A crisis. Devaluation. Influence on small and medium business on real examples
I am a business consultant and an active Internet user and, like many others, I constantly look through publications in various mass media for the situation in the economy, including for the reason that my well-being directly depends on it. Like many, I am interested in the causes of the crisis, its development, and possible prospects, because if small and medium businesses do not develop, my activity will also cease due to the lack of clients.
Here and now I decided to systematize my own observations. By the nature of my business, as a business consultant, I constantly come across a variety of companies. This could be potential customers, customers with whom I worked before or are currently working. New and old customers regularly contact me: someone with a question, someone with a problem.
If I encounter a new company, I will definitely study its methods of work, because without this stage I will not be able to draw up a plan for solving the set task and calculate the cost of the work. If old customers turn to me, I always wonder how their business is going, what problems interfere with their work, how they cope. Based on the statistics I have collected over the years of work, I have already written one article How to lose a business. Real stories from a business consultant.
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And today I want to share with you my practical observations collected during the last year, from the first days of the crisis to the present day.
So, the initial data: my personal experience of communication with businessmen from Moscow and St. Petersburg. Unfortunately, I don’t know anything about the regions, as I haven’t been working with businesses outside these cities in recent years. I think that there will not be many differences for a regional small and medium-sized business, but still, I will ask you to take this nuance into account.
Today in the media and at all sorts of trainings constantly heard about the crisis in the economy. Many experts and coaches talk about the difficulties of the current period, about problems in the economy, but these are all common words. And what is the crisis in practice for small and medium-sized businesses and how to act in order to maintain their business and prepare the ground for future development, no expert says. In the article I will try to tell about this phenomenon on the example of one of the sides of the crisis, namely on the example of devaluation.
Devaluation is one of the most important business problems in times of crisis. The fall of the ruble exchange rate, as a result, an increase in the cost of imported products, as well as a fall in the level of income of the population, lead to a noticeable decline in sales volumes, as well as to a wide range of associated problems in business.
As examples, I will cite four different companies. Of course, I will not voice their real names, this is not important, because in this or a similar way, many people try to solve the problems associated with the crisis.
This company sells imported professional cosmetics: buys goods abroad, delivers to Russia and sells here. Naturally, the business associated with the resale of imported goods, has suffered very much in a crisis. Moreover, in this case, the goods are not just cosmetic products designed for the end user, but the materials necessary for professionals to provide services. At the same time, any appreciation of the material leads to a decrease in the profit of the beauty salon master, since it is not desirable to raise the price of services in a crisis. As a result, many professionals in a crisis tend to use cheaper counterparts.
How did this company work?
All pricing here was rigidly tied to the euro. During the period of stability of the exchange rate, the price changed once every few weeks, and it was insignificant that it was not critical for customers. But with the beginning of the devaluation, the purchase price in rubles began to grow almost every day.
For example, a product that has recently cost 800 rubles, in a week could cost 900, then rise in price to 1,000 rubles and more. And when the euro exchange rate exceeded 80 rubles, the value of a unit of goods in this company became incredibly high for this kind of product.
How did the buyers react?
Most began to search for more profitable suppliers, to the extent possible such products whose value is not related (or not so tightly connected) with the euro. The company also began to receive requests to switch to prices in rubles and to abandon such a rigid bundle of the value of goods with currency fluctuations.
What did the company do to cope with the problems?
First of all, they opened a new site, made a landing page, started to actively promote their products on the Internet. During this period, I was given a lot of different tasks, I, of course, implemented them. We started our updates successfully, advertising worked, people came to the site, showed interest, made 1-2 purchases and left. Even then it was clear that the company needed to reduce the price, or at least fix it at a certain level. Any buyer will be nervous about the constant change in prices, which we observed in practice.
