Financial management in the crisis it is something relatively new for entrepreneurs. It happens from time to time, it is true, but we are hardly prepared to deal quickly and effectively.
For this reason, a good business management it can serve as the compass to navigate through such turbulent times. After all, even if we do not know what the origin of the next crisis will be, its professionals will know how to conduct the business without waste and losses accumulating.
This type of financial management involves good business management practices. After all, in a troubled and uncertain moment, it is important to remain calm and make decisions based on numbers and arguments. For this, it is possible to shield yourself with some interesting guidelines, such as:
- Analyze the numbers;
- Evaluate spending cuts;
- Meet with all employees;
- Redefine the goals;
- Take care with credit requests;
- Also take care of your employees;
- Prospect new customers;
- Invest in competitive differentials;
- Put reason above emotion;
- Watch out for extremist actions.
And that is what we are going to talk about throughout this article. In the next few topics, we’ll explain the importance of business management and how to apply it to ensure a positive scenario with good financial management practices in the crisis.
The importance of business management
Even when there are no crises looming on the horizon, business management is a fundamental tool for the development of any company. And for several reasons, among them:
- adds more security to your assets;
- allows personalized planning, according to your needs and objectives;
- keeps the team focused, aware of what to do – and how to do it – in the face of different scenarios;
- improves workflow, guiding all teams on their responsibilities;
- it generates sustainable growth, based on numbers and not on uncertain guesses.
In this way, a good financial management in the crisis will become action plans foreseen to retain expenses, minimize the negative impacts on the economy and keep the enterprise functional and productive.
Business management tips for financial management in crisis
For those who are going to start setting up the planning now, or even for those who already apply good business management practices, the following tips can serve as a good guide. Check out what they are, and analyze the possibility of implementing them in your company's routine!
1. Analyze the numbers
Do you monitor all financial ratios and any other data that helps in monitoring your company? This is essential, regardless of any crisis we are experiencing.
And do you know why? This information is crucial to know if a strategy is yielding what is expected and also allows the diagnosis of problems that may be slowing down your search for results.
Therefore, it is a good idea to start your business management through what the reports and spreadsheets have to say. Interpret them, to understand how much a Financial crisis it can harm your business, and also what solutions to adopt so that financial health stays up to date.
Completely, take the opportunity to evaluate the records of the last months and thus evaluate what is wrong. Perhaps a team is spending (time and resources) more than necessary, or even the workflow contains several productive bottlenecks.
This all becomes an unacceptable waste for any enterprise, but especially for good financial management in the crisis.
2. Evaluate the spending cut
Still hitchhiking on the last topic, a good way to use business management for the benefit of the company, even in the face of an economic crisis, is to cut expenses.
And, let's face it: it is always possible to reduce something, here and there, to improve the results. In a financial crisis, then, this issue becomes elementary to guarantee a breath in the accounts, at the end of the month.
For this, make a mapping to understand where each penny goes: investments, hiring, maintenance of the company, production… Everything, so that there are no unforeseen events when calculating expenses and also receipts in that period.
We are talking about a time when the balance of accounts must be done. Therefore, any economy is more than welcome to reduce the business budget.
3. Meet with all employees
Financial management in the crisis does not depend only on the efforts of management and HR to raise awareness: it's up to everyone. So, get together with all the teams and have maximum clarity and transparency in the message.
After all, it is common for people to feel fearful and even unmotivated in the face of such an adverse scenario. Fear of unemployment is one of them, as well as poor results can hamper employee productivity and engagement.
So, this dialogue helps to unite and integrate everyone. It makes the mission of saving, using resources assertively and avoiding errors (which translate into waste and loss) create a more dangerous environment and conducive to cutting labor over time.
4. Redefine the goals
The desired growth of 15% per year may have to wait. For, in a financial crisis, the entire market is affected. The consumer buys less, companies have lower results than previous months and uncertainties accumulate.
It is useless, therefore, to maintain the goal previously set if it became, as a result of the crisis, an unattainable number. In these situations, meetings should take place periodically to analyze, review and project new numbers that guarantee financial control first.
5. Take care with credit requests
Sometimes, it may be unavoidable to apply for a loan with a financial institution. However, avoid that this practice occurs without the minimum of planning and without guarantees that the commitments (deadlines) are respected.
Because interest and fees, in addition to possible fines, can put an entire financial planning at risk. Thus, financial management in the crisis foresees a greater attention to these alternatives that solve a problem in the short term, but which can turn into greater adversity in the medium and long term.
Another interesting tip in this regard: renegotiate your debts. Look for more affordable terms, lower rates or even facilities to settle the debt if done immediately. This can translate into a more tense period, at first, but with less risk for the company later if the debts accumulate.
6. Take care of your employees too
Do not neglect people management. Firstly, because the issue is an inherent part of business management, but also because employees have as many fears and fears as managers, when it comes to a financial crisis.
On here, it's worth meeting with HR to help keep productivity, motivation and engagement high. The search for results must exist, after all, and it is important that awareness reaches all departments of the company. No exception.
7. Prospect new customers
An important point, which many seem to forget, when dealing with financial management in the crisis: there are business opportunities even in an economically turbulent environment.
The challenge here is to identify them. So, go to the market, prospect, relate and encourage your employees to do this diligently. Remember that your company will not stop due to the crisis, just slow down: hence, the importance of considering strategic alternatives to generate income while, internally, the cost reduction remains worked.
8. Invest in competitive differentials
To complement the previous topic, it is worth observing the market to identify deficiencies that competitors have not yet explored. For example: more flexible payment terms, faster deliveries and new business models that strengthen commercial ties with its partners.
Such measures can stimulate consumerism even though the timing is not ideal. Even more, because you are granting facilities for such purchases to take place without anyone taking a serious risk of generating defaults in that period.
9. Put reason above emotion
Managers and business owners tend to be shaken by the echoes of a financial crisis. Not least, since uncertainties call into question the planning of an entire year, many times.
Only it is important to remain calm, breathe and act with objectivity and clarity. Decision-making must be based on numbers and arguments, never on guesses and, even less, on prostration.o – something that can occur when stress clouds logical reasoning.
Especially in leadership. This should be an example that inspires employees. If the leaders themselves are scared and appear not to know what they are doing, employees have a high chance of reacting the same way.
10. Watch out for extremist actions
Finally, your business management must consider all alternatives. That's because, many entrepreneurs embark on a “life and death” journey to save their business.
What does that mean? That, instead of drastically reducing revenues – meaning a shrinking in revenues -, people try to maintain the same size and results until debts become an impediment for the enterprise to sustain itself for another month.
It is worth considering – especially in the face of a financial crisis – all of your options. Reducing revenues from R $ 1 million to R $ 500 thousand seems catastrophic, but it allows that, at the end of these turbulent times, the entire company is rebuilding itself to regain its space and have a commercial influence again.
So, were you able to identify good opportunities with these business management tips for financial management in the crisis? So, share this post on your social networks, and mark colleagues who can also benefit from this content!