Cash gap: the main reason for closing stores with beginners

This fat polar fox sneaks up exactly at the moment when the owner thinks that he is doing well. Typical scenario: opened a store in September, abruptly traded New Year, repulsed investments on March 10, survived the summer off-season at a small point, for the second New Year it expanded a little and finished the season very nicely. Formed 2-3 free million, which really want to buy a big sparkling car. Or ice cream. For all. The soul asks.

The result - a rather large amount is taken out of the business.
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And ahead of the season. Costs have increased (more rent, more sellers), but profits may turn out to be at the level of the first year. Expenditures become more revenue, there is no “pillow” - ice cream was bought for reserve funds in March. Three main expenses (80% of the total share) - is the purchase of goods, rent, salary. Looking that it is possible to cut off, the owner begins to buy a little less goods and reduces advertising. Like, it’s still less goods. A direct consequence is a corkscrew leading to closure.

But let's see everything in numbers. Suppose we have a very single point in the region, which makes 5 million rubles of revenue per year. This is usually one of several stores, but in our example it will be the only one.

Season

So, an enterprise in a business with pronounced seasonality is always designed for an annual cycle. The result is not calculated according to the results of the week, month or quarter, but according to the results of the year. Sometimes generally 2-3 years.

Here is the schedule of revenue by the months of our point in a normal year:


Blue revenues, purple expenses.

Please note that income and expenses do not overlap, income is always higher than expenses, and there is no budget deficit. That is, any expenses that need to be made are paid right here and now out of the money that the point brings in a turnover. The result of this year on the chart is 1.4 million rubles of profit (UPD: amendment, this is without taking into account the manager's salary, that is, you within a year) . This is something that can be picked up by the owner.



Things got worse here. In July and August, revenues are lower than expenses. If you look only at these two months, things are bad. If you look at the year - a total of 1.1 million rubles. Obviously, it is still worth doing this, and do not care about the gap.

The situation further concerns any business, including the sale of bread (according to a 2007 survey in the summer, a city dweller ate two times less bread than in winter). But I will illustrate with the example of Mosigra, the benefit of all our desktops have the most pronounced seasonality. For example - sometimes December is 4 times higher than July or August in Moscow.

Cash break in person

Let's go back to our pessimistic year. Imagine: on July 10, you paid the salary to the sellers and paid the rent. There is almost no money left. Instead of a financial cushion, you have a sparkling car bought for a new year. The next product order is July 15th. It is necessary to fill in what was bought from the point, and still buy new products. Then you will need to pay advertising and still buy a new form of animators.

An inexperienced owner of the point may decide that it is worthwhile to order less goods and slightly trim the advertisement. He thinks like this: well, I still have the goods, until I fill them in, wait until they buy up what's left. And a little trimmed advertising.

The exact reasons for the emergence of such a decision are unknown to me, but the outcome is pitiable. Is always. It works like this in tacts:

1. At the end of July there is already far from the entire range at the outlet For example, category A positions may end. For example, the first three hits give 9% of the store's revenue. Obviously, they will be disassembled first. Obviously, they will end first. If they are not replenished, these revenues are simply cut off from the already bad season. The schedule is as follows:


Solid - that would be with full assortment, dotted line - when cutting out a small part of the goods of category A.

That is, we exchanged an extremely insignificant decrease in expenses for a substantial decrease in revenue. Sometimes owners try to buy hit positions, but do not take categories B and C. Then the same process goes a little slower, but it goes.

2. In August, commodity stocks fell at our location. Suppose in February at the point there was a commodity for 600 thousand rubles, and now for 400-450 thousand. This means that people who wanted to buy something specific and do not find the right product come to the point. That is, the owner teaches his client two things:

but. For the hand leads to other shops with gifts and says - buy there.
b. Delivers a message: you cannot find a gift here, you no longer need to enter.

If a new grocery opens on your street, it will be enough for him to attract you twice. From the second time, if everything is fine there, with a good probability you will go to him. It does not matter how many years before you crossed the road to your past favorite. I know the epic confrontation between two shopping centers opposite each other, which was won largely due to the delicious bread in the grocery.

So, the whole of August and the beginning of September you teach all the people who come to you to the point or are looking for a product on the Internet that you should not go to. Just because you have not ordered a "little" product.

3. Advertising, of course, does not work to the full. At the same time, another process is developing: a person who would come, say, for the Elias game, statistically buys 1.4 games. If it is not there, then we lose not only what was not sold and so because of the presence, but also 40% of the turnover.

The consequence - the sellers are sad, no mood. I can’t recommend anything - the product of groups A and most of B no longer exist.