To which I received a very specific answer: “Our cosmetics are like a Mercedes car. Mercedes, as you know, will be sold at all times. So our cosmetics will be sold in any case, regardless of its value. "
In this case, the price of goods in the price of the company was specified in arbitrary units, tied to the euro. As a result, the buyer who ordered the goods (at the euro rate of 50 rubles) in the amount of 1000 rubles, in 2-3 days could be put before the fact: the euro already costs 55 rubles, and the bill is issued for the same list of goods, but for the amount of 1100 rub. Of course, no one buyer will like these surprises.
After that conversation 5 months have passed, and now the situation is as follows:
But none of this helps to return buyers. If a client leaves, it can be much more difficult to return him even in better times than to start a new person from scratch.
In addition, nervous and panic solutions also did not contribute to increasing customer confidence. You should not overstate the prices, and then arrange grandiose discounts on the B2B market, to which this company also belongs, this behavior is regarded as a sign of the company's weakness, which does not contribute to increasing the level of customer confidence.
The approach of this company looked like this:
As it turned out, the market is somewhat different, and such an approach does not justify itself. This company has fallen sales, quality of service has declined. The main buyers are gone.
What is the problem of this company:
It is very important to remember that today is not 1998 or even 2008. Online trading is very well developed. And therefore, if your buyer is not satisfied with any of the possible aspects of cooperation, he will simply type in the search engine the name of the desired product and will be able to choose any supplier from the extensive list. At the same time, he will compare prices, conditions of cooperation online and turn to where the cost of goods and related services will be the best.
And therefore, the renewal of the managers, and the large discounts of this company have not helped. The client, who was unhappy, had already left. Now he has a new supplier, contracts, suitable conditions for cooperation. In terms of working with professional cosmetics, most likely, the former buyers have already been trained to work with new materials, the masters have mastered the new technique, and therefore it will be unprofitable for the buyer to return to the past supplier.
The devaluation process found this company during the transition to a new accounting system. And the first thing they did was fix the price. Those. Revaluation in the company occurs no more than once a week. The only exception could be the case of a very strong jump in the course, about which the clients were informed in advance. If no force majeure arises, then within 2 weeks the price does not change regardless of exchange rates.
Thus, the buyers of this company know for sure: if they ordered goods at a certain price, it is at this price that the goods will be shipped.
How was the problem of delivery of imported goods to the buyer solved?
What was the crisis for this company?
Devaluation shock. Due to the increase in the price of imported goods, a significant portion of buyers began to choose low-cost domestic counterparts. On the one hand, it is even good for domestic producers and for many buyers. On the other hand, domestic production was not ready for a noticeable increase in demand; accordingly, Russian producers could not fully satisfy the demand for goods.
The company significantly reduced sales of imported goods. The sale of luxury finishing materials was particularly hard hit. Buyers who had previously bought luxury materials turned their attention to the average price category of materials, which, due to price increases, became as expensive as recently elite categories of goods, and buyers of goods from the middle price category began to choose cheap materials. As a result, the company's total turnover has declined.
What is happening now:
Of course, there were losses during this period, not only on the volume of sales, but also on exchange rates, when the sale was carried out at a fixed price, while the purchase of material was already taking place at a new rate. But thanks to the reputation of a reliable partner who does not change the terms of the transaction in its process, as well as a reasonable cost savings, these losses did not become critical, and the company is working steadily and, most likely, will survive this crisis successfully.
During a crisis, it is especially important to concentrate on the main thing, but now it is not the preservation or multiplication of profits, which is practically impossible, but the preservation of partnerships with customers. And company 2 has so far successfully coped with this important task. The crisis can not last forever. As a result, part of the companies will come out of it with regular customers and partners, while others will be forced to restore the customer base from scratch.
This company also experienced devaluation shock. The cost of raw materials, which they bought for the production of their products, has increased significantly. This problem was partially offset by profits. As a manufacturer, this company had such a mark-up on goods before the crisis, which would make it possible to keep the price now at a competitive level.
