Being part of a Global network supporting high-impact entrepreneurs, we are always aiming to provide the entrepreneurs with the best guidance and assistance. This is particularly true in these troublous times due to the COVID-19 crisis, when some of the most valuable sources are the knowledge sharing and exchanging best practices. Here’s what one of our network members shares about the measures taken in their company, with the hope that they will be a useful instrument to others.
Sleep goods distributor in Bulgaria & Romania, selling through approx. 1300 retailers, designers & architects. Since March 16th, sales are down approx. 70%.
- Scenario planning: profitability & cash flow stress testing at various levels of sales
- Supply chain planning: our stock comes from Italy and in the early days of the virus there we ordered additional stock in case of supply disruption
- Cash preservation
- cutting spending but still investing in marketing where profitable
- re-negotiating payment terms with suppliers
- negotiated lower prices with suppliers
- implementing much stricter payment terms with customers: do not deliver future orders until past orders are paid
- Additional price & service incentives to our retail partners
- offered to service their clients in case their shop is closed, while still paying them the commission for those clients
- driving traffic to their online shops (we do not have eCommerce in Bulgaria so as not to compete with our retail partners)
- free delivery to their clients
- Incremental sales
- like everyone, focused online
- looking for other direct channels: corporate offers, reaching out to real estate companies to sell to their customers who recently bought a house/apartment
- The toughest part: all of the cost cutting was not enough, we had to cut HR costs as well:
- employees put themselves in a voluntary unpaid leave for a week
- closed some positions
- cut salaries: 30% for the board & senior management, 25% for team managers, 20% for employees. Company commitment to return those cuts to employees backdated to this month, once business is back on track
- daily management calls, all hands on deck 24/7
- open & transparent communication to the rest of the company
- every single person from top to bottom is looking for ways to sell mattresses/pillows/accessories
A couple of human stories:
- One member of the team was laid off as we closed her position. She said: well, I will be on unemployment benefits anyway, I would like to continue working and contributing
- Warehouse staff offered to do previously outsourced work themselves in order to save the company money and earn a couple of additional bucks for themselves
- One person offered to take a 50% cut in her salary as long as we do not lay off one of her colleagues who is the sole earner in the family
The author of this article prefers to remain anonymous.
Photo by John Schnobrich on Unsplash.