have been in business for about 40 years, and made many mistakes, but some things I have learned have been great.
I will summarise them...



All great points, thank you! That took a lot of guts to admit to losing the map, but that's the kind of person I'd want to work with/for, too.
 
Nikki Roche
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Anne Miller wrote:A lot of the time businesses use buffers by having a large inventory of stock (items for sale).

That way if something happens to the supply chain there are still items for sale and they are still making money.

Nikki said, As gardeners, farmers, homesteaders, crafters, etc., what buffers do you have in place for your business?



Seems to me that would for most of these kinds of businesses.

Nikki, I am curious, how does the book suggest using buffers?



Good point about inventory. I remember when seeds were a little difficult to get last year, so that's a good reminder to order plenty and order early.

The book gives a few examples of buffers, like allowing more time than expected for meetings and projects and putting money away when you earn extra. But it mostly says to "prepare for the unexpected"."
 
Nikki Roche
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T Blankenship, I didn't even think about product packaging! Adding that to my buffer list of things to consider. "Vulnerabilities of the supply side" sum it up pretty well.

I've given some thought to it, and here's my list for things to consider. I'm coming from the viewpoint of a home bakery business that adds part-time income for our household, but my husband's job has been unreliable at times.

1) Savings account and cash on hand for the slower months.

2) Develop passive income streams. Working on PEP BBs for this!

3) In case of lockdown or other reasons for no fairs or farmer's markets -- Plan DIY kits for parents to take home to kids. Online sales and porch pick-ups. Pop-up sales.

4) Have an email list and social media presence to keep in touch with people.

5) To combat vulnerabilities in the supply chain - connect with local source options. Have recipes that can handle ingredient substitutions and/or tried and true recipes that don't all use the same ingredients. Keep extra product packaging and labels on hand.

6) To combat rising food costs - Sell smaller items, reduce fancy packaging, bake more "essentials" than every day luxuries, offer to barter
 
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In business, we (my husband and I both have our own) have plans B, C, D, etc.
In my case, a few years ago my main clients were bought by a conglomerate and I expected to lose them, so moved into another area of specialty (I work in two very specific niches). As it turns out, the main client split into 7 companies after the deal went kaboom, and by then I had established clients and gotten experience in the new area. Today I work in both, and could expand into another region if I had the staff (I don't).
I can also repeat everything Douglas said: I have a lot of backup plans of things I could breed, raise, sell, etc if I needed to stop doing my cash work. And I could conceivably go total black belt and just hunker down and spend no cash whatsoever for a bit.
Meanwhile, we are also backup for each other. My husband's company got steamrolled by the pandemic and is just coming back now. Luckily, mine has been absolutely jumping since the first sneezes, with no sign of stopping. Having someone to tag-team with makes it a lot less hair-raising when things start getting stressful.

If I was talking to mentorees, I would say: get to know your market and what they need, and consider how you could pivot  if necessary with the least cost/effort.
 
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