The second component of the crisis that this company felt was connected with Russian counter sanctions. Due to the ban on the purchase of food in Europe, there is an urgent need for new suppliers. Goods had to be ordered in Puerto Rico, in Latin America, etc. As a result, the company was very feverish, because it was necessary to find the analogues necessary for production, and, at a favorable price, check the quality for compliance with the requirements and conclude new contracts. Such changes, also urgently, always cause increased nervousness in the enterprise.
The consequences that this company has experienced:
How the company responded to the crisis:
If earlier the company did not think about many seemingly insignificant expenses, now all processes are optimized. How do I know about this? I was ordered to automate and introduce new information systems.
Another rather non-standard solution that this company applied is the refusal of the office. If they did not touch the production, they refused to rent the office at all. Servers were installed at home by company management, accountant, managers, and all the office-staff needed to support the company’s work, sharing information using a collaboration system, telephone communication, e-mail, etc.
What happened as a result:
Sales fell 2.5 times, production also worked intermittently due to the search for new suppliers, as well as due to the lack of demand for products. But thanks to the timely transition to cost saving mode, the company managed to survive a difficult period.
Now, sales are gradually growing, buyers are returning, as there is always demand for food, stores need a decent assortment, and final consumers have become accustomed to new price tags and are increasingly returning to the usual product mix.
For this company, devaluation shock was very painful. They suffered losses due to currency fluctuations. Since the company did not have a strict accounting system, and the goods were mainly purchased under the order, several times the following occurred: buyers consciously paid for the ordered goods on the terms of 100% prepayment in the shortest possible time in rubles at the current rate. After that, due to devaluation, this product was purchased from a foreign supplier, sometimes even more expensive than it was already sold to the buyer.
In addition, sales fell very noticeably. Saving when choosing technology in connection with the crisis began and small companies and individuals. But most importantly, state-owned companies and large corporations also noticeably cut the budget for the purchase of high-quality equipment. Someone refused to have already almost signed contracts, someone postponed investment projects related to the purchase of equipment until better times, and someone decided to switch to other technologies that allow saving money, for example, to work in the cloud and t .d
As a result, the company also carried out staff reductions, and also began to actively use methods to stimulate customers (promotions, discounts, gifts). Expenses were also optimized and a more efficient accounting system was introduced. But, nevertheless, demand has fallen significantly on equipment, and therefore the company is going through a difficult period.
So, the crisis in the economy is a fact with which we all have to live. At the same time, I want to save the company, minimize losses and, if possible, preserve the client base and revenues.
Using examples, I showed different ways to respond to the crisis in different areas of business and briefly outlined the results of certain decisions. Now I want to give you recommendations: what is needed and what should not be done in a crisis.
So, what not to do in a crisis:
What should be done in a crisis, what measures will help to successfully overcome it:
The current crisis in Russia is at the same time a test of strength for any business and the possibility of conquering new markets and new customers. Now, when customers have become much more attentive to both the service and the prices of any goods and services, for companies that work in the field of B2B, there is a real opportunity to expand the list of their clients.
In a crisis, the usual business connections can be destroyed in a matter of days, companies that can offer the best price or some other benefits get the chance to achieve significant success in a short time. Moreover, today many corporations are considering with interest representatives of small and medium-sized businesses as potential business partners, because a small company is more flexible, adapts more quickly to changing market conditions, and therefore can offer better prices and conditions compared to the usual large suppliers.
Not long ago, domestic business was booming, companies were developing, business profitability was growing, and the reliability of a familiar and convenient partner was valued higher than a better price. Many agreed to overpay a little just to continue cooperation with a convenient partner.
Today, due to the crisis, revenues have declined markedly, including among large corporations. Large companies can also go bankrupt if they did not know how to quickly adapt to the changed market conditions. And because the purchase price of goods has become a very important factor. As a result, small companies can now enter the market as new business partners for large corporations. And those who manage to establish business contacts during a difficult period will retain new contracts after the crisis and will have the opportunity to actively develop their business. I believe that this opportunity must be taken advantage of.
I believe that the crisis that we are all seeing for business looks like a combination of devaluation with a fall in household incomes, and, as a result, is accompanied by a fall in sales and a decrease in the total amount of money in the economy.
