In Edible-Alpha® podcast #62, Tera talks with Ted LeBow, cofounder and managing principle of Kitchen Table Consultants, about how small food and farm businesses can stay afloat through the current COVID-19 crisis. Because Ted works one-on-one with entrepreneurs to help them build profitable food and ag enterprises, Tera felt he’d be the perfect guest to guide listeners during these unprecedented times.
Overall, Ted stressed staying as calm as possible amid the madness and practicing open communication with team members and partnering businesses. As for what small companies should prioritize right now, first figure out where cashflow stands, then contact customers, vendors and banks, which may be understanding and flexible.
Next, small businesses should plot out their cashflow forecasts on a spreadsheet to get a picture of what the coming weeks and months might look like. Look at expenses to see where it may be possible to free up some money. Ted suggested starting with labor, which could include layoffs or furloughs, then landlords, who may allow some wiggle room. As for suppliers, address those most vital to the business’s long-term survival first and try to work with them on a plan.
When talking with banks, Ted said it’s best to be honest and transparent, as he and Tera both expect them to be friendlier to small businesses than they were during the Great Recession. Also consider government loan programs and other financing options sprung from this crisis. But before borrowing more money, closely evaluate the business to ensure it has a real shot at surviving—or else entrepreneurs could be just digging a deeper hole. Companies should also avoid pivoting too much to chase after sales during this chaotic time, unless they really want to stick with the new direction long-term.
Next, Ted explained how to do cashflow forecasts and pointed listeners to Kitchen Table Consultants’ website for helpful templates and webinars. He and Tera also touched on the agriculture sector and how all of this financial advice and strategy pertains to farmers specifically.
Finally, they agreed to circle back in a month to six weeks to revisit these topics again, since the business climate will undoubtedly keep changing as this pandemic plays out. Be sure to tune into that conversation, as well as other upcoming Edible-Alpha® podcasts that’ll outline smart strategies for businesses weathering this storm. We’re all in this together.