Financial stability

Reasons for loss of financial stability

Reasons for loss of financial stability

It is common knowledge that the reason for loss of financial stability is lack of cash, but the real causes of such a state of finances are always the consequence of a combination of mainly our actions and external factors beyond our control.

Financial stability arises from a number of factors, and lack of cash may have a very different basis than, for example, a fall in the price of one product. Stability is not and should not be viewed only through the prism of today, or even the coming year. Stability is a mechanism that should also be thought of in terms of the distant future. What to do and how to act in order not to fear losing it in one, two or fifteen years’ time – perhaps also as a result of actions taken now. It is worth knowing the one common cause of problems in business that most effectively destroys it: surprise. Confronting something unforeseen and unexpected always carries a huge risk and is the cause of most problems, not only for individual companies or farms, but also for entire sectors of the economy.

To avoid being caught by surprise, three basic rules should be remembered and applied:

  1. make the most of your resources and advantages, but be aware of weaknesses and shortcomings,
  2. prepare for everything as best you can, leaving nothing to chance,
  3. be proactive in acquiring knowledge and keep analysing the course of events.

Planning your actions and keeping a close eye on developments minimises risk. On the other hand, acting according to the principle “it will happen somehow” will sooner or later end in the financial collapse of the farm.