But even such difficult circumstances can and should be used. I described one opportunity above - a small company gets a chance to become partners and suppliers of a large corporation. Another opportunity is the opportunity to become a manufacturer.
I decided to say this, even despite the fact that these my thoughts could be the cause of the minuses (although I really hope that this will not be so). The fact is that the situation in which our compatriots, due to a drop in the level of income, do not have the opportunity to buy the necessary equipment, clothing, materials and much more abroad, has not only negative sides. There is a plus here: the money remains in the country.
What happens when we buy goods abroad? Financial resources go abroad, first of all, the foreign manufacturer earns, and our country receives only profit from the delivery of goods and, in some cases, customs duty.
Now, when purchasing power has fallen, you can start your own production, and they will buy from you! Of course, I do not mean areas such as automotive or the production of sophisticated equipment. You can develop the light or food industry.
So, for sewing high-quality and inexpensive clothes, not so many investments will be needed, likewise, a sausage or pastry shop can be a great helper in a difficult period. Moreover, you can also buy materials and products mainly in our country. And with decent quality in combination with a low price, your products will become very popular.
Why am I writing about this? I really want you, like me, to understand that a crisis is not only a problem, but also a new opportunity. There are many drawbacks in it, but there are also pluses. And we must strive to benefit from any situation, but look positively at life and our prospects!
In this article I will not deal with the causes of the crisis, as well as deal with forecasts of its possible development. I am interested in how various companies react to the crisis that has arisen, which of them successfully overcomes difficulties, who do not, and why this happens.
Here and now I decided to systematize my own observations. By the nature of my business, as a business consultant, I constantly come across a variety of companies. This could be potential customers, customers with whom I worked before or are currently working. New and old customers regularly contact me: someone with a question, someone with a problem.
If I encounter a new company, I will definitely study its methods of work, because without this stage I will not be able to draw up a plan for solving the set task and calculate the cost of the work. If old customers turn to me, I always wonder how their business is going, what problems interfere with their work, how they cope. Based on the statistics I have collected over the years of work, I have already written one article How to lose a business. Real stories from a business consultant.
')
And today I want to share with you my practical observations collected during the last year, from the first days of the crisis to the present day.
So, the initial data: my personal experience of communication with businessmen from Moscow and St. Petersburg. Unfortunately, I don’t know anything about the regions, as I haven’t been working with businesses outside these cities in recent years. I think that there will not be many differences for a regional small and medium-sized business, but still, I will ask you to take this nuance into account.
What is a crisis?
Today in the media and at all sorts of trainings constantly heard about the crisis in the economy. Many experts and coaches talk about the difficulties of the current period, about problems in the economy, but these are all common words. And what is the crisis in practice for small and medium-sized businesses and how to act in order to maintain their business and prepare the ground for future development, no expert says. In the article I will try to tell about this phenomenon on the example of one of the sides of the crisis, namely on the example of devaluation.
What does a business crisis look like: devaluation shock and its consequences
Devaluation is one of the most important business problems in times of crisis. The fall of the ruble exchange rate, as a result, an increase in the cost of imported products, as well as a fall in the level of income of the population, lead to a noticeable decline in sales volumes, as well as to a wide range of associated problems in business.
As examples, I will cite four different companies. Of course, I will not voice their real names, this is not important, because in this or a similar way, many people try to solve the problems associated with the crisis.
Company 1. Importer of cosmetics for professionals.
This company sells imported professional cosmetics: buys goods abroad, delivers to Russia and sells here. Naturally, the business associated with the resale of imported goods, has suffered very much in a crisis. Moreover, in this case, the goods are not just cosmetic products designed for the end user, but the materials necessary for professionals to provide services. At the same time, any appreciation of the material leads to a decrease in the profit of the beauty salon master, since it is not desirable to raise the price of services in a crisis. As a result, many professionals in a crisis tend to use cheaper counterparts.
How did this company work?