4. September is coming. Demand rises naturally due to seasonality. Sales are growing. It is necessary to buy a new product, but you do not have enough funds to buy a new one in the right amount because of the reduced revolutions in the past months. And in the end you buy, say, 80% of what you would take on the New Year by December. This is if oklemesh. The result is that the store seems to be alive, everything is fine, the goods are sold, but you did not earn 1.1 million, as planned, but, say, 600 thousand. What does it mean? That by the next summer, if it is the same, the cash gap is inevitably waiting for you, and even if you wrap up (which is unlikely), there will be zero at the end of the year. And this is a cross on business.

What to do?

Now we look at one of 10 points in the city. For a point with an annual revenue of 5 million and 500 thousand profit, the cash gap in our practice can be up to a million rubles in the worst case.

This million must be taken somewhere. The options are as follows:

• Try to achieve a deferment of payment on deliveries. In the summer, suppliers go for it, and you can receive a deferred payment in September, when two months with a departure to minus will be overcome - and the goods will be delivered on time.
• Take the money from your reserve, which you carefully saved up. But it may not be.
• Take a bank loan or use overdraft. This is a good tool for retail and for such situations, but you need to be extremely careful with it - if you do not have a plan for returning it, supported by concrete numbers, it is better not to do it. That is why we strongly do not recommend opening stores on credit, and generally using credit tools for the first 2 years.

About the loan there is another feature. If this is your only store, then you don’t give a loan to a legal entity. We'll have to take the consumer, and it can be up to 20%. Therefore, it makes sense to agree in advance with the bank (in February-March) on opening an overdraft in order to plug a hole in the budget for 30-60 days. However, note that overdraft is designed to close short holes in 1-3 days, not 30, so do not rush to solve. Using it as a long-term tool is unwise. The peculiarity is that it is necessary to take it to zero every 30-60 days, this is a technical renewal of the overdraft. Such an agreement with the bank is valid for a year, and it must be renewed every time. This is worse than a delay, but there is another moment in the delay - if it did not fulfill the promise, then it was left without a product, and without money.

The usual drama looks like this: in July it's a surprise, they start saving on goods and advertising. In due course the goods, first of all top-end, then group B. come to an end. By October should begin to earn. At this point in September, I want to take a loan, but some of the public is already confused. You can get out of the ass and a year to correct what they did with the market. That is, once did not think - a year working idly.

The right position is to know about it in advance, and to think either in February about a loan or a deferment, or even in December about how much money can be pulled out of the business, and how much should be left on the account in case of a reserve. The decision is not made at the time of the crisis, but strongly in advance. It's like backup - the third year will teach him how to do it.

Another cognitive distortion

“People are not going anywhere, they are used to buying from us”
Not. This is in Moscow, the choice of the store is primarily done by location. In the cities less - all the shops are close. And a person can bypass all of them, knows all of them, and everywhere knows what and how much it costs.

“We need to raise the prices of hits, then they will be taken more slowly”
Under the conditions of the boundary market sounds reasonable. More margin, less consumption of goods with the same profit. But the market is not closed. Not! The person understands perfectly well whose price is too high.

That is why we regulate prices from Moscow, and do not give them the opportunity to inflate. Yes, you can win 40-50 thousand rubles per month, and at the same time lose in the future 5 years. We think for years to come, and therefore we keep prices stable. Since we don’t have a time machine, we still hope that the trend is correct. We'll see.

"We must sell the stale goods, but not below cost"
From this light thought, “SALE 30%” and other joys with selective deadlock are usually born. If you sell something, it’s just that it sells well. Well, in general, prices can not be eroded with a discount: we have a maximum of 10% for retail. Because the price is iron-based.

The exception is to sell a product of the C- group (which is not needed in the store) below cost. And it's better - in bulk to a neighbor, or from Avito, and not in a store. Here the question is why below cost. The voice of reason is:

1. The goods can not be sold within a reasonable time (lim = ∞).
2. Money is frozen in it - at least 10% per annum.
3. It takes up space in a warehouse or a shop window - at least 500 rubles per month per item.
4. With the accepted limit in (1), if you manage to gain at least a ruble for it, it is a ruble that will never be. If the limit (lim ≠ ∞), then there is a term that determines the speed of defrosting money. As a rule, the purchase price of the goods and the reasonable sale price are not combined - you have to sell below the purchase.

"You can cut advertising"
Not. It is necessary to keep the goods in stock and advertising in battle. Because otherwise the vacuum will be filled by someone. In order not to go far, I will expand the situation: as a rule, in the region the vacuum will be filled with a federal network. Because she knows about it.

Summary

The cash gap has no optimal tactical solution. Any attempts to steer the situation will lead either to a fall in turnover, or to the payment of a loan (and a fall in profits due to interest payments). The only solution is strategic when you plan the maximum gap in advance. The reasons that lead to rupture, you need to know how the alphabet.