The pet sector is one of those that manage to go through economic crises more easily, since the strong relationship between guardians and pets keeps the market active. However, even these entrepreneurs felt the impact of the coronavirus pandemic on their business.
Every moment of instability requires precaution and thorough planning of the company’s management processes. And the core of these processes is financial management, which allows the administrator to see the real situation of the business so that it does not acquire debt, honor its commitments and keep the activity without the accounts going out of control.
After all, how to organize finances in times of crisis? We have separated some tips for you. Stay with us and have a good reading!
Plan for a drop in sales
The moment is one of uncertainty. It is not known how long the health crisis will last, even if trade gradually returns to normal. In this scenario, it is difficult to make sales projections, which can seriously affect cash flow.
Thus, it is important to calculate the impact that the crisis can have on the company, estimating a 30% to 50% drop in revenue for the next 2 or 3 months. This allows the manager to organize other company processes.
Review cash flow control
Fixed costs, such as rent, maintenance and payroll, are the ones that weigh the most for entrepreneurs in times of reduced sales. The variable costs, in turn, which depend and vary according to sales, will be lower.
It is crucial that, during an economic crisis, the manager reviews and separates these expenses very well. Only then is it possible to know the amount needed to maintain the business in the face of lost revenue.
Identify expenses that can be cut
With the costs all raised, now is the time to review the expenditures that can be cut. Evaluate your inventory, try to reduce the energy bill, negotiate the rent, give holidays to employees, optimize your processes and discourage anyone who leads to waste.
It may also be a good idea to review your suppliers if the agreements are not working for you.
Renegotiate debts with suppliers and partners
The pandemic did not leave anyone out, affecting companies from all points of the production chain. Therefore, this is the time to renegotiate debts and contracts with suppliers and partners so that everyone will be less affected by the pandemic.
Renegotiating and reducing the rent, for example, is more advantageous for the owner of the property than being left without a tenant. This situation can also be opportune to find new partners, who have more attractive conditions for your business.
Look for opportunities
The crisis is an opportunity to grow, as everyone knows. In the case of significant changes in consumer behavior and restrictions on social contact, innovation is the watchword.
Entering e-commerce, for example, has been the lifeline of many companies, as the sector has grown dramatically in recent months. However, the health crisis only anticipated a strong trend, which is online consumption.
You can always offer services of value to your customers, innovating in your mix of products and pet shop services, of course, but organize yourself to be present on the internet and sell in your own store or in marketplaces. This can be the lifeline for maintaining revenue and continuing the business.
As you know, the Covid-19 pandemic has affected trade quite dramatically. Since it is not possible to predict how long we will be in this situation, organizing the company’s finances is essential to get through the crisis. Keep these tips in mind and optimize your management.
In fact, if you want more in-depth tips on the subject, download our free e-book and see how to get around the coronavirus crisis!