All pricing here was rigidly tied to the euro. During the period of stability of the exchange rate, the price changed once every few weeks, and it was insignificant that it was not critical for customers. But with the beginning of the devaluation, the purchase price in rubles began to grow almost every day.
For example, a product that has recently cost 800 rubles, in a week could cost 900, then rise in price to 1,000 rubles and more. And when the euro exchange rate exceeded 80 rubles, the value of a unit of goods in this company became incredibly high for this kind of product.
How did the buyers react?
Most began to search for more profitable suppliers, to the extent possible such products whose value is not related (or not so tightly connected) with the euro. The company also began to receive requests to switch to prices in rubles and to abandon such a rigid bundle of the value of goods with currency fluctuations.
What did the company do to cope with the problems?
First of all, they opened a new site, made a landing page, started to actively promote their products on the Internet. During this period, I was given a lot of different tasks, I, of course, implemented them. We started our updates successfully, advertising worked, people came to the site, showed interest, made 1-2 purchases and left. Even then it was clear that the company needed to reduce the price, or at least fix it at a certain level. Any buyer will be nervous about the constant change in prices, which we observed in practice.
To which I received a very specific answer: “Our cosmetics are like a Mercedes car. Mercedes, as you know, will be sold at all times. So our cosmetics will be sold in any case, regardless of its value. "
In this case, the price of goods in the price of the company was specified in arbitrary units, tied to the euro. As a result, the buyer who ordered the goods (at the euro rate of 50 rubles) in the amount of 1000 rubles, in 2-3 days could be put before the fact: the euro already costs 55 rubles, and the bill is issued for the same list of goods, but for the amount of 1100 rub. Of course, no one buyer will like these surprises.
After that conversation 5 months have passed, and now the situation is as follows:
- Their sales fell by more than 2 times, both in quantitative terms and from a financial point of view (turnover and, accordingly, profits, also became lower).
- Buyers are trying to lure discounts (up to 50%, and, moreover, the total purchase price for receiving discounts has also become noticeably lower than before).
- The management began massive layoffs of sales managers. (After 5 months, only one experienced specialist remained in the department, the rest were newcomers).
But none of this helps to return buyers. If a client leaves, it can be much more difficult to return him even in better times than to start a new person from scratch.
In addition, nervous and panic solutions also did not contribute to increasing customer confidence. You should not overstate the prices, and then arrange grandiose discounts on the B2B market, to which this company also belongs, this behavior is regarded as a sign of the company's weakness, which does not contribute to increasing the level of customer confidence.
The approach of this company looked like this:
We raise prices - we continue to invest in goods and hope for successful sales - we believe in our infallibility.
As it turned out, the market is somewhat different, and such an approach does not justify itself. This company has fallen sales, quality of service has declined. The main buyers are gone.
What is the problem of this company:
If you trade in imported goods, the price of which increases due to the change in the ruble exchange rate, your buyers will start buying cheaper counterparts from your competitors if you do not provide them with any special conditions. And if in retail sales you can still avoid collapse even in such difficult conditions, when you sell materials or tools necessary for a business, the buyer will be especially careful about the cost of your products, because their own profit depends on it.
It is very important to remember that today is not 1998 or even 2008. Online trading is very well developed. And therefore, if your buyer is not satisfied with any of the possible aspects of cooperation, he will simply type in the search engine the name of the desired product and will be able to choose any supplier from the extensive list. At the same time, he will compare prices, conditions of cooperation online and turn to where the cost of goods and related services will be the best.
And therefore, the renewal of the managers, and the large discounts of this company have not helped. The client, who was unhappy, had already left. Now he has a new supplier, contracts, suitable conditions for cooperation. In terms of working with professional cosmetics, most likely, the former buyers have already been trained to work with new materials, the masters have mastered the new technique, and therefore it will be unprofitable for the buyer to return to the past supplier.
Company 2. Sale of finishing materials
The devaluation process found this company during the transition to a new accounting system. And the first thing they did was fix the price. Those. Revaluation in the company occurs no more than once a week. The only exception could be the case of a very strong jump in the course, about which the clients were informed in advance. If no force majeure arises, then within 2 weeks the price does not change regardless of exchange rates.
Thus, the buyers of this company know for sure: if they ordered goods at a certain price, it is at this price that the goods will be shipped.
How was the problem of delivery of imported goods to the buyer solved?
- The invoice is issued for the amount in rubles, fixed at the time of the order. The price of the goods in connection with the change of course does not change.
- The term of shipment is 2 days. If during this period the goods have not been paid, it is removed from the reserve, and the account ceases to be valid.
- The company did not provide any additional discounts, the management chose as advantages - reliability in work and price fixing.
What was the crisis for this company?
Devaluation shock. Due to the increase in the price of imported goods, a significant portion of buyers began to choose low-cost domestic counterparts. On the one hand, it is even good for domestic producers and for many buyers. On the other hand, domestic production was not ready for a noticeable increase in demand; accordingly, Russian producers could not fully satisfy the demand for goods.
The company significantly reduced sales of imported goods. The sale of luxury finishing materials was particularly hard hit. Buyers who had previously bought luxury materials turned their attention to the average price category of materials, which, due to price increases, became as expensive as recently elite categories of goods, and buyers of goods from the middle price category began to choose cheap materials. As a result, the company's total turnover has declined.
What is happening now:
- The company is working steadily, although some nervousness and uncertainty about tomorrow remains.
- The company's management has revised a significant part of the costs and transferred the workflow to the economy mode.
Of course, there were losses during this period, not only on the volume of sales, but also on exchange rates, when the sale was carried out at a fixed price, while the purchase of material was already taking place at a new rate. But thanks to the reputation of a reliable partner who does not change the terms of the transaction in its process, as well as a reasonable cost savings, these losses did not become critical, and the company is working steadily and, most likely, will survive this crisis successfully.
During a crisis, it is especially important to concentrate on the main thing, but now it is not the preservation or multiplication of profits, which is practically impossible, but the preservation of partnerships with customers. And company 2 has so far successfully coped with this important task. The crisis can not last forever. As a result, part of the companies will come out of it with regular customers and partners, while others will be forced to restore the customer base from scratch.
Company 3. Manufacturer of food products from imported raw materials.
This company also experienced devaluation shock. The cost of raw materials, which they bought for the production of their products, has increased significantly. This problem was partially offset by profits. As a manufacturer, this company had such a mark-up on goods before the crisis, which would make it possible to keep the price now at a competitive level.
The second component of the crisis that this company felt was connected with Russian counter sanctions. Due to the ban on the purchase of food in Europe, there is an urgent need for new suppliers. Goods had to be ordered in Puerto Rico, in Latin America, etc. As a result, the company was very feverish, because it was necessary to find the analogues necessary for production, and, at a favorable price, check the quality for compliance with the requirements and conclude new contracts. Such changes, also urgently, always cause increased nervousness in the enterprise.
The consequences that this company has experienced:
- The sales volume decreased, and, very noticeably (by 2.5 times at the peak moment).
- At the same time, five out of seven major buyers (retail chains) refused to cooperate.
How the company responded to the crisis:
- Conducted staff cuts. So, from 4 accountants only one chief accountant remained to work.
- Spent automation. As a result, it was possible to reduce a significant number of accountants and other personnel in the production and warehouse.
- Switched to the use of cheaper information systems. For example, if earlier the information system of one company was used for workflow with a trading network, now a cheaper similar development was found and implemented.
If earlier the company did not think about many seemingly insignificant expenses, now all processes are optimized. How do I know about this? I was ordered to automate and introduce new information systems.
Another rather non-standard solution that this company applied is the refusal of the office. If they did not touch the production, they refused to rent the office at all. Servers were installed at home by company management, accountant, managers, and all the office-staff needed to support the company’s work, sharing information using a collaboration system, telephone communication, e-mail, etc.
What happened as a result:
Sales fell 2.5 times, production also worked intermittently due to the search for new suppliers, as well as due to the lack of demand for products. But thanks to the timely transition to cost saving mode, the company managed to survive a difficult period.
Now, sales are gradually growing, buyers are returning, as there is always demand for food, stores need a decent assortment, and final consumers have become accustomed to new price tags and are increasingly returning to the usual product mix.
Company 4. Telecommunication equipment
For this company, devaluation shock was very painful. They suffered losses due to currency fluctuations. Since the company did not have a strict accounting system, and the goods were mainly purchased under the order, several times the following occurred: buyers consciously paid for the ordered goods on the terms of 100% prepayment in the shortest possible time in rubles at the current rate. After that, due to devaluation, this product was purchased from a foreign supplier, sometimes even more expensive than it was already sold to the buyer.
In addition, sales fell very noticeably. Saving when choosing technology in connection with the crisis began and small companies and individuals. But most importantly, state-owned companies and large corporations also noticeably cut the budget for the purchase of high-quality equipment. Someone refused to have already almost signed contracts, someone postponed investment projects related to the purchase of equipment until better times, and someone decided to switch to other technologies that allow saving money, for example, to work in the cloud and t .d
As a result, the company also carried out staff reductions, and also began to actively use methods to stimulate customers (promotions, discounts, gifts). Expenses were also optimized and a more efficient accounting system was introduced. But, nevertheless, demand has fallen significantly on equipment, and therefore the company is going through a difficult period.
What you need and what not to do in a crisis?
So, the crisis in the economy is a fact with which we all have to live. At the same time, I want to save the company, minimize losses and, if possible, preserve the client base and revenues.
Using examples, I showed different ways to respond to the crisis in different areas of business and briefly outlined the results of certain decisions. Now I want to give you recommendations: what is needed and what should not be done in a crisis.
So, what not to do in a crisis:
- Do not be nervous in any way. Emotional decisions made in stress, most often turn out to be unsuccessful. Take it with the utmost serenity that some loss is inevitable. And calmly think about what you can really do.
- If your business is connected with import, and, as a result, the cost of goods depends on exchange rates, you need to minimize the time required to fulfill contractual obligations. Those. Between order processing and payment, the minimum possible time must pass, best of all, if it is no more than 2-3 days. After the specified period ends, the goods can be removed from the reserve or offered to the same buyer, but at a new price. Thus, you can fix the price in rubles, but avoid losses due to possible fluctuations in exchange rates.
- In no case do not tie the price to foreign currencies, do not need to specify the price tags in "cu". With this approach, your buyer risks losing funds on the so-called exchange rate difference if he places an order with one dollar or euro exchange rate, and pays with another. And this causes dissatisfaction and reduces customer loyalty. In addition, if you tie the price of the goods to the dollar or euro, you start selling not so much the goods as currency. Your customers are not looking at the product, but on the board with the exchange rates. This is wrong, because you are selling - the goods, and your buyer should see the goods, its characteristics and price, and not currency fluctuations.
- Do not make ill-considered personnel decisions. From the fact that you dismiss the entire sales department or because of your nervousness you create unbearable working conditions for people, the sales will not increase, rather, vice versa. Good sales professionals, despite the crisis, are in great demand. And if, due to your ill-conceived personnel policy, experienced salesmen quit, it will be difficult to find a worthy replacement.
- If you work in the field of B2B (business to business), in any case, do not try to attract customers "anti-crisis" discounts. Paradoxically, but in business, a company that is beginning to actively use discounts to attract customers in times of crisis is considered a weak player in the market. As a result, all relationships with such a company are built on a short-term basis. And this is a big minus.
What should be done in a crisis, what measures will help to successfully overcome it:
- If possible, choose Russian suppliers. Review your list of purchases and refuse to import wherever possible. Thus, you will reduce your dependence on exchange rates, which is very beneficial in a crisis.
- Open your production. If you do not find domestic suppliers of the goods you need, think, maybe you can become a manufacturer. Open sewing production, food production, furniture or any other production. Of course, this solution is not for all industries. But where possible, your own production will help you increase profits and reduce dependence on exchange rates when reselling imported goods. Trouble? Complicated? Fearfully? Of course. But Einstein also said that only a madman is waiting for some change, continuing to do the same.
- Increase the level of service. In a crisis, customers become very discriminating. If before the client had worked as usual for 3-5 years with you, now in a crisis he can change the supplier literally within a month simply because someone offered him the best conditions or the best service. In a crisis, people who are ready to buy understand their strength and become more demanding of all aspects of cooperation.
- Improve logistics, optimize warehouse balances. I personally saw two companies that thought that they would be able to wait out the crisis by trading stock in warehouses. They pin all their hopes on the value of goods in a warehouse purchased at pre-crisis prices. But, as practice has shown, these remnants did not help them. Most of the remnants, as one would expect, were stale in the warehouse because they belonged to non-marketable goods. Other products that could be sold were not in the best condition: packaging was damaged somewhere, somewhere - there were no components, etc. As a result, with a significant amount of stock balance, there was nothing to trade with. And the reason for this discrepancy in the absence of thoughtful logistics.
The current crisis in Russia is at the same time a test of strength for any business and the possibility of conquering new markets and new customers. Now, when customers have become much more attentive to both the service and the prices of any goods and services, for companies that work in the field of B2B, there is a real opportunity to expand the list of their clients.
In a crisis, the usual business connections can be destroyed in a matter of days, companies that can offer the best price or some other benefits get the chance to achieve significant success in a short time. Moreover, today many corporations are considering with interest representatives of small and medium-sized businesses as potential business partners, because a small company is more flexible, adapts more quickly to changing market conditions, and therefore can offer better prices and conditions compared to the usual large suppliers.
Not long ago, domestic business was booming, companies were developing, business profitability was growing, and the reliability of a familiar and convenient partner was valued higher than a better price. Many agreed to overpay a little just to continue cooperation with a convenient partner.
Today, due to the crisis, revenues have declined markedly, including among large corporations. Large companies can also go bankrupt if they did not know how to quickly adapt to the changed market conditions. And because the purchase price of goods has become a very important factor. As a result, small companies can now enter the market as new business partners for large corporations. And those who manage to establish business contacts during a difficult period will retain new contracts after the crisis and will have the opportunity to actively develop their business. I believe that this opportunity must be taken advantage of.
I believe that the crisis that we are all seeing for business looks like a combination of devaluation with a fall in household incomes, and, as a result, is accompanied by a fall in sales and a decrease in the total amount of money in the economy.
But even such difficult circumstances can and should be used. I described one opportunity above - a small company gets a chance to become partners and suppliers of a large corporation. Another opportunity is the opportunity to become a manufacturer.
I decided to say this, even despite the fact that these my thoughts could be the cause of the minuses (although I really hope that this will not be so). The fact is that the situation in which our compatriots, due to a drop in the level of income, do not have the opportunity to buy the necessary equipment, clothing, materials and much more abroad, has not only negative sides. There is a plus here: the money remains in the country.
What happens when we buy goods abroad? Financial resources go abroad, first of all, the foreign manufacturer earns, and our country receives only profit from the delivery of goods and, in some cases, customs duty.
Now, when purchasing power has fallen, you can start your own production, and they will buy from you! Of course, I do not mean areas such as automotive or the production of sophisticated equipment. You can develop the light or food industry.
So, for sewing high-quality and inexpensive clothes, not so many investments will be needed, likewise, a sausage or pastry shop can be a great helper in a difficult period. Moreover, you can also buy materials and products mainly in our country. And with decent quality in combination with a low price, your products will become very popular.
Why am I writing about this? I really want you, like me, to understand that a crisis is not only a problem, but also a new opportunity. There are many drawbacks in it, but there are also pluses. And we must strive to benefit from any situation, but look positively at life and our prospects!
Source: https://habr.com/ru/post/291044